Google Shutting Down Local Business Referrals Program

Back in August of 2007 Google announced their Local Business Referrals Program. A lot of people shook in their boots, others doubted any success. I suspected that it was doomed to fail.

I just don’t see Google coming into this space, sprinkling it’s Google fairy dust on the marketplace and voila – cracking the code. OK, so maybe Google’s isn’t trying to crack the code, but just penetrate the market a bit more than they’re able. Google should want to penetrate this space, of course they should, but doing it themselves? Gimme a break! And this approach is just silly. I kind of get the sense that this is a desperate move by an increasingly clumsy and goofy corporation that will yield very little. Next step for Google? Snatching up local search players.

Success in the local search market will not come from a giant like Google or Yahoo or Microsoft. It will come from the small startups like, well, like CitySquares.

Here’s Matt McGee’s post on the demise of the program, which gives some more detail. Here’s what Google had to say:

On December 31, 2008, we will end the Google Local Business Referrals program, which was one of many Google Labs initiatives that we had developed as part of our ongoing commitment to experimentation and testing new ways to help businesses establish a presence online.

Many relationships have been built as a result of Google Local Business Referrals, and local connections between representatives and businesses have been forged that we hope will continue. However, the program will conclude at the end of the year as part of our effort to ensure that we prioritize our resources and focus more on our core search, ads and apps business.

So, what’s next for Google and their local ambitions?

Google’s Feet On The Street

On Monday Google announced their Google Local Business Referrals (LBR) program in which “local representatives” (essentially 1099 contractors) are paid to a) collect local business information, b) submit that information to Google’s map/listings services, and c) spread the word about AdSense. Google will pay it’s local reps $10 for each business submitted, but not so fast. Here’s what Google says:

You’ll visit local businesses to collect information (such as hours of operation, types of payment accepted, etc.) for Google Maps, and tell them about Google Maps and Google AdWords. You’ll also take a few digital photos. After the visit, you submit the business’ info and photo(s) to Google.

You can earn up to $10 for each approved, verified referral you submit. This includes $2 when a business referral is approved by Google; and $8 when an approved business verifies that the information you submitted is accurate. Referrals are approved by Google based on the completeness and quality of data supplied by representatives. Businesses verify their information either by sending us a response postcard or verifying their information online. As long as your earnings total at least $25 a month, you’ll receive a monthly check.

Well woopie-doo! Donna Bogatin articulates quite well what I think of all this:

Google has announced various partnering schemes with the goal of piggybacking on small business sales force and distribution assets of other companies, such as 1) a Verizon SuperPages.com partnership to “marry its “sales channel opportunities with Google’s vast advertising network” and 2) a Intuit QuickBooks referral button deal to “help small businesses to attract new customers.”

Despite Google’s efforts to leverage the sales efforts of third-party companies, however, the local ad market remains elusive. Not surprisingly, Google can’t even garner sufficient “freebie” Google Maps listings it offers local merchants.

Google is undeterred. Sheryl Sandberg, VP Global Online Sales & Operations, said of the local opportunity last year:

As people do more local search on Google, we provide greater opportunity for local advertisers. In that area we think the market is widely under penetrated, it sounds surprising to a lot of us, but even in the United States, arguably the most developed market in the world for ecommerce less than 50% of businesses even have a Web site, or let alone advertisers, so we think there is tremendous opportunity to bring those people online and bring them into our advertising product.

Is Google biting the “feet on the street” sales force bullet, then? NO! As usual, Google believes it can get away with playing by its own business rules.

I think Google is way out of it’s league here. I’ve often believed that Adwords doesn’t really even make sense for much of the local merchant market, unless they’ve got an active eCommerce function.

Donna goes on:

The Googley local ad sales solution is to offer slave wages to U.S. residents: $2-$10 for hours of labor intensive one-on-one cold-calling, prospecting, ad creative development and sales closing.

What is the going local ad sales market rate? Erron Silverstien, former Citysearch exec and founder of local search play YellowBot recently told me a successful close of a local merchant entails, on average, a $500 investment.

Does Google know better? NO! Google believes it can get away with solicting U.S. adults with a pennies on the dollar pitch: That is the Google Local Search $10 pipe dream!

Greg Sterling takes a practical approach:

Yet unless there’s radical simplification (”just tell us how much you want to spend monthly and we’ll do the rest”) there’s still the issue of the learning curve and complexity of self provisioning for local businesses.

But this is one more piece in a diversified Google strategy to reach the local market.

Matt McGee has quite a bit to say about this matter, and in summary he also believes it will be a failure. Matt says:

I think it’s naive to think that people are going to jump at the chance to knock on the doors of local businesses, take photos inside, promote Google Maps and Google AdWords, fill out paperwork, submit it all online when they’re done, etc., out of the goodness of their heart. You have to provide a better benefit than “you’ll be helping your community find local businesses.”

I just don’t see Google coming into this space, sprinkling it’s Google fairy dust on the marketplace and voila – cracking the code. OK, so maybe Google’s isn’t trying to crack the code, but just penetrate the market a bit more than they’re able. Google should want to penetrate this space, of course they should, but doing it themselves? Gimme a break! And this approach is just silly. I kind of get the sense that this is a desperate move by an increasingly clumsy and goofy corporation that will yield very little. Next step for Google? Snatching up local search players.

