Decoding the new economy

The dying Yelp of Sensis

Can a social review site save a fading directory company?

This story originally appeared on Technology Spectator

Fifteen years ago Sensis, the directories arm of Telstra, was untouchable. A listing in the Yellow and White Pages was essential for every business and Sensis’ monopoly was a true river of gold.

Sensis’ launch this week of an Australian partnership with the US based review site Yelp is Telstra’s desperate throw of the dice to survive in a market where its directories business has become irrelevant.

Attempts to stay relevent

There have been many attempts by Sensis to overcome this erosion of its core maket including purchasing an IT services business and unsuccessful forays into publishing and online search with Trading Post and CitySearch.

Probably Sensis’ lowest point was the squandered millions of dollars and years of management time wasted in trying to compete against Google after Telstra CEO Sol Trujilo made the sneering comment of “Google Schmoogle”.

Declining values

At the time of Trujillo’s comment in 2005 Sensis was valued at $10 billion as a stand alone company. After last week’s disappointing results that saw revenue drop 18 per cent for the year, the value of the division is an optimistic $5 billion.

Yelp itself is unlikely to help Sensis’ revenue woes. Despite filing for a $100 billion public offering, Yelp has never made a profit in its seven years of operation. Although licensing their service to failing directory companies around the world might prove to be a handy revenue stream.

That lack of profit – on North American revenues that are tiny compared to Sensis’ Australian cashflow – shows the fallacy in the social media business model that many of the popular online services are faced with.

Users of social media services like Yelp are looking for a community of trustworthy and relevant referrals. The directory sale model is based on displaying the biggest advertisers prominently, which is exactly what social media users don’t want.

Yelp also comes into a marketplace already crowded with competing, established services like Word Of Mouth Online, Eatability, and the faster moving social media platforms like Foursquare.

Competitors’ Missed Opportunities

In many ways Sensis has been lucky in that most of the competition has been from smaller upstarts while their bigger competitors haven’t capitalised on the market opportunities.

Google Places, the biggest competitor to the world’s Yellow Pages directories, is mired in bureaucracy and isn’t doing a good job in telling business its story while Facebook’s local search function isn’t getting much traction either.

Of the local Australian incumbents, ninemsn isn’t interested in local business with its international partner Microsoft not offering an Australian product and the local team preferring to deal with big spending advertising agencies, while Fairfax squandered its early advantage and eventually sold the CitySearch service to Sensis.

News Limited’s True Local is having limited success while it struggles with the transition from print to online. At News’ recent launch of its new digital platform, the company’s executives stated they expected journalists to develop a “digital mind”.

Lacking a Digital Mindset

That “digital mindset” is the key to the problem at companies like News Limited, Fairfax and Sensis. In a marketplace where customers, advertising and readers have moved online it requires management, not just the lower workers, to “think digital”.

Sensis’ key problem is its management structures – and more importantly its sales teams’ commissions and KPIs – which are still based around its traditional business models that will make selling services like Yelp difficult.

The phone directory business model is a product of the 1920s and in many ways Telstra and the other Yellow Pages franchisees around the world should be grateful it has lasted so long.

Whether the phone directories that have been so profitable for phone companies can make it to their one hundredth birthday is an open question. One thing is for sure, bolting on an unprofitable and late to market social media service isn’t the answer.

Comparing local review and search sites

How do the local search services compare?

With the Australian launch of local search and recommendation site Yelp, it’s worthwhile comparing the different sites to see how well they worked.

The sites work in different ways, some – like Sensis Yellow Pages and True Local – are online directories that search just the title and description of business.

Yelp, Foursquare and Word Of Mouth Online, are socially based and derive their searches on the content and number of community reviews. Their algorithms, the formulas to figure out what customers are looking for, are more complex than the basic online directories.

Most complex of all are the hybrid searches, notably Google Places and Facebook Places, that build local upon their search and social media data.

Each model has it’s own strengths and weaknesses which shows when we do a search. Due to time restrictions we only did two.

