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Google + eBay: Click-to-Call’s Coming Out Party? August 30, 2006

Posted by NoWires in Local search, Technology, Web.

Recent announcement of partnership between eBay and Google for eBay’s international ad sales is not entirely surprising. After all both companies have formidable presence out side of the US. What is worth noting however, is the prominent mention of Skype and Click-to-Call got in this deal.

Unlike eBay’s earlier similar deal with Yahoo for the US market that doesn’t involve Skype, this deal with Google features Skype as the vehicle that would allow eBay users to call the merchants to complete the transaction. For the international market, especially eBay’s fast growing markets in Asia, this makes a lot of sense. Despite years of infrastructure build out, cost of telephone call is still considerably higher there than developed countries. Skype’s VOIP calls give users there a realistic cheap alternative. On top of that, Skype already have a huge user base in these emerging markets.

This is still early stage of Click-to-Call’s development. However, it appears that both eBay and Google are willing to bet its potential to open up lucrative stream of ad revenue down the road.

What does this move mean for existing Click-to-Call players in the field? Quite a few companies, such as Jambo, Miva, eStara, have been working for years on this concept with varying degree of success. This development is certainly a strong endorsement of the business model. However, given the enormous reach of both these companies, every in the field certainly can feel the pressure.


Local Search and Yellow Pages (2/2) August 24, 2006

Posted by NoWires in Local search, Technology, Web.

Are Yellow Pages a dying breed?

A lot of companies are doing the bidding. Besides search engines like Google and Yahoo that are offering local services with maps, coupons and other features, many startups are aiming at that space as well. Websites such as InsidePages and Judy’s Book are creatinglisting services with social networking features that let consumers create feedbacks. They emphysize the “word-of-mouth” aspect of finding services.

My previous post looked at the current numbers for online and YP accesses. However, the very fact that Yellow Pages are everywhere indicates from a distribution perspective YPs have reached saturation – there is no untapped markets left for them to deliver their product. The only hope of growth is to get more businesses listed in the yellow books and having them placing bigger ad. There they run into their second problem: the yellow book has physical limitations. Any yellow page that is over a couple of inches thick is just not very practical to use.

On the other hand, online services don’t have these issues. One estimate that about 50% of Internet users uses it to look for local services so apparently there area lot of head room. Being online eliminates the size problem altogether. Another advantage of online services are the ability to search – it can be a lot more efficient than browsing if it is done right.

Before you rush out and throw away your Yellow Page book, let’s not forget YPs still have a number of tricks in their bags to fend for themselves. The local ad market is very hard to penetrate. Being the incumbent YPs have an established sales network that gives them the edge. One might argue that this increases the transaction costs and takes away their scalability. That might be true, but one must have penetration before having scalability, especially for newcomers.

Another factor no one should overlook is this: Yellow Pages are closely associated with telephones. You look in Yellow Pages when you want to call somebody. And phone calls are a lot more valuable to merchants than web-clicks. That’s because phone calls typically happens late in the purchasing process, and they give businesses a better chance at closing the deal. Some estimates put the conversion rate of phone calls order of magnitude higher than mouse clicks. That’s why we started seeing online services like Google and AOL begin to experiment with “click-to-call” services.

Promising as online services are, whoever wants to compete with Yellow Pages and create an alternative for finding local businesses will have to find ways to overcome these obstacles.

Did I mention getting rid of print Yellow Pages saves trees?

Local Search and Yellow Pages (1/2) August 23, 2006

Posted by NoWires in Local search, Technology, Web.

Unused Yellow PagesAs Google and Yahoo push their way into the local search with local listing, the eventual demise of print Yellow Pages have be pronounced repeatedly, for example, here and here. And here is a tell-tale picture I came across on Flickr by Larsz which seems to exemplify the down hill slide of Yellow Pages. The very fact that they are laying around at every corner you turn makes it appear to retain very little value. Which self-respecting Googler is going to admit that he is still using the lowly Yellow Pages?

So who uses Yellow Pages now a days?

Well, a lot of us, apparently. According to a July Wall Street Journal article, Americans referred to Yellow Pages over 25 billion times in 2005. In comparison, users conducted 2.7 Billion searches on Google last month. Keep in mind the Google number include ALL searches. Local searches makes up only a fraction of the total number. Here is another set of numbers: Yahoo and Google had combined revenue of about $12B in 2005, whereas Yellow Pages rung up $16B on the local advertising market alone.

Yellow Pages’ numbers appear to be strong. Why are people writing their last rights already?