Success in the local search market will not come from a giant like Google or Yahoo or Microsoft. It will come from the small startups like, well, like CitySquares.

A Good Month, a Good Quarter

Being that it’s June 29th, the last business day of the month, and the last business day of the 2007 Q2, I must take a moment to reflect on the excitement that I’ve felt today, and through the past 3 months.

Three months ago today, it was the last business day of March, also a Friday. Looking at my Outlook calendar I had one meeting scheduled – a telephone demo with Iotum (Talk-Now). Ali’s graduation party was the next day. The deal with eCoast hadn’t closed yet, but it was imminent and the announcements were all but formal. We were still working out my basement, 2/3 of us were anyway. And we didn’t have any real solid prospects on a sales manager.

Well, I’ll spare you from the minutiae of the rest of the days thereafter, and most of the updates are here on this blog. In a nutshell though, our new Manager of Biz Dev, Phillip Dias, joined the team, and soon after he hired Zac Champa to work with him. Both of these guys are just rock stars, I’m very pleased with the quality work they do, the energy they bring, their attitudes and their cultural contributions.

Chris has some awesome community activities planned, some great campaigns incubating, and he continues to contribute to sales.

Bob is starting to heat things up with respects to product development, hiring an engineer, and getting a new site/platform built in time for the holidays (knock on wood).

We also have an office now and aside from some acoustical concerns, we’ve settled in and are quite happy. We’ve even made some new friends, like Mike Freedman and Paul McBride. We have some great new customers, some early partner oppty’s, and a big outlook with many challenges and many promises on the horizon.

Today was a big day, in more ways than one. We made our numbers for June, we had some breakthroughs, we formed a tighter bond with some customers, we also formed a tighter bond with each other. We had dinner and drinks at Redbones tonight too. Zac thanked everyone for making Citysquares the best job he’s had in a long time, Phillip, Bob and Chris shared their sentiments, as did I.

Today was a very good day, in more ways than one. And looking back to 90 days ago, we’ve really made some big progress.

Undoubtedly the good-times can’t last. That’s not how life works, that’s not how business works. There will be hard times and tough days, tough months, even tough quarters. July will not be a picnic. It will be a tough month and August will be harder. No picnics here at Citysquares.

But today, June 30, 2007, is a good day that we’re enjoying. These days make the others much more tolerable.

A Taste of Progress

Well I have to admit that today was probably the first really great day here at CitySquares. Today just felt like progress was in the air. From early in the morning through this hour things were just happening, all day. Phillip and Zac were just kicking ass today and they took June sales from good to great. Bob is really cooking on the IA for the new platform, the comps, and readying for his presentation the BOD on Monday. Chris is really starting to get the marketing and PR stuff moving and some really great ideas are in the oven. Our advisors are coming in tomorrow for a meeting and to discuss lots of things.

One of the coolest things that’s starting to happen now is we’re starting to really perform as a team. The office is just abuzz. People moving around, phones are hot, faxes coming in and going out, ideas are being discusses, priorities are being targeted, fires are burning, and everyone is getting along really well. The energy and morale is very positive; lots of smiles, and there’s just as much dialogue and debating.

Today felt great all around. There will be highs and lows, but my gut is telling me that this is just a taste of what’s yet to come.

Priority #1: Sales

After about 4 weeks of interviewing candidates for our business development manager position we settled on our final candidate and made him an offer this weekend. Interestingly enough, as I had hoped, we found our new rainmaker by tapping resources – free ones. We didn’t find him through recruiting firms or from Craigslist. We knew what we were looking for in this person and we sought it out, very aggressively. I didn’t sit back and wait for the resumes to come in. It doesn’t work like that.

I’m sorry but I’m going to keep saying “he” and “him” until he officially starts; Ya just never know.

So he has all the characteristics we were looking for:

  1. Experience: Strong inside and outside sales experience. Bonus: Extremely good market experience.
  2. Guts: He’s willing to jump in and ready for the next step in his career. He wasn’t even on the market when I first contacted him. As my father always said, “the best jobs are the unadvertised ones.” True that.
  3. Drive: He really wants more. He’s got a hunger and a passion, for life and for success, and prosperity. He probably hasn’t quite harnessed those qualities yet because, professionally, he hasn’t had the opportunity. Now he does.
  4. Cultural fit: He’s about our age, he knows the space, he understands the Internet and how it fits into peoples’ lives, he totally gets the market too. Equally importantly is that I don’t see a reflection of ourselves when I look at him. It’s time to freshen things up a bit – bring in some new blood, with some different interests, different opinions. He’s going to fit in really well I think.

So for the past few hours I’ve been on my laptop doing a massive brain-dump of all the things I’ve ever envisioned for a CitySquares sales organization. I’ve documented everything from compensation and incentive plans, to processes and market data. It’s the new and improved CitySquares sales organization.

If it ain’t about sales – it’s a distraction. It’s a fire and it must burn. We’ve got a lot to do over the next few months, but sales is the top priority, and the second priority, and the third priority.