Seemingly for centuries, mapmakers focused solely on getting from point a to point b, but largely ignored describing the stuff in between in any detail.  And even today it seems if you want to create a mobile app that covers all the places around you, best practices seem to indicate that it’s necessary to use data from many different providers doing a lot of cleaning and matching along the way in order to paint a clear picture. The definitive database of places is still elusive it seems.

That said there are some quite interesting start ups, who aren’t letting that get in the way of trying to gather together even more and greater detailed information related to places. A few that come to mind include companies like Gigwalk, Centzy and Locu.

Gigwalk, seems to take the approach that attempting to gather much of this information via anything other than direct 1st person interaction is fruitless, so what do they do? They pay folks… anyone that downloads the app… to pick up micro, $3 or $4 gigs by walking into retailers and taking pictures, noting the address and generally gathering information about the place. And in this economy with the emergence of services like TaskRabbit, I am sure the supply of GigWalkers is plentiful.

Centzy, seems to also be taking on the direct approach of paying folks to gather things like store hours and pricing, currently focusing on service business in NYC and SF including “facials, hair salons, manicures, massages, pedicures, yoga.” A great article in VentureBeat quotes Centzy as saying that ” less than 25 percent of local service businesses put their prices online” which must make the manual data gather for those categories a necessity.

But evidently restaurants are putting their menus online in mass, which is why a company called Locu is taking a different approach by crawling, scraping and otherwise electronically gathering menus from across the web, and throwing good old patent pending machine learning against it.  Another great article in the Huffington Post covers the all the details,  including the launch of MenuPlatform and Locu’s CEO Rene Reinsberg’s quote on the company’s goal, which is beyond just menus to “create the world’s largest repository of semantically annotated real-time small-business offerings.”

To me what Locu is doing seems the most exciting and interesting and maybe challenging because I’ve felt for a long time that the necessary rich place based data simply doesn’t exist yet on the free Internet. If it did, Google should have already indexed, parsed and done whatever the hell Google does with data to give us better local search results that bridges the divide between digital and physical. But they haven’t… if you really think about it local mobile search result still generally suck.  Locu seems focused on trying to fix that and is doing it seemingly in a very Google-ly way.

I noticed a similar dynamic and two different approaches related to gathering local product inventory between companies like Retailigence (manual data gathering) and Goodzer (web data gathering) and am not sure there is one right approach, and like with the current state of POI data perhaps for a while best practices will require using a little of everything.

On a related note Greg Sterling brought up an interesting point related to the Locu business , which is even if you are successful in gathering good valuable data, with so many others also focused on this area, will it simply become a commodity and how do you form a profitable businesses around being a data supplier?

Perhaps, if you do it well enough you can simply build your own local search application on top of the data?

One of the pieces of news that was making the rounds over the past week, at least in my little corner of the twitter-sphere was news that Watson a computer system baked up by the fun folks at IBM beat the pants off two of the all time best players on the popular trivia show Jeopardy. Like its predecessor Deeper Blue in 1997 who beat the pants off of the then world’s best human chess champion… Watson was designed from the ground up to perform a specific task, and to do it quite well thanks to modern capabilities around processing power, data storage and hundreds of simultaneous algorithms tasked with interpreting the natural human language.

But reading a bit more of the press about the event, something caught my eye, a reference to the fact that Watson doesn’t even use the Internet.  To which my immediate reaction (yes I think I’ve become a jaded and skeptical New Yorker) was something like this, well if it coulda, it woulda, so since it didn’t…  well something is up.   And my suspicions were confirmed when the author of the IBM post was kind enough to elaborate that yes he believed that accessing the free and open Internet for information would have been detrimental to Watson’s performance. Which upon reflection makes all the sense in the world…  why would you sift through the entire Internet of information, when you can carefully curate all the information you need for the job in less that 1 terabyte of data held in 90 servers stacked up back stage.

Now like most people, I don’t have a clue as to how much general knowledge trivia there is in the world, uh… a lot? But am I a little surprised that it  can all be crammed into 90 computers, well yeah I guess so, I’ve never really thought about it. I am certainly impressed with the fact that Watson can fish out any little corner of it in about the same time as it would take Alex to type in the question.

