The DEMO conference is happening in SoCal this week (not there, trying to get some writing done) and there are some interesting developments that concern local:

Local Matters announced its next-generation local search platform. I saw a very early version in January of this year and it was highly impressive. I'm waiting for the busy and elusive Perry Evans to update me. I just got the update: very nice interface and functionality. I'll write more later.

Jingle Networks launched "free 411." I'm writing more about this for the Local Media Journal. But basically this is free-to-consumer, ad-supported directory assistance combined with a PPCall ad model. No Web site, no landing page is required; it's purely phone based. The company is launching with an impressive list of advertisers, but when consumers call for non-advertisers, they'll hear a "switch pitch" offer for a competitor if that competitor is a Jingle Advertiser. The company has a very ingenious sales channel as well. There are of course challenges, which I'll discuss later.

The Swedish publisher Eniro AB is buying its Norwegian rival Findexa A/S for a combination of cash and new shares worth roughly 7.9 billion Swedish kroner (about US$1.01 billion). The deal will further strengthen Eniro’s position in the Nordic market, giving it the dominant position in print and online directories in Sweden and Norway, along with a challenger position in Denmark and a strong competitor position in Finland.

Eniro CEO Tomas Franzen is positioning the deal as a way to strengthen its home market position, increase cost efficiency and develop a more efficient capital structure. Also, in an era where Eniro’s core business in Sweden has faltered, acquisition growth can serve as a substitute for core growth, and the increased scale gives Eniro more customers to reach with multiple product offerings.

Franzen made it clear when he joined Eniro that he would focus on strengthening Eniro’s position in its core Nordic market, making peripheral markets non-strategic. Soon after, Eniro sold off many Eastern European operations. An exception was made for Poland, where the Eniro property has performed pretty well. This acquisition is certainly consistent with Franzen’s pledge.

Eniro was a very strong print + online player in the Nordic market before this deal. After Findexa, it would appear that all roads to the Nordic SME market lead will go through Stockholm.

There are lots of broadband data — seemingly contradictory — now running around in the market. Pew says: Growth has slowed and will be flat. Nielsen says it's up and continuing to grow: "Two out of every five Americans has broadband." Rumors about a national (U.S.) Google WiFi network still are vigorously circulating.

To make a very simple, self-evident statement, the continued growth of a range of Internet products and services (not to mention search) hinges to a large degree on continuing broadband adoption (let's put aside wireless for the moment).

In July, a WSJ story (cited by Reuters in this excerpt) reported the following:

Google Inc. , Goldman Sachs Group Inc. and Hearst Corp. are investing about $100 million in Current Communications Group, a start-up that
offers high-speed Internet connections over electricity lines, The Wall Street Journal reported on Thursday. Current Communications, of Germantown, Maryland, uses a technology that sends Internet signals over regular power lines, the newspaper said, citing people familiar with the situation.

Now there's this related development: A new chip developed by Matsushita in Japan allows ordinary electrical outlets to become high-speed connections without any Ethernet connection.

This gives new meaning to "plug 'n' play."

The totality of technological developments, including those above, combined with competitive pressures in the marketplace, argue that broadband growth in the U.S. (and around the globe) will continue until it reaches very high penetration rates (time is the only true "X factor" here). South Korea, the most wired country in the world, for example, has almost 100 percent Internet penetration, about 75 percent of which is through very high-speed connections.

Broadband growth = growth of broadband consumer behavior patterns, which The Kelsey Group and others have documented fairly extensively.

It was a very interesting day yesterday at DDC2005, which saw keynote speeches from Dex Media's George Burnett and YellowBook's Joe Walsh (both of which seemed to elicit strong reactions) and videotaped interviews of SME advertiser interviews about their advertising budgets and behaviors (many had pointed things to say). There was also lots of interesting conversation outside the sessions on a range of relevant subjects — too much to summarize at this point.

Let's say that the whole local media landscape is getting more and more complex (and interesting). Right now I wanted to cover a range of things that happened in the news or elsewhere yesterday. I only have time for a few quick hits . . .

