Free directory assistance services, funded by pay-per-call ads, have been rolled out by a number of entrepreneurial companies, telcos and Yellow Pages publishers. But now comes The Florida Times-Union, which quietly rolled out a local version of Say Hello Inc. (formerly America Says Hello) four weeks ago. The FTU, which has a daily circulation of 169,000, is based in Jacksonville. It is the flagship for Morris Communication, the lead investor in Say Hello’s initial $1.2 million funding.

Newspapers may have déjà vu when it comes to voice services, having generally lost money on audiotex services in the 1980s and early 1990s. But Say Hello hopes mobile access, better capabilities and a strong pay-per-call model will inspire them to take a second look.

If the FTU’s free DA service is successful, it is expected to serve as a prototype for other free DA services built in partnership with a network of newspapers and TV stations. By relying on their local sales and promotional capabilities, and their content, Say Hello CEO Jim Geddes says the company could launch deeper and cheaper than any other competitor – especially national competitors – at “half the capitalization.”

Say Hello features local area codes, as opposed to toll-free 800 numbers. As for content, Say Hello is integrating real estate and auto data feeds directly from The FTU and is also adding movie, sports and weather info. It hopes to work with other papers on the same basis. In addition to the newspaper’s data feeds, Say Hello provides White Pages from Nuance and Yellow Pages from a provider to be named later this week.

Geddes is appearing on a free DA panel I am moderating at our Directory Driven Commerce conference in Reston, Virginia, this September. Other execs on the panel come from V-Enable, Call Genie and Jingle Networks.

Hyper-local neighborhood search site StreetAdvisor launched a series of features today that aim to make it more social. The Australian start-up launched in March as a place to share and comment on all things to do with your neighborhood.

Today’s new features offer insider views and a “local experts” program that lets locals comment on everything from the service at the coffee shop on the corner to the loud music played by the college grads across the street.

Among other things, this could give new home owners or renters the “real story” on a particular neighborhood. Other uses for the site, such as travel tools, real estate, business search, directional advertising and monetization could develop over time.

Wired or Tired?

The site’s features also include reviews that are delineated by street and mashed into overall scores and star-based ratings in five categories: “vibe” (restaurants, bars, etc.); “wired” (connectivity); “health” (safety, air quality, etc.); “value” (property); and “essentials” (water quality, sanitation, utilities, etc.)

(click image to expand)

There are also more specific drill downs into 22 qualitative measures, based on structured reviews that are searchable and also include a slider bar that let you choose which factors are most important in neighborhood searches.

For more free-form comments on streets and neighborhoods, there are community guidebooks and “streetboards” where any comments can be posted on a given street or neighborhood and that also launch topic threads. These are similar to the community discussion tools in many hyper-local sites, such as Outside.in, and have been enhanced to include four broad categories and the ability to launch other topics, Wiki-style.

The site has also expanded its scope to apply all these social features and search tools to not only the street level but also town and state and country; and it is currently available in the U.S., U.K., Canada and Australia. The expansion of its data structure could be valuable, given the different lengths and densities of certain streets that may cross through different neighborhoods and confuse the hyper-local relevance the site is trying to achieve.

Hyper-Challenging

Overall, these are attractive tools, but this site, like the many others in the hyper-local space, faces a few important challenges:

1. The fragmentation of media – specifically online media, and more specifically, local online media – make it extremely difficult for start-up destination sites to stand out and attract critical masses of traffic and advertisers.

2. Also related to scalability – it has proved very difficult for hyper-local sites to provide the neighborhood level appeal, personalization and local flavor, yet replicate this many times in many disparate communities of varying sizes, demographics and online affinities. Add in the need to rely on users for reviews or other content and it gets even harder. Yelp has mostly done the best job at this.

Like many other online models, the network effect applies here and the more users that participate, the more appealing and valuable the experience will be. Getting the ball rolling is no easy feat, as shown by the many hyper-local destinations trying to make it happen.

__________

Related: See recent blog coverage on some of the ups and downs in the hyper-local world: Pegasus News and Backfence.

Yesterday, The Kelsey Group announced a partnership with conference series host Search Engine Strategies (SES). The two companies will work together to program upcoming conferences, the first being November’s Interactive Local Media Conference.

SES is part of the marketing division of Incisive Media, a fast growing specialist business information provider operating in four principal markets: financial services, risk management, professional services and marketing services. This month alone, it  announced the purchase of ALM, a leading integrated media company and Global Technology Forum.

