Bridging the Gap
As CEO Heath Clarke explains it, Local.com got into business to serve a need that wasn’t being filled by either the Internet Yellow Pages providers or traditional search engines.
Its parent company Interchange produced first a downloadable product-search application in 1999 and then a Web-based search engine. In 2003 Interchange developed patented search technology KeyWordDNA and built it into a new LocalDirect search/advertising platform that launched the following year. LocalDirect was marketed mainly to regional newspaper sites and online directories.
“We looked at the performance of the online directories back in the day and found that their search technology was very poor,” Clarke says. “Failure rates were as high as 25%. So we set about finding a way to make the business listings that reside in a database more searchable.”
Google and the other ranking algorithms were no help here, since they depend on assessing the authority of inbound links to assign page ranks. Business listings don’t use links.
Instead, Interchange compiled a database of business listings that includes relevant information such as generic products and services offered, similar competitors in a neighborhood, population densities in markets served, and even proximity to local landmarks.
In 2005, right after going through an IPO, the company made a decision to develop its own search brand rather than license its platform to others.
“We realized we needed to have our own brand,” Clarke says. “The online directories weren’t thinking strategically, and we didn’t feel it was wise to place our future in the hands of companies that perhaps didn’t get local search as well as we did.” The company acquired the Local.com domain, and with the addition of some Web-crawling technology, Local.com went into beta launch in August of that year.
Local.com’s Web crawler looks specifically for data relevant to a local business search and thus throws out about 89% of the pages it spiders, Clarke says.
“The KeyWordDNA component gives us an advantage over the Googles and Yahoo!s as they add information from their own Web indexes, and the Web crawler gives us an advantage over the online directories that don’t have that,” he says. “We believe that gives us some of the freshest content in local search, and the most relevant.”
And according to Clarke, those advantages will let the search engine make headway against its most direct competitors, the Internet Yellow Pages.
“Ultimately, we’re not competing against Google and Yahoo! in local,” he says. “They’re going to do some interesting things, but they’re not really getting anywhere. Neither are the [Internet Yellow Pages] directories. So we think we have a shot at being No. 1 in the directory space.”
A comScore study of Internet Yellow Pages searches in the United States last July ranked Local.com as the fourth most-trafficked pure-play local search, behind SuperPages, Whitepages and Citysearch. The study gave Local.com a 5.9% share of searches that returned business listings, about one-fifth the 23.9% share of market leader Yahoo!
Many of those names have made deals to distribute various types of performance ads — banners, display and text search ads — on Local.com: “coopetition” at its most classic. Last year, Local.com focused on building that market share and on monetizing its pages throughad partnerships.
But in early April, Local.com starting offering local businesses a chance to change their profile information through a self-service link on the site. Merchants could update their business name, description and contact information. The thinking is that many small local businesses still don’t have a Web presence, and that giving them exposure in the Local.com index may entice them to market their shops online, including with Local.com.
To that end, the local engine has also introduced Local Verified, a marketing program that offers preferred placement in relevant Local.com search results for a flat annual fee of $249. Businesses get to show a phone number, address, map and a detailed business description in a location at the top of their relevant business and geographic categories. Listings will be highlighted with different colored fonts and tag lines can be added to advertisements. Clarke stresses that information will be checked to prevent fraud, and the businesses promoting through Local Verified will have to be in good standing with the Better Business Bureau.
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