• SEM Reach Local announced a deal with TMP Directional Marketing (whose parent Monster Worldwide owns Monster.com), which is the largest Yellow Pages agency, to offer all of TMP's 600,000 locally oriented businesses access to Reach Local's platform and marketing distribution. According to the press release, "ReachLocal will offer TMP clients its patent-pending online marketing platform as part of an overall service that includes complete search engine campaign set-up and management, simplification of online media buying across multiple online publishers — including Google, Yahoo and Verizon SuperPages — and robust campaign reporting with sophisticated phone call and web activity tracking." So, obviously, this is a huge deal for Reach and potentially brings many thousands more local businesses (or local offices of national brands) into local search.
• Meanwhile over at TMP's sister company Monster.com, Monster Worldwide's CEO Andrew McKelvey was quoted as saying that Monster is not going to grow by taking share from its primary competitors (newspaper-owned CareerBuilder or Yahoo!'s HotJobs), but by taking business from print newspapers. CareerBuilder is the category leader. Print recruitment revenues were $4.6 billion in 2004 (NAA), while online revenues were approximately $800 million (Kelsey Group).
• At MediaPost's OMMA East conference in New York, going on now, there was a local search panel yesterday. According to the write-up, the big takeaway seems to be: limited inventory captured by national advertisers = barriers to local business access to local search inventory/opportunities. Yes, and? (There are plenty of other barriers too, the article mentions a couple.) As the YPA's Neg Norton (who was on the panel) apparently suggested, most true local businesses will only get access to desirable search inventory through intermediaries (e.g., YP publishers, local SEMs, newspapers, Web hosts). I had dinner with the Insider Pages crew here at DDC last night. And those guys are doing a great job of driving traffic on behalf of local advertisers. ServiceMagic and HomeGain are some other examples of intermediaries driving local search traffic on behalf of SMEs. As I've alluded to, there's a kind of "local search ecosystem" that has emerged. The story is much more complicated than the media are generally reporting (or typically interested in reporting).
• Jupiter released a wireless study yesterday — leading with another anti-local search headline — that indicated users were not willing to pay for local content on their cellphones. Again, in fairness, I haven't seen the report. The release doesn't entirely make sense; although I suppose they are talking about subscription services specifically for local content. I agree; I certainly wouldn't want to pay for such services on top of the already too-high cost of my wireless minutes. Yet ad-supported models on wireless devices are fundamentally tricky for too many reasons to go into now; however, it's very clear that users want local content on their cellphones above almost any other type of content. Local content/search on wireless phones is a big opportunity but nobody's yet figured out the user experience that will drive adoption (that then could yield monetization scenarios).
• Yahoo! released findings from a global youth study about media habits and attitudes. The research (with 13- to 24-year-olds in 11 countries) was massive and has tons of interesting findings. Among them that personalization is a key element of the youth culture's expectations of media. This echoes Jerry Yang's "from mass media to my media" keynote interview comments at SES in New York earlier this year. The research also shows the importance of community, wireless and the rise of the Internet generally. I'll explore the findings more in the next Local Media Journal.
• Platform provider Innovectra announced the launch of Alltel Local online. Alltel is a YP publisher based in Lincoln, Nebraska. The company will enable Alltel sell PPC and PPCall programs to the local merchant base it serves.

I'd like to go on, but I've got to prepare for my panels today.        

There are lots of things happening and announcements in the local space. However, I'm in the thick of conference schmoozing so I'm just stealing a few moments to mention something that Peter Zollman reported to me about Google launching classifieds (via partners). For more see Peter's press release. What this does is provide more complete local coverage in Google results. For Google's partners it will mean additional distribution. Google's competitors already have classifieds, typically organized as separate subdomains.

What will be interesting to see is whether Google tries to create a special classifieds marketplace separate from search results (a la Google Local). eBay has made a big push into classifieds lately and several classifieds aggregators have emerged (e.g., Indeed, Oodle). And then, of course, there's Craigslist.

Here are some questions:

• What form will this ultimately take?
• How will it affect newspapers (competition, distribution or both)?
• What about direct advertiser relationships?