Looking for brunch in Neutral Bay, NSW

The first search was using what somebody might be expected to search for on a casual weekend or holiday morning. Neutral Bay and surrounding suburbs have plenty of cafes catering to the brunch crowd so it should be expected to return plenty of hits.

Yelp

The new contender only found one local result and the rest being on the other side of the Harbour Bridge, including one at Bondi Beach which may as well be in the Upper Amazon to the average Sydney North Shore dweller.

Interestingly, entering neighbouring suburbs changes the first two or three results to that suburb but the subsequent listings are the same remote locations as for the Neutral Bay query. This might indicate popularity with the current Yelp users or may be part of the package merchants get when they pay for a listing.

True Local

News Limited’s True Local disappointed one cafe in the district was identified and the number one result was in the city.

This poor results are probably due to the word “brunch” not appearing in the local cafes’ descriptions or titles, but this is a serious weakness for True Local, particularly in a district where they dominate the local news media.

Google Places

Surprisingly, Google Places returned an extremely poor result with no local businesses found.

Again, this is probably due to the failure of business owners to ensure keywords are entered in their business description and it illustrates how Google is allowing an opportunity to pass them by.

Facebook Places

Nothing. Nyet. Zip. No brunch for you.

Yahoo!7

Another poor result that has just scraped information off the web. It shows the weakness of the Yahoo! and Channel Seven joint venture which, like News Limited, is letting opportunities pass.

Bing/NineMSN

Probably the most disgraceful of the results, NineMSN returned two cafes for the whole of Sydney, a city of four million people.

The second result entailed, according to Bing’s directions, a 38km drive timed at an optimistic 23 minutes involving $9 in tolls and an illegal u-turn.

NineMSN’s performance shows just how irrelevant Microsoft has become in the online space and their Australian joint venture partner is more interested in selling big integrated campaigns to advertising agencies.

Given NineMSN and Bing are the default browser and search engine on nearly two million computers sold in Australia each year, not having a local business strategy is squandering a massive opportunity.

Citysearch/Sensis

Founded by Fairfax, Citysearch could have been a great success combining the assets and readership of Fairfax’s metropolitan and local newspapers coupled with their experienced sales teams selling advertising space and subscriptions. Good management could have done this.

Sadly Fairfax was being run by Professor Fred Hilmer and his army of power suited McKinsey consultants and Citysearch was eventually sold for a pittance to Sensis, who have allowed it to shrivel away as the zero result for our search shows.

Eatability

Eatability was a genuine surprise, returning no brunch establishments in the area. The only thought is that no cafe in the neighbourhood has the word “brunch” in their keywords. Still a very poor result.

Urbanspoon

The web version of Urbanspoon returned the most bizarre result, correctly finding one local cafe but misinterpreting the address as being in Bankstown on the other side of Sydney.

Urbanspoon’s iPhone app returned a far better range of results in surrounding suburbs although it only found one cafe actually in Neutral Bay which wasn’t the one incorrectly found on their web app, which didn’t appear at all.

Word of Mouth Online

Word Of Mouth Online delivered the best result of the web pages with two of the first three results being relevant. Of the other seven, they met the criteria of being within a 5km radius of the location which in Sydney can be a 12km drive.

The results would have been better with more local establishments but it appears the keyword “brunch” hasn’t been used by many of the WOMO reviewers.

Note: After the review I was contacted by the founder of WOMO, Fiona Adler, it appears some of the reviews have have been updated in the meantime. I’ve changed the results below, but the left the one above as it was correct at the time of the review.

Foursquare

Like Yelp, Foursquare relies heavily on users’ contributions and this shows in the flaky, almost useless results for our search terms on a web based search.

Foursquare’s iPhone app was far more efficient, identifying a range of good venues in the area which were ranked according to friends’ recommendations.

Sensis/Yellow Pages

Again, “no brunch for you.” It’s almost scandalous that Yellow Pages has no entries at all for “brunch” for an inner Sydney suburb.

