It’s not that I don’t think local review content is important, really, it is. It’s just that this type of stuff has to have been some of the earliest content on the Internet, I am sure some of the early messages across ARPANETwere something like “took Molly to Surf Shack on Wilshire after switch testing last night, fish tacos were keen”.   It just seems like sometimes it just takes FOREVER to not make much progress in Internet land.

You have to give Yelp a lot of the credit for the current surge of interest, not only is it a pretty valuable service, but the Google + Yelp  deal that never happened,  and now the Yelp business practices lawsuits have kept them on the front cover of the business section for a while now.

So if you wanted to reinvent this baby one more time, what might you do? Well let’s check under the hood of Alikelist. 

First of all, while it’s a horrible name, it does pretty much sum up what its all about, it’s a list of places you like… so in that sense right off the bat its not a traditional review site at all where the general public pretends to be the next A.A. Gill, giving their two cents on every joint in town.  So that’s it, stuff you like in a list… if you want to talk about stuff you don’t like, well go to a different site, not here. 

Beside the fact that its all positive stuff, another important differentiator is that it’s also not about the anonymous general computing public. It’s not just about WHAT comments are being made about the local businesses, but more importantly WHO is behind those comments.  This has always been the shortcoming of existing review sites… you have no idea who is doing the talking, and whether they’re someone you should be listening to.  There are a multitude of features in ALikeList which allows folks to tie back into their social networks to ask for and receive recommendations on local businesses which make this a key component.

Alikelist is a site to discover the places that your friends, family and colleagues like, and to read a little bit more on why they like the places they like. It simply tries to digitize that conversation that must happen a million times a day offline “Hey Bob, I am looking for a good xxx, do you have any suggestions?”… followed closely by “oh yeah, lemme think… well try xxx,  they were awesome.”

The idea and site execution is great because of it’s pure simplicity. People offer up their opinions on businesses online all over the place, but in many ways it’s all become a big convoluted mess, there is not one central place to go look, and there are often hundreds of long reviews written by folks like bigjoe23 to sort through in order to formulate an opinion. Alikelist thinks that a simple thumbs-up and blurb from a more trusted source will nicely supplement, if not trump, hundreds of longer reviews from the bigjoe23’s of the world.

Like with Foursquare and their check-ins, the business opportunity seems to be largely around allowing those local businesses to better connect with their best patrons in the local community, the ones who not only visit their establishments, but who are walking advertisements for their businesses via their check ins and Ilikelist status broadcast out to their social networks.

Well after giving it a bit more thought, I’ve come to the conclusion that the industry needs a more broad “presence at place of sale” (PAPOS?) metric that could capture all the events where a person actually walks into a brick and mortar retailer and that action is recorded by any available means.

The PAPOS could then be looped back into the marketing ecosystem serving as the click or conversion rate for all advertising, both on and offline, targeted at driving brick and mortar foot traffic. When consumers actively check in somewhere that is fantastic, but I think it’s a bit unrealistic to expect this to become a ubiquitous consumer behavior, and it’s certainly not the only way to know when someone is in a retail store. Besides the 100% active way of checking in, there is of course the 100% passive way where your phone location is just recorded in carrier location logs, and many, many things in between like credit card and loyalty card swipes at retail and of course the wi fi and GPS positioning directly in the phone which enables all those great mobile discovery and navigation apps.

I suspect that the active and explicit way of registering PAPOS through check ins will be pretty limited and much will be inferred or recorded through other methods, you’d figure some company will just find a way to throw up 14 million geo fences around all of the retailers of America and fire back geo pixel trackers each time a mobile device enters a place of interest!

A more systematic way of recording PAPOS would go a long way in opening up the world of mobile and local digital advertising… which currently suffers from a serious disconnect when measuring ad effectiveness when they’re looking to drive offline foot traffic… tracking click to call is ok, but how often do you find yourself calling your local McDonalds? “Uh Excuse me, do you have chicken nuggets in stock today, I just want to be sure before I drove on over?”  HA!