But I guess my whole point here is the bigger picture stuff… the folks at IBM wanted to solve a single problem… find answers to trivia questions.  And with the state of things in the world of processing, data storage and algorithms getting, storing and retrieving that information was best done in a closed environment…  the 1TB of factual data necessary, apparently not that big of a deal.

So getting back to local search. Now I had not dealt with buying or selling web search in quite some time now, but within the past couple of years I have started to go back to shows like SMX East, the east coast edition of one of the larger search marketing trade shows, where the subject of local search is a pretty hot topic these days.  What surprised me a bit is that finding places and things in the real world was generally just viewed as more or less the same as searching for and finding web pages about places and things.

Maybe it’s just me but this just seems downright weird.  The web is home to billion if not trillions of pages of content on topics ranging from what Julie in San Jose had for dinner last night to how to calculate the weight of an African tree frog… 99.9% of which has absolutely nothing to do with what’s in the ½, 5 or 10 mile radius around me where I live the vast majority of my life.

Now if someone can sort out the web stuff that’s relevant to my little physical personal world that would be an improvement, but still people put some pretty useless and irrelevant stuff on the web, thousands of people I don’t know or care about and a huge chunk of retail businesses with no significant web presence to speak of.

What I need is just access to the stuff that is relevant to me, good detailed information on stores and products, people I know or might like to know or communicate with, events, relevant news etc.  Much of this information already exists, but like with Watson, just because it exists doesn’t mean that one can get at it quickly and easily, and sorting through the entire web of content to find it, well just wouldn’t be the best way to do it.

Until last night I wasn’t very aware of what folks were doing in terms of creating hyper local networks, but at the LBS Apps developer meet up last night here in NYC,  a company called Nearverse demo’d  their app LoKast. The application allows an organizer to create an ad hoc local network between users of the application who all share a common space of between 300-1000 ft… using a combination of Bluetooth, wi fi or your cell carriers’ wireless data connection.  With file sharing at its foundation, the idea is to allow folks who share a common space to share, well…almost anything digital that they want, including videos, songs, photos, contacts or webpages.

Now Nearverse doesn’t seem to be looking at areas around local search necessarily, and I am not sure if it really directly fits, but it would seem to support the idea that just because there is the capability to push info out to the one mass Internet doesn’t mean that this is the best and only way to do something. Perhaps million of tiny micro locally relevant Internets that just contain locally relevant data, or a massive database of only locally relevant data that is built around location from the ground up would be two novel ways to help connect people with just the relevant info about the world directly around them.

So anyone that’s been around the online advertising world will be familiar with the famous Google Page Rank algorithm. While maybe no one other than Larry and Sergey truly knows how it works, there are literally small armies of SEM and SEO experts that wake up in the middle of the night in a sweat wondering if they left out an important keyword, or whether they need to pay for links to get a boost for their clients.  It’s a fascinating micro economy that has developed almost exclusively around servicing customers and their interaction with Internet search providers, particularly Google and its $20B in annual revenue.

I haven’t bought search in well over a decade, before Google existed, and am by no means an expert in search, let alone local search, but if you’re looking for more information I’d suggest starting out by reading SEOmoz or Greg Sterlings Skreenwerk blog or reaching out to a local search SEO specialist like David Mihm or Mike Blumenthal who are frequent speakers on those circuits and regularly share some invaluable experiences on their blogs at Mihmorandum and Blumentahals.

But to greatly over simplify, fundamentally there are two main components in play for Google on the web, and how well they translate into a true mobile location aware search is fuzzy at best.  So for the current Google web search here are two key factors being looked at:

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Per John Hanke, VP of Google Earth, Maps, and Local from a recent TechCrunch article : ”PlaceRank is like PageRank for places, it tries to figure out how prominent a place is based on factors such as references on the Web, reviews, photos, how many people know about it, how long its been around.”

By the way I think it’s notable that the thing being “figured out” here is “prominence”.

Now I understand that you’ve got to start somewhere, but I would argue that the tactics used in web search engines don’t really apply to spatial search much and it should be treated as a completely separate animal.  Web pages are about text and the authors of that text linking to (and as a result voting on) other web pages, in order to determine a pages’ ‘prominence’. 