Redoing the search

Clearly the term “brunch” is problematic in all the services, so as a check here’s the relevant first page results for other search terms on each of the services;

Service	Café Neutral Bay	Breakfast Neutral Bay	Lunch Neutral Bay
Yelp	7/10	2/10	7/10
True Local	9/30	0/30	0/30
Google Place	10/10	0/10	10/10
Yahoo!7		not relevant
Bing/MSN	3/10	0/10	0/10
Citysearch	6/10	3/6	4/4
Eatability	40/50	8/8	23/31
Urban spoon	3/3	0/0	0/0
foursquare	3/20	1/20	1/20
WOMO	8/10	2/10	5/10
Sensis	7/10	0/10	0/10

As we found with the earlier search, Yelp was somewhat inconsistent and no doubt the social aspects will see it improve as more users come on board, the results are highly dependent on the terms used by reviewers and this will affect the search results.

True Local’s score was surprisingly bad, the search for “cafe” found 12 places but three are long closed. “Breakfast” listed B&B accomodation and “lunch” found outlets in the city and Eastern Suburbs.

Google Places also disappointed on “breakfast”, picking up some B&B establishments along with some city cafes. This is almost certainly due to keywords missing in descriptions.

Yahoo!7 doesn’t get a rating as all it does is scrape other sites and often refers you to other search services. They are just going through the motions.

Microsoft and NineMSN’s service again failed dismally; the “cafe” result was poor, “breakfast” looked for B&Bs and “lunch” amazingly didn’t find a thing in Neutral Bay.

Citysearch’s results for “cafe” found nine places, three of which are long closed which indicates the lack of maintenance their database receives. Encouragingly, Citysearch was one of the best performers for lunch and dinner, albeit only on four and six places found.

Eatability had by far the most impressive number of results, however a large proportion of the places have closed and are not flagged as such. This probably indicates a lack of maintenance by the owners.

WOMO was good and like Yelp their results are highly dependent on the words used by reviewers, so key words could be missed simply because reviewers didn’t use them.

Sensis performed well on “cafes” except that three of the ten listed were closed. The lack of results on “breakfast” and “lunch” is due to no places having those words in their name.

Conclusions

This comparison is not scientific, being based on a narrow search and small sample size, but there’s a few things we can take away from the experiment.

Search is still young

Right now, search is still a crude tool.

From the results, we can see that the keywords used by reviewers and businesses matter. If the public are looking for “brunch” and that isn’t on your cafe’s website and online listings, then you won’t appear.

Over time that will change as the web and search engines get smarter but right now search is still at a basic stage in its development.

You have to be there

Customers are using these tools to find what they need and if a business isn’t listed, then they can’t be found. Setting up a profile and getting some favourable reviews is important.

The business who are being pro-active are the ones who are succeeding.

There’s a lot of opportunity

It’s no surprise that older organisations like Fairfax, Sensis and Microsoft are failing to understand local search. What is suprising is how poorly the newer players like Google and Facebook are doing.

This opens up a lot of opportunity for services like Yelp and Foursquare in adding value to the data already available through services like Google, Facebook and Sensis.

Yelp’s tie up with Sensis makes a lot of sense from the US company’s point of view; they get to ride on Sensis’ sales team, maybe some licensing fees and – most importantly – they can access the richest, albeit not always accurate, database of Australian businesses.

For small, local business there’s a lot of opportunity as well. By getting online and registered on these services, it’s possible to become more visible and improve your competitive position.

The market’s young and there’s a lot of potential for disruptive players. It will be interesting to see how incumbents deal with the threat.

Santa’s online business checklist

The run up to Christmas is a good time to make sure essential business information is online

Regardless of what sector your business is in, the web has become the way customers find us. Giving the key information shoppers are looking for is good start to getting their business.

An analysis by search engine giant Google of Australian consumers’ online Christmas shopping habits shows how the web is evolving as it becomes the main way customers discover businesses in the crowded marketplace.

Even if your business isn’t in retail, it’s worthwhile paying attention to the survey as a guide to what customers – both in the business to business (B2B) and business to consumer (B2C) spaces – expect online.

Do you list opening hours?