NYC based Foursquare has undoubtedly been the leader in this area and their success seems to be attracting a lot of imitators.

Here are some thoughts on the importance of check ins and the ensuing pile on we’re about to see of folks adding on the feature.

Why Check Ins are interesting: 

•  for retailers, particularly places like restaurant, their regular customers are the bread and butter of their existence and they need to be well taken care of. For years stores have offered reward cards to reward their customers with their loyalty and repeat business. In one respect mobile check in’s are a modern twist on consumers registering their loyalty to a business… customers that 1. check in at a business often and 2. want to tell all their friends all about it, should be treated like gods by those retailers… not only are they reliable repeat customers, but they’re great marketers for the business as well.
• for the consumer and their social network what you say you do on your Facebook updates is one thing, but what you actually do and where you go is sometimes so much more telling and valuable. It adds another dimension to what people know about you, and what you want to tell the world about yourself. Since its driven from the mobile device, information is both timely and relevant to the immediate world around you, making it potentially more valuable than similar web services which are more like a history book than a telephone.
• having a bunch of strangers write out their opinion on various retail establishments is often valuable, but at the end of the day they’re very often nameless, faceless strangers… you may agree with them, or you may not… if enough nameless faceless strangers are all saying the same thing then the odds are that you may feel the same way as everyone else. But with the check ins and comments tied to your social network, you can take into account who is saying what and can factor in that knowledge.

What would make check ins VERY interesting.

• check-ins develop into the click rate for the geoweb. On the web, much of the advertising economy hinges on getting folks to click through and check out a web site, something advertisers are often willing to pay big bucks for. Within the geoweb, a check-in could be a similar proof of performance for mobile advertising, show them an ad for Sonny’s Restaurant on UrbanSpoon and they later check in at Sonny’s for the first time? That can be priced not too much different than a CPC deal.
• analysis of a pattern of check ins, in aggregate over time for predictive analysis and ad targeting. This is already pretty standard stuff on the web with behavioral targeting capabilities and if you like this you’ll also like this functionality. So it would only be natural to extend this to the mobile and geoweb.

Why in the future, check-in’s may not matter so much

• well theoretically you shouldn’t need to have someone press a button on their phone to tell you that they went somewhere. The technology already in place in the U.s. already knows your location without you having to do anything except walk around with your phone on. Folks like Sense Networks already get access to aggregated location data like this from wireless carriers and use it to allow businesses to make better marketing decisions, no check ins required. I do suspect that there could be a line drawn between the self reported locates and those aggregated and anonymous locations, with the former available for more widespread and individually targetable marketing uses.

It will be interesting to see how things progress between the self reported locates provided by check ins and the just plain looking up location and tying them back to a place.

Anyone can make the functionality to allow folks to check in somewhere, that’s not a big deal, what is a big deal is getting people to actually use it and use it a lot, and then how you make use of the information once you have it.

So when I heard about Yelp adding the functionality I checked it out buried in a drop down menu somewhere, my first thought was well that seems pretty useless, what’s the point of me checking in on Yelp, its a restaurant review site for me, and that’s it, no one except me will know I checked in or care.  There was nothing in it for me to check in.  Now if Facebook added the feature, that could be a different matter… it all depends on how they do it and what is in it for me if they do.

I love Yelp and use it frequently, and to a degree I get the rationale on why its a potentially attractive acquisition, particularly for someone like Google that is looking so aggressively at targeting the local brick and mortar businesses, and their advertising budget. Yelp has many of the right relationships with local advertisers and at the same time has a nice content creation tool and user base who rabidly create tons of local oriented content… all a very nice fit with what Google does and where they’re looking to grow.

 But the deal between Microsoft and Localeze in my mind directly tries to fix something that is currently wrong when you search for local businesses. So many times I try to fire up a mobile browser in the hopes of searching for things around me, and so many times the experience is just so damn underwhelming. No sign of businesses that have existed for years and years, no understanding that I am a consumer looking to walk into a retailer and dont care if someone deep in the skyscraper in front of me runs a web LLC out of their apartment on the 25th floor.