SES’ specialized and prolific conference focus on search engine marketing and search engine optimization will strengthen the quality of content in these areas that are increasingly relevant to local search, directories and TKG conference programming. TKG’s thought leadership in local media and long-term strategic analysis will meanwhile bolster the quality of local search and directory related content programming and marketing for SES shows. The first of these will be December’s SES Chicago, where TKG will have a definable presence during locally focused sessions.

We’re very excited to be working with the outstanding management at SES. TKG has been working with several members of its team, especially Kevin Ryan and Rebecca Lieb, for several years. The two organizations bring together complementary strengths and reputations and provide the search community with an enhanced and comprehensive perspective on the key trends and metrics that are shaping the local search and media worlds.
________

Related: See the video produced about TKG conferences here.

With the probable exception of Yelp, standalone review sites haven’t figured out a way to make money. In the past year, Insider Pages was sold off to Citysearch, and Judy’s Book, famously, changed its model to coupons.

So why would Josh Walker, Forrester’s former head of consumer research, dive into the game with both feet? Walker’s CityVoter, which raised an initial round of $1.1 million from two Boston-area funders, has been in operation since 2005, and now has 25 employees.

I talked with Walker last week about where he’s going with this. During our conversation, Walker made it clear that he’s not interested in reliving the past.

The “best of” approach, pioneered by city magazines, differentiates the site from the broader Yellow Pages approach of the others (although they also have “best of” lists). Walker believes it will give the site a breadth of reviews, rather than the typical focus on restaurants, bars and entertainment. “Are there enough passionate people to ‘Yelp’ about florists and autos shops?” he asks.

Walker’s TV station-centric model is geared on viral growth from the stations promotional efforts, which will get users to go to their Web sites to “vote” on favorite businesses. Stations are expected to provide between 100 and 300 spots during launch periods.

Secondarily, Walker expects the site to pick up traction from small-business advertisers, which will co-promote themselves and the site by displaying CityVoter signs and handing out free CityVoter-branded business cards.

“Local TV stations need a way to engage local businesses,” he says. “It is the first time we give local TV stations a reason to call the salon.” Walker acknowledges, however, that TV stations may have been cultural misfit with online services in the past, focused on back-slapping auto dealers that accounted for about a third of all sales – or more.

But he believes that the TV station business, recently very depressed, is now interested in pursuing a new climate, with younger, hungrier salespeople. And lower commissions too. All these are necessary components for Web sales. “They’re needing to ramp down from $250k accounts to $50k accounts,” he says.

The key, Walker believes, is that the site will make the small business feel special and enfranchised, rather than just being an advertiser. Along these lines, special features include the various “best of” contests, and collateral such as e-coupons and inclusion in e-newsletters, and integration with YouTube videos.

The site has also put together a package for small-business owners to get them up and going. Partners for the package include VistaPrint for printing, Constant Contact for e-mail and VoiceStar for call tracking.

At this point, the lineup of stations, which get local exclusivity, is getting real. CityVoter now has nine stations, 120,000 registered users and 410,000 votes. It is expecting to launch 25 more stations before the year is out. More important, CityVoter has developed relationships with key station groups – rather than landing deals one station at a time.

Currently, the site has won commitments from Fox to launch 18 stations, Hearst-Argyle to launch 14 stations, McGraw-Hill to launch four stations; CBS to launch two stations, and one station each from Washington Post-Newsweek and Gannett.

InfoSpace’s flagship mobile local search product, FindIt, is now available on the iPhone. I knew this would be coming soon, and it is a natural fit for the ease of use of the new device and its mobile local search possibilities.

Other mobile local search applications have been made available for the iPhone, such as Earthcomber, and many more will follow (including entire companies forming around third-party applications and accessories for the device).

As we’ve said before, the ease of use and Web browsing capability will ignite a wave of innovation in mobile local search. Here, adoption (related to the price of the device and other factors, which should improve) will be a gating factor.

Soon, we’ll do a roundup and a comparative analysis of all the mobile local search applications out there for the iPhone. Stay tuned.

________

Related: Past writing on FindIt! can be found here.

In case you missed any posts last week, here are a few highlights.