Number one failure of many sites is they don’t list opening hours or hide them. Warehouses, distributors and suppliers are particularly bad for this and if you’re in retail it is the unforgivable sin.

Your operating hours have to be clearly shown on the front page and come up early on a mobile site, people don’t want to navigate ten menus, subscribe to your newsletter or, worst of all, have to call you to find out if you’re open Sundays or in the evening.

List shut down and public holiday hours

If you’re in an industry that shuts down during the Christmas break, make it clear when you won’t be available.

Sending out a terse email message at 10am on the day of the close down and putting a sticky taped note on the front door that your accounts, receiving or sales department will be shut for two weeks doesn’t help your business or your customers.

Where are your contact details?

Probably the most bizarre aspect of hospitality industry websites is how many bars and restaurants hide their location.

This is fine if you’re one of these Melbourne laneway hipster haunts where only the ‘in-crowd’ are welcome, but most businesses actually want customers to find them.

Have your address and a map on your site showing exactly where you are. If you are in hospitality or retails have a mobile version that shows this first so lost shoppers and taxi drivers can find you.

Are local listings up to date?

A lot of mobile phone applications get their data from services like Google Places and True Local so get your listing up to date with these services, making sure you have accurate Christmas trading hours and that their maps accurately show your location.

The good news for hard pressed retailers is the overseas online threat fades in December as foreign websites can’t guarantee delivery after the first week of the month and local web outlets drop out around the 16^th.

If you want to grab those last minute shoppers – which includes most men – then you’re going to have to make sure they can find you when they pick up their smartphone or log into their computer.

As Telstra have found, people are no longer turning to the phone directory and calling you for information, they expect contact details and opening hours to be clearly on your web site.

The web is where our businesses have to be, so make sure you can be found there.

Cloud Computing Explained: 702 Sydney Weekends

This month’s 702 Sydney Weekend spot looks at cloud computing.

What on earth is cloud computing? Is it just another IT buzzword or something that you can use in your home and business?

On the November 20 ABC Weekends show, Paul and Lex Marinos discussed what cloud computing is and how it can help you.

We also helped out listeners with various computer and tech questions, including the following;

Malware

Sue was caught out by the DNS Changer Trojan that was recently busted by the FBI. Probably the best fix for this is downloading and running the free Malwarebytes software.

Our IT Queries site has instructions on the somewhat convoluted process for removing this Trojan and other viruses from your computer.

Synchronising an iPhone with iCloud and Google Calendars

One advantage we have with the cloud is that it means you can use devices anywhere, however there is a bug where iPhone calendar functions aren’t synchronising with Google Calendar.

Unfortunately the problem is the iCloud and Google services aren’t compatible on the iphone so one has to be turned off.

If your preference is to use the Google services, then you will have to turn off the iCloud services through the iPhone’s settings app and turning off all of the calendar and contact settings.

You may then want to check your Google services are being synchronised through the iTunes settings.

Sharing data between laptops.

One of the advantages with networking is that you can share data between computers. Sonya wanted to know how she can setup her windows 7 laptops to share data to an external drive.

The best option is to use a Windows 7 compatible Network Area Storage device that sits on the network.

For the setup to work, the network name has to be the same on all three devices, Microsoft has instructions for setting Windows7 network name and the hard drive will have the instructions included for setting it up correctly.

It’s also worthwhile using Microsoft’s Active Sync software to synchronise machines as well so you have files stored on your computer.

If you missed Sunday’s ABC program, there’s more details at Netsmarts’ Cloud Computing explained and The Networked Business, we’ll also be running a Demystifying the Cloud webinar on the Australian Businesswomen’s Network at the end of November.

That will probably be the last ABC 702 Weekends spot for 2011 unless there’s something else that comes up.

Subscribers to our newsletter get early notice of any upcoming programs and other useful information on getting more value online. Don’t miss the next program.

Social media’s greatest enemy

Time is working against the social media platforms

Last week Google launched their business Pages function for Google+, which required a business owner to type in almost identical information to the parallel Google Places service.

