There has been lots of talk about local merchant video ads this year, a trend pushed forward in the most meaningful way by Citysearch’s May integration of video ads. We’ve also seen every major U.S. IYP do the same this year, in various ways.

As we’ve mentioned many times, this brings video advertising within the grasp of many SMBs, as it’s always been of interest, but cost prohibitive on cable. Economics aside, part of the ecosystem that is developing around online video also involves a rising quality standard pushed by online video vendors such as TurnHere and EZ Show.

But no one can forget the cheesy do-it-yourself local video ads we’ve traditionally seen on late night cable, usually involving a proprietor and a shaky camcorder. These aren’t going away, but lower cost, higher quality videos from the new wave of online video vendors will soon make them something of a throwback.

A small outfit called Bloodshot Records parodies this classic form of advertising in a short video clip (at least it appears they’re not being serious). Check it out here.

Posting (along with the activity level in the local search world) has been understandably light over the past few days. But a lot happened before that; here is a recap in case you missed anything. Click below to read each post in full.

A Holiday Wish
One of the many reasons the Internet has bloomed in the U.S. is that the administration, under the leadership of Ira Magaziner, former head of U.S. Internet policy, allowed the World Wide Web to grow without putting unnecessary restrictions on it. Yesterday, the FTC issued a very unsurprising decision allowing Google’s proposed merger with DoubleClick. (read more…)

More on Local.com/Citysearch Deal
As promised, today I had the chance to talk with Local.com’s VP of bus dev and sales, Peter Hutto, who took time away from his vacation to provide some more color on yesterday’s partnership with Citysearch. Hutto confirmed that the deal will involve boosting the content and site experience of Local.com while also bringing in incremental ad revenues from Citysearch advertisers. This will happen through a revenue share arrangement for traffic that flows through Local.com. (read more…)

Consolidation in Discount Online Travel Space
In news that was supposed to be announced today but broke late last night, discount travel site Kayak has raised $196 million and acquired competitor SideStep. Techcrunch reports that deal is worth $200 million. The funding came from existing investors Sequoia Capital, General Catalyst Partners and Accel Partners, as well as new investors Oak Investment Partners and Lehman Brothers. The combined company will have about 60 employees and will be profitable on combined revenues. (read more…)

European Directories Expands Poland Presence With Ditel Deal
European Directories has taken another step in expanding its directory publishing footprint on the continent. Earlier this week, ED acquired the Polish directory publisher Ditel from Telekomunikacja Polska. The deal is worth 20 million euros, or about US$29 million. ED is already present in the Polish directory market through its 50-50 joint venture with Interinfo Holdings to operate PKT, or Polska Ksiazki Telefoniczne. (read more…)

AnchorFree Seeks to Provide Wi-Fi at Local Stores and Services
AnchorFree, an ad-supported Wi-Fi service, says it is seeking to add additional verticals to its hotel and coffee shop strongholds. The company, which has raised $6 million and already has 10,000 locations and 5.4 million user sessions a month, wants to serve locations “wherever people wait,” says Executive Vice President Mark Smith. “Auto dealerships, restaurants, doctors waiting rooms … ” (read more…)

Putting Some Numbers on Online Video
WebVideoReport has started to put some numbers on the growing online video space. It joins GigaOm’s NewTeeVee in exclusively covering this space, and has put out some interesting articles in the past few weeks. These look at the CPM rates for a sampling of mainstream online video channels. This includes mostly pre-roll video ads but also looks at video ad overlays, which are beginning to displace a certain degree of pre-roll advertising, thanks to the efforts of companies we’ve profiled here in the past, including ScanScout and Adap.tv. (read more…)

Call Genie’s Durance: ‘Voice and Data Truly Intermingled’
CallGenie has bet heavily on building a voice search platform for telecom carriers, Yellow Pages publishers and other providers of ad-supported directory assistance. Now the 150-person company, partially owned by YPG and just listed on the Toronto Stock Exchange, has enhanced its mission with a series of acquisitions. These include BTS Logic, an international directory assistance company, and Phone Spots, which delivers advanced mobile data services tied to Yellow Pages and DA searches — including advertising. (read more…)