There are probably plenty of verticals eager to deliver a feed to Google for the promise of traffic. All this remains to be seen.

I'll do more on a full range of things later tonight.

While Housingmaps is a novel "mashup" (third-party data on top of maps) Redfin is the real thing. The folks at InfoSpace alerted me to this when I was visiting them in Seattle last week.

This is EXACTLY what we've been talking about regarding the monetization potential for maps and local search.

It's a map-based local (real estate) search site with advertising. Redfin is only available in Seattle, but it is noteworthy for many reasons.

First, it offers better resolution than what's otherwise available online via satellite mapping. While HousingMaps uses Craigslist data, this has complete MLS data (for Seattle). It also features lots of internal and external photographs, detailed property descriptions and personalization features.

Google and Yahoo! are now permitting (via an API) third parties to layer data on top of their maps (a la HousingMaps). Yahoo! insists upon hosting the maps, whereas Google will allow third-party developers to put the maps on their own sites.

You can see it coming: Someone is going to potentially create a Redfin nationally with Google Maps before Google. For its part, Yahoo! should integrate maps into its real estate vertical.

The folks that can tackle this on a national scale will create an enormously powerful (and lucrative) vertical. Portals, search engines, real estate verticals (e.g., HomeGain) and, especially, newspapers take note.

Print real-estate classifieds were worth $4.2 billion in 2004, according to the NAA. As sites like Redfin develop across the country and more consumers use the Internet for home buying, that offline ad revenue is increasingly under pressure, which is why Classified Ventures bought HomeGain.

Newspapers must develop this type of dynamic (Redfin) functionality for their branded sites or risk losing consumers — and eventually advertisers — to others online, including their own verticals.

We noted several stories last week that reported Universal McCann’s longtime ad forecaster Bob Coen had downgraded his 2005 U.S. advertising outlook, which was issued in December 2004. The revised outlook calls for U.S. total advertrising growing by 5.7 percent and international advertising by 5.9 percent. The previous forecast called for growth of 6.4 percent and 5.8 percent, respectively.

Coen cited the lack of Olympic and political advertising, among other factors, for the reduction of U.S. advertising growth. We find this explanation curious, since those factors were clearly visible in December 2004. Other factors noted include higher TV prices and fear of running afoul of Sarbanes-Oxley regulators.

Whatever the cause, the downgrade may not be very significant for the directory industry, since few if any of the cited causes will have a major impact on print or online Yellow Pages. Rather than fear the uncontrollable, the directory business should remain focused on its core challenges, which include finding a relevant position in a rapidly changing marketplace.

There are some signs of success, or at least hopefulness, out there. The Dayton (Ohio) Business Journal just profiled local company Berry Co. The article notes that Berry is considering building a new call center, in large part to handle the additional capacity it will take on to handle sales of YellowPages.com, which is co-owned by Berry’s parent, BellSouth.

Google wi-fi broadband network? — Om Malik hypothesizes. This would be potentially very appealing for both for consumers and advertisers (creates more reliable geotargeting).

"Appealing?" Perhaps that's too tepid — more like boom chaka laka!

If it was free (Google might be advised to charge nominally) it would kill the business models of T-Mobile, Cingular and others that provide (and bill for) wi-fi access from Starbucks, airport locations and more. And if it was truly national, it might also start to pinch the likes of Comcast (my ISP).

In that scenario, Google becomes a telco and would create many enemies. Let's see if it's real.

Almost everyone from The Kelsey Group is in Denver for most of this week for our annual directories/Yellow Pages conference, DDC2005. I'm still working furiously to get some things accomplished before I join them tomorrow.