I think there are a few key differences when looking at location and spatial oriented search:

• The “prominence” of a search result is relative to things like distance and the convenience of alternatives in local/spatial search, versus something more absolute in web search where you’re simply clicking on a link to ‘get there’
• Determining “prominence” is very important when parsing through 1 trillion pages of “always available” information, but in the more dynamic yet much more limited options of local search something as simple as solving for “highest prominence” may not be the right answer
• The true “linking” happening to a physical place is not happening on a website, but through foot traffic and phone calls… and the traffic links between places is not captured on a webpage at all, but on a handset or a carriers’ back end logs
•  The stuff being searched for could and should exist in a variety of mediums, not just html on webservers… find a person from their mobile device, find an item from an inventory system, find a bus from a location sensor.

I suspect  that there will be some incremental improvements over time with matching online information to offline stuff, but I also suspect that we’d be better off by blowing up the existing search model and starting over from the ground up with a model designed purely around location specific spatial search, that merely taps into the vast reservoir of online content only when necessary… rather than serving as the foundation.

A company called HelloMetro was busy trying to build up city oriented sites to compete with Citysearch… although it sounds like they’re still a long way off for the moment in terms of size.

The biggest booths seemed reserved for folks trying to create local business directories for consumers like Local.com and Localpages.com and also ReachLocal.com which is trying to create a platform for buying and selling local ads across the existing and search, directory and display ecosystem.

In the current age of search and with all the innovations that the existing search engines are doing to infer local intent (Google 10-pack), the idea of going back and creating a local directory seems so old school, but there they are.

Here is a drill down on what I picked up about Local.com

There are a couple of different components to their business:

Part 1 Local.com the consumer portal.
So not surprisingly people aren’t consulting the Yellow Pages as much anymore to find a businesses in their town… and in the ideal world of the folks at local.com, you’d now simply go to local.com to find your neighborhood plumber or window washer. And if that were to happen en masse local.com would be getting a nice chunk of the current $12-13 billion or so spent in yellow pages advertising every year.
It makes sense, except that folks are generally turning to traditional search engines like Google and Bing as the first place they go looking for local business information… and those search giants have most notable stepped up their local search game in the past year instead.

Local.com triple dips with every search query (see presentation at end of post)  first presenting Yahoo result followed by Superpages and finally their own internally sold business listings. And it’s important to note that over half of those search queries aren’t happening organically… Local.com spent $19 million in ads on other search engines in order to bring in $39 million in gross revenue (before rev shares/commissions). So lets say for example that they can buy the term “San Diego Florists” for $1 per click on Google but can then turn around and earn 75 cents from the Yahoo listing on Local.com and another 50 cents from the Superpages listing and an additional 25 cents from a Local.com direct deal with San Diego area florists… that’s not a bad scheme… $1 going out and $1.50 coming in.

Part 2. The Local.com Syndication Network.
The local syndication network is essentially the same offering as on local.com but instead provided as a white labeled solution to local media companies like newspapers and radio stations. So the local newspaper in Little Rock can offer the local search capability on their site and also presumably leverage their ad sales connection in the local community and profit from bringing in new clients.
Local has some patents in this area and has struck a few licensing deals related to helping improve local search… but the revenue from this is quite small so far.

While I would agree with the company that this is not purely a search arbitrage company, there is a fair amount of organic traffic coming directly to the site and its network… but you can’t help but wonder what will happen as folks like Google continue to improve on their ability to deliver local oriented search result… will a stand alone local business finder still be necessary? Is this company just providing a stop gap solution to solve a temporary problem caused by the shortcomings of the major search engines to effectively handle local oriented searches?
One very telling stat in my mind is that the company currently makes just 27 cents per unique visitor, this is compared to $4-5 in ad revenue for a good quality vertical content site, and the double digits figures that someone like Google makes. In theory the highly targeted local searcher with a strong pre disposition for actually going on to make a purchase should command a huge premium… and the fact that its not is a little worrisome.

There is a huge future in connecting the local customer to local businesses using various types of technology, it will be interesting to see where local.com can take it from where they are today.

It does bring up some interesting issues like why in the world would Google not regulate this more closely and why they feel the need to allow users to have free reign over a core part of a Google product… even when it has the potential to erode the quality of the product.

I think the answer is tied to both the economic and ideals over at Google.