In the same week Facebook turned off RSS feeds into their status updates, meaning that new pages added to a website now have to be manually entered into Facebook. Tumblr did the same some time ago.

Across the social media industry, the various services are asking users to manually enter updates and details into each platform under the belief that unique user generated content will increase the value of their sites.

That’s all very good for the sites but for those using several services it’s becoming a tiresome chore.

One of the biggest barriers to social media adoption – particularly among time pressed small business owners – is the time involved in maintaining these different services. With the exception of Twitter, most of the services are trying to increase people’s time on their platforms.

For social media services the key measures of how much time users spend on the site is becoming a game of diminishing returns, people have only so much time in the day or so much inclination to spend a large chunk of their free time online.

As the burden of maintaining a digital footprint increases and the value proposition becomes less compelling, particularly as the privacy costs becomes more apparent, more people are finding it all too hard.

Social media services are going to have to show some value for the investment in time and the privacy costs incurred by users, it may well be that many just don’t offer a good enough deal.

Is Google drowning business?

Are there too many online services?

The launch of a pages function for Google+ allowing businesses to create a profile on Google’s social media and identity management service is welcome.

What jumps out immediately is there is no integration with Google Local, meaning that businesses will have to create another online profile and learn the nuances of it.

Right now big and small businesses are being confused by the proliferation of online tools and the problem is made worse by advisors maintaining you have to be on each service actively talking to your customers. That’s nice for a corporation with unlimited funds and resources but a tough ask in the real business world.

By adding another service – that doesn’t integrate with Google’s myriad of services let alone outside platforms like WordPress, Facebook and Twitter – Google are making it hard for businesses to allocate the time and resources to the online world.

What’s more, the terminology is confusing; Google’s rebranding of Local to Places started this and now we’ll see business owners and managers confusing Google+ Pages with Google Places.

That confusion will be understandable as right now the terminology between the two overlaps and it will be difficult to explain the difference to business people who have many other issues to worry about along with this.

One thing we can be sure of is there will be a whole range of strategies tied into Google+ Pages that might, or might not, affect search engine results and – given the ongoing nymwars debacle and the similar mess with Google Places listings – there’s a strong likelihood this program is going to get bogged down in opaque bureaucratic procedures.

It seems different divisions within Google are running their own races; Adwords isn’t talking to Blogger, Analytics aren’t talking to Local and the team running Google+ are taking advantage of senior management’s obsession with social at the expense of Google’s core competencies and their advantages in the local and mobile sectors.

Right now businesses are struggling with the plethora of online services and how to use them in their organisations, Google have to break down their own silos and start integrating their services to make it easier for managers, entrepreneurs and proprietors to use these platforms.

ABC Nightlife: The next wave of smartphones

Paul Wallbank joined Rod Quinn to look at where mobile phones are going.

The world of mobile phones is getting busy again as a whole new range of smartphones appear. Paul Wallbank joined Rod Quinn for ABC Nightlife on October 20 to discuss what the new smartphone wars mean for home and business users.

We’ll be going to air from 10pm, Eastern Australian time across Australia on ABC Local Radio’s Nightlife to look at the following questions;

Why were people disappointed with Apple’s iPhone 4S that was released a few weeks ago?
The big competition are the Google Android phones, what are they doing?
What’s happened to Nokia? They seemed to have lost their domination.
Microsoft were the other big player, what are they doing?
How are the smartphones changing business?
Shopping centres seem to be jumping on board with various social media checkins. What are those?
There’s been a push to online payments, how are the smartphones affecting this?
Are smartphones going to be the big buy for Christmas?
What are the best plans for consumers and business?
How do people deal with telco disputes?

The podcast from the program is available from at Nightlife website, and some of the information we mentioned can be found here;

Dealing with Telco complaints

We’ll be adding more resources in the next few days, the next ABC Nightlife spot is on 23 November and our events page will have more details. If you have any suggestions for future programs or comments on the last show, please let us know as we love your feedback.

Tag: google

The dying Yelp of Sensis

Attempts to stay relevent

Declining values

Competitors’ Missed Opportunities

Lacking a Digital Mindset

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