It’s About the Money, Remember
Last week, Local.com announced that it will acquire PremierGuide, a white-label local search solution, for US$2 million. I’ve read a handful of reviews about this acquisition and most seem to be missing the most important part of this deal: It’s about the money. Specifically, it looks to me like this deal has a pay-back for Local.com of about one year. I spoke with Heath Clarke, CEO of Local.com, about the deal this week to confirm a few numbers. (read more…)

RHD Buys Business.com
This just in. Directory publisher R.H. Donnelley has acquired Business.com, a B2B-oriented search engine and ad network that was acquired by Earthlink founder Sky Dayton for US$7.5 million in 1999. The acquisition was announced today, just before RHD’s second-quarter earnings report. (read more…)

Paul Levine Has Left the Building
Paul Levine has resigned his position as GM of Yahoo! Local to take the VP of marketing slot at AdBright, a Sequoia Capital backed ad marketplace. Jennifer Dulski will be taking over local responsibilities as group vice president and general manager, Marketplace. The position will also include responsibility for Shopping, Travel, Autos and Real Estate. (read more…)

Fisher’s Goals for ‘PanLocal’ (and Pegasus)
We’re always looking to identify TV station groups that really get it and are going to push hard to compete for local traffic and advertisers online. Is Fisher Communications the one? Last week, Fisher – a publicly traded, Seattle-based owner of 12 full power TV stations, seven low power stations and eight radio stations – purchased Mike Orren’s Pegasus News, which had developed a prototype “pan-local” site in Dallas. (read more…)

LicketyShip: A Local Delivery Option for Recycler.com
LicketyShip will announce a partnership with the Los Angeles Times-owned Recycler.com today to provide a same-day local delivery option for classified customers. This sounds ominously like bubble era companies that went bust, for example, Kozmo.com, which burned through more than $200 million in venture funding. Or who could forget the wonderful Wired articles of Webvan drivers forced to repeatedly deliver packs of gum to eager college students who thought repeat deliveries for low-cost items was the joke du jour? It turns out that the LicketyShip strategy is a little different – an interesting hypothesis with a few surprises. (read more…)

iPhone: Cool, Wishing It Were More Local
I had a great time playing with a friend’s iPhone this weekend. The thing is really nice – even more beautiful in person than in pictures and sturdy beyond expectations. And fun, too. But maybe I won’t buy one for a couple of years. It isn’t so much the 4 or 8 GB of storage (we’ve grown spoiled). Or the AT&T service. Or the Web surfing, which with a Wi-Fi connection is pretty fast (but with a footprint too small to enjoy doing much more than sports scores). (read more…)

When Will Yellow Pages Come to the Social?
Social networking has become and will continue to be one of the hottest trends on the Internet. The goal of social networks is to connect like-minded people based on their interests and often on their needs. In some cases social networks are used to identify the best brands and to root out possible companies to avoid, similar to many consumer comment sites. The beauty of social networks is that they engage participants and provide safe and enjoyable forums to discuss a variety of topics. (read more…)

Superpages Launches Video Beta
Idearc’s Superpages has launched a beta version of a video advertising product, the company announced today. Here is a copy of the announcement. Video has quickly emerged as an essential element for a fully functional local online product, even if uptake among SMEs is small at this stage. (read more…)

Krillion Adds Televisions as New Vertical
Fast moving product information Web site Krillion, recently written about here, today announced that it will add high-definition flat screen televisions to its millions of home appliance product listings. Its total product listings will now exceed half a billion. It will provide product information for the 10 top retailers, covering 80 percent of the television market. This includes 50 television manufacturers, which is incremental to the 35 manufacturers in its core home appliance category. (read more…)

Last week, Local.com announced that it will acquire PremierGuide, a white-label local search solution, for US$2 million. I’ve read a handful of reviews about this acquisition and most seem to be missing the most important part of this deal: It’s about the money.

Specifically, it looks to me like this deal has a pay-back for Local.com of about one year. I spoke with Heath Clarke, CEO of Local.com, about the deal this week to confirm a few numbers. Sure enough, here’s why this deal was such a no-brainer for Local.com. In fairness, Local.com is a public company and Heath would only tell me that my numbers were in range (or close or no comment). Here are the details I put together:

• PremierGuide has about 55 million page views. Based on a few calls, I’ve triangulated CPM to roughly $14. It has the retail Google ad share and a few other smaller ad deals.
• Local.com reports about 10 million unique users. After pulling apart the financial statements (and making a few more calls), the company has a CPM of about $40 (plus or minus). This CPM rate is a combination of a negotiated performance rate from YSM, an Idearc distribution deal and a few others.

Therefore, Local.com should generate top-line revenues off this acquisition of roughly $2.2 million per year vs. an estimated $770,000 that PremierGuide had been generating previously (note: the Local.com release says $800k). There is even more upside here since the Local.com folks will likely go back to the ad networks and demand and receive a deeper ad revenue share for the combined traffic.

Then, of course, Local.com is out actively looking for other distribution, acquisition and partnership opportunities, which should continue to increase the top-line revenues.