I can still stand on the sidewalk peering into the window outside of Sohpie’s Cuban Cuisine staring at huge baskets filled with yummy empanadas and then turn and do a mobile search for the term ‘empanadas’ and end up being directed to go miles away to Empanada Joe’s, Empanada Mama’s, and Reuben’s Empanadas.

Currently the local search solutions are either far too simplistic in understanding the search query… ie search for ‘empanadas’ and get back a list of places with ‘empanada’ in their business names, or they return 372,000 page that match the place and the term ‘empanada’ which is an unwieldy mess to sort through if you’re just standing on the corner with 15 minutes of your lunch break left.

Localeze clearly has this problem in their sights and is looking to help connect mobile searchers with the closest place to fill their bellys with empanadas even if the place selling you those empandas is called Sophies.

For Google at least, there may be a day when all of those Yelpers will rave about the great empanadas at Sophies and the Google algorithm would put aside those 371k other pages, and put two and two together and match the Yelp content about empanadas at Sophies with the Sophie’s business listing and give me a great search result. But the problem for Google may be that it’s special sauce is built around links (and votes) between web pages not necessarily analyzing the content or intent of the words within pages… so whether or not Google can effectively and reliably make that connection, particularly without owning the content is still a big TBD.

• Google already has over a million and a half advertisers across its global business, sounds like a lot huh? Well there are 16 million local businesses listings in Yelp alone, so there are still a ton of potential advertisers who don’t use Google… and the ones that the Yelp sales team deals with everyday are of the local brick and mortar store variety, the same ones that very often don’t even have a web presence, let alone an AdWords account.
• Google already developed Google Place Pages to give every place on earth a webpage.  Yes very philanthropic and all, and yes now it’s great that the Central Park Carousel now has its own web page.  But one of the expected by-products of creating PlacePages was that those brick and mortar retailers who never really cared much for the web and didn’t have a relationship with Google, would wake up and say ‘wow, now I have a web page? thanks Google, let me claim it, and build on it, and take care of it and oh yes buy some advertising to promote it.’  It’s just possible that the initial reaction Google is seeing is that it’s not going to be that easy and maybe they need someone like the sometimes heavy handed Yelp sales force on the phone to force the issue a bit.
• Google lives and dies off of the creation of content and information on the web.  In the same way that it wanted to own Blogger in order to be closer to those who have created 332 million pages of blog content on anything from pet Schnauzers to the history of the bowling ball, Yelp has established itself as an important tool and industry leader for folks wanting to create content  focused on the local community and businesses… some use the term ‘lifestyle blog’.  While it looks like Google only indexes a far more mundane 25 million pages of content on Yelp, the commercial potential for this content is in many ways much more rich, since there are real live companies with ad budgets behind many of the pages, and something there to be bought and sold which makes it fertile ground for advertising demand.  

Some interesting numbers to consider:

• Size of the quickly dying yellow pages business: $15 billion. Will your Yellow Pages Rep be replaced with a Yelp Rep that down the road could be a major seller of AdWords as the new alternative to that yellow pages ad? It would mean more money in Google’s pocket versus relying on local re sellers.
•  Yelp currently has 8.5 million reviews, with 3 million businesses having at least one review… that’s almost $65 per review at the rumored buyout price.  Seems high, but not crazy high considering what people pay for an Associated Content piece… and it will only grow from here at little to no cost to Yelp.
• Yelp sells an estimated $30-40 million per year in advertising via 200 local sales people, I couldn’t find an advertiser count for Yelp except for some off handed remarks about having “tens of thousands of businesses accounts”, but using as an estimated 1.5 million advertisers for Google generating $22 Billion in annual revenue, the average advertiser on Google is worth nearly $15k in revenue… I’d hazard a guess that this is at least 5-10x what Yelp is getting, probably much higher.  So the opportunity to get more out of the Yelp field sales team by giving them more to sell seems significant.