So, for now, here are some quick hits on the news today:

• MSN's AdCenter formally launches today in France and Singapore (in '06 in the U.S.): the much-touted demographic targeting is built on Hotmail (and Passport) registrations. Here's the press release. AdCenter should compel more data/analytics about targeting and ad performance to be integrated into the Yahoo! (which has more registered users and has experimented with demo-behavioral targeting) and Google programs in the future (and potentially call tracking).
• The IAB and PricewaterhouseCoopers put out their report on the first half of 2005. Internet advertising revenues (U.S.) were a reported $5.8 billion, which was a 26% increase over the same period last year. Search was the largest revenue category: 40% of the total at $2.3 billion. Interestingly search maintained the same share but grew by $500 million vs. the same period last year when it was worth just over $1.8 billion.
• InfoSpace announced the launch of a new Mobile-Local (Mo-Lo) Search application. Leveraging its carrier relationships and InfoSpace/Switchboard content/search assets, the app uses GPS and other methods to locate users and offer a range of local services. The online search and directory players, as well as carriers and a range of other technology companies (and DA-related providers), are working overtime to make Mo-Lo Search work. Nobody's cracked the code and it's unclear when that will happen. ("Waiting for Wireless" [re the user experience] is on the ILM:05 agenda.)
• Late last week the folks over at The Pew Internet & American Life Project issued a report that takes a generally bearish look at the near future of broadband adoption in the U.S. The document asserts that 53 percent of U.S. Internet households now have a broadband connection (there are a range of numbers in the marketplace — TKG's is 57 percent). However, it also asserts that 32 percent of the adult U.S. population does not use the Internet at all and that virtually all the pent-up demand for high-speed access has now run its course in the U.S. Accordingly, the Pew report suggests dramatically slowed growth for broadband absent structural or dramatic government policy changes to promote further adoption. (For many reasons, I believe broadband will continue its growth.)
• Yahoo! is going to create original finance content with some marquee names. That, plus Yahoo!'s recent news "acquisition" of Kevin Sites + Lloyd Braun + Terry Semel = more original content on the way.
• Speaking of content, Google Video upgrades and improvements launched today (e.g., no software downloads required now), together with the ability to view full episodes of UPN's Everybody Hates Chris. Beyond the fact that lots of video content that never appears on TV/cable will be available online, this Google-UPN relationship suggests how traditional video content producers might leverage search as a way to extend their brands/products and reach larger — and more targeted/devoted — audiences at the same time.
• (Per Paid Content) Intermix founder and big shareholder Brad Greenspan tries to thwart the News Corp. acquisition of MySpace (apparently because he thinks the US$580 million deal undervalues the company!).
• AOL.com officially emerges from beta today.

That's it for now.

Nielsen//NetRatings issued some very interesting findings late this week that should give newspapers a considerable boost. The company found that "online readers in nine of the top 10 local markets were loyal to the city's top newspaper Web site."

In terms of percent of local market penetrated by online newspaper editions, here were Nielsen’s findings:

• WashingtonPost.com — 30.1
• Boston.com/Boston Globe — 28.3
• AJC.com/Atlanta Journal-Constitution — 26.4
• NYTimes.com — 21.9
• ChicagoTribune.com — 21.0
• SeattleTimes.com — 16.7
• DallasNews.com — 15.9
• LATimes.com — 15.4
• SFGate.com/SF Chronicle — 13.9

Of the top 10 cities that Nielsen//NetRatings surveyed, Philadelphia was the only one in which the local paper's Web site was not the most popular. There, USA Today captured the greatest market share (9.6 percent). KRD's Philly.com was a close second with 9.2 percent penetration. (Scroll, lower right for Tribe.net integration.)

What this suggests is that the newspapers have successfully leveraged their offline brands online and built loyal audiences. It equally suggests the power and importance of true local content to the online audience.

When you combine the Nielsen findings with those of an earlier survey by BURST! Media, which found that the majority of online users were interested in news content above all other types (62 percent), it shows that newspapers are in a very strong position and have a window of opportunity to extend their local brands beyond news/editorial content to become more comprehensive local content and ad portals.

As print editions struggle, online editions are growing — even though in real dollars, they con't yet compete with offline revenues.

On Thursday this past week, I had a very interesting conversation with Michael Yavonditte, CEO of Quigo, about what the company is doing in the newpaper space. Most of the conversation was "off the record" so I can't reproduce it here. But his company is building impressive products that are helping newspapers become more competitive and "self-determined" on the advertising front.

Mr. Yavonditte will be at ILM:05 speaking about local, contextual advertising (scroll for panel description) and other subjects.