On today’s second-quarter earnings call, R.H. Donnelley executives revealed that the ripple effect of the housing slump has affected growth in its Embarq markets, which have been among the most stable in recent years. Fortunately for RHD, improvements in Chicago (AT&T) and the Dex markets has somewhat blunted the impact of a softening Embarq business.

Ad sales overall were up slightly during the second quarter (+0.2%), but the company at this stage cannot be certain the Embarq business will grow in 2007. As CEO Dave Swanson put it, the housing slump “is the biggest issue constraining our results right now.”

According to RHD, the housing slump has had its strongest impact in Las Vegas and Florida in particular. During the Q&A, COO Peter McDonald cited as evidence the fact that the decline in the number of housing permits is much more precipitous in Nevada and Florida than it is in other parts of the country.

On the plus side, RHD says its perennially troubled Chicago market has emerged as a growth driver. The company sites the full rollout of its “triple play” offering (print, IYP and search engine optimization) in Chicago as key to turning that market around. The company held out hope that the triple play would also help boost results in other large markets, particularly in the Dex territories, that are struggling today.

OK. Here is the truth. As an analyst, you become quite the connoisseur of hockey stick graphs. “I do like the way the chartreuse in the bar chart plays off the light and complements your logo.” I heard that in a meeting once, seriously. Anyway, the sad fact is that the vast majority of these exponential growth graphs usually end up charting expenses not revenues or traffic. “Yes, I know. You’ll make it up in volume (because your volume goes to 11).” Not to be flippant, but you become accustomed to hearing outlandish claims, which is part of the fun, really. This is why when you come across something that ends up being true it is all the more worthwhile.

Last month (June), YellowBot.com, a Los Angeles based local directory start-up with four full-time FTEs, told me it had hit the million unique user mark. The claim is that it hit this without any advertising after about four months in operation. It’s worth repeating: One million users, all organic, in four months. Company reps showed me the Google Analytics report. Not to be outdone by this reporting ruse, I called comScore to see if it was tracking similar numbers.

“Zero in March, 325K in April, and 492K in May,” was comScore’s answer. June was the month YellowBot reported hitting the million user mark and those numbers had not come in yet. Internal logs and external third-party reporting never exactly match but these numbers are in what I would consider a reasonable margin of error – on a month-by-month comparison – trending similarly to YellowBot’s internal reports.

So, we’ll see this month but it looks like on the surface that this is real. Even from zero to half-a-million is pretty astounding without advertising. So what is happening here?

According to YellowBot, consumer retention went from 6 percent in April to 13 percent in June. The engineers focused on consumer product development. After building the tools for users to tag, rate, review and upload photographs of local businesses, YellowBot integrated more than 500K crawled reviews and other content in that same time period. YellowBot graphed the time series of ratings for each location and built a clever meter (in beta) that charts ratings over time so you can see whether an establishment is getting better, worse or staying the same – an interesting product feature.

All this begs the question, if a couple of albeit talented engineers can build a local search site, with reportedly low overhead and little capital, and in four months reach the million user threshold, what does that mean for all the rest of the local sites that employ a lot more people and have much higher cost structures? I certainly have my own thoughts, but to quote a YellowBot engineer: “The bar is being raised. Just being a simple local directory site is just not good enough anymore. It’s too easy and too cheap to replicate. Products are going to have to become a lot more robust to defend against new market entrants.”

This is the part of the story where the start-up usually veers into how it is going to put the Yellow Pages out of business. “Are you crazy?” The engineer asked. “Who is going to sell the advertisers?”

This just in. Directory publisher R.H. Donnelley has acquired Business.com, a B2B-oriented search engine and ad network that was acquired by Earthlink founder Sky Dayton for US$7.5 million in 1999. The acquisition was announced today, just before RHD’s second-quarter earnings report. Here is a copy of the release.

Here is an article out this morning that reports the purchase price was around US$350 million, driven up in a competitive auction that featured bids from IAC, New York Times, Dow Jones and News Corp.

This, plus the recent DexKnows.com relaunch, suggests RHD is going all out to accelerate development of its online business.

Here is a copy of the 2Q earnings announcement. The headline is that ad sales were up 0.2 percent in the second quarter. We will have a more detailed recap of the results later.

Update: Much was discussed on the Business.com deal. Executives were asked why RHD acquired Business.com for US$345 million rather than partner with an existing platform (presumably Yellowpages.com). CEO Dave Swanson responded by saying RHD “wanted to control our PBA [performance-based advertising] platform.” And he added that in acquiring Business.com, the company also netted a number of core competencies that it needs to compete in PBA and search, and “thought leadership” in the form of Business.com CEO Jake Winebaum and his team. Winebaum will become head of RHD’s interactive unit.