Yahoo! Maps Get More Interactive
Yahoo! announced a series of features for Yahoo! Maps today, the most notable of which is “drag & drop” functionality for routes. The feature, which Google already launched in a similar form, lets users drag a route to any number of roads or freeways that exist between two points. (read more…)

Clear Channel Teams With Denver Multimedia for Online Video
Radio has virtually been a non-starter for local online sales, but a new video initiative by Clear Channel Radio, the nation’s largest chain with stations in 80 U.S. markets, might ramp things up. The video initiative, using Denver Multimedia (DMM) as its video producer, provides radio advertisers with the option to produce 30- or 60-second videos. (read more…)

Shopping With Yellow Pages
‘Tis the season for shopping and at times endless aggravation finding stores that actually have the items you want in stock. I’m all about anything that can help ease the stress of the shopping experience. And one thing I rediscovered as an essential shopping tool is the Yellow Pages (thanks to, of all things, a MySpace blog). The thing that continues to make the Yellow Pages relevant and valuable in the lives of myself and others is that it helps at the end of the buying process. (read more…)

One of the many reasons the Internet has bloomed in the U.S. is that the administration, under the leadership of Ira Magaziner, former head of U.S. Internet policy, allowed the World Wide Web to grow without putting unnecessary restrictions on it. At a Kelsey Group conference on Interactive Newspapers in 1996, Esther Dyson, then the chairwoman of the Electronic Frontier Foundation, spoke to our audience about the EFF defending consumer rights in the digital world. Some countries, concerned about what people might say or do on the Net, did put rules and regulations in place and they inhibited its growth.

Yesterday, the FTC issued a very unsurprising decision allowing Google’s proposed merger with DoubleClick. More importantly, the FTC also stepped into the issue of privacy by taking a tentative step regarding behavioral advertising (the tracking of what a user does online — from searches, to Web pages visited, to content viewed). I believe that the companion announcement is more important than the Google/DoubleClick decision. The FTC recognized that behavioral advertising does provide real “benefits to consumers in the form of free content and personalized advertising.”

Behavioral advertising, in theory, is good for consumers and good for advertisers, especially as more advertising moves online. The jury is still out on consumer acceptance of even the most customized advertising on our mobile phones. However, as the use of video increases on the Internet, personalized advertising becomes very attractive, especially if it offers a coupon or other mechanism to lower prices. The trade-off is that some computer in a cloud somewhere knows all about me because of what I do on the Internet.

In my view, I should be able to direct advertising in a way that is acceptable to me. This is a difficult challenge, but my wish is that in 2008 we make substantial progress in addressing privacy principles. The FTC’s voluntary privacy guidelines would require consumers to have the ability to choose whether they want their information collected. Consumers could also request reasonable security for that data and require express consent before the information can be used in a way that is different from what a company promises when it collects data.

People are understandably concerned about pornography, spam and how it interacts with the First Amendment. I believe privacy, or the lack of it, is the one issue that could derail future Internet growth. So the second part of my wish is that companies abide by the voluntary privacy guidelines proposed by the FTC. Every organization involved in local media should endorse this concept.

As promised, today I had the chance to talk with Local.com’s VP of bus dev and sales, Peter Hutto, who took time away from his vacation to provide some more color on yesterday’s partnership with Citysearch.

Hutto confirmed that the deal will involve boosting the content and site experience of Local.com while also bringing in incremental ad revenues from Citysearch advertisers. This will happen through a revenue share arrangement for traffic that flows through Local.com.

He also expanded on a few other points alluded to in yesterday’s post, such as having this deal be a foundation for more content formats to enter the Local.com fold, including video.

“Our strategy is to be content aggregator first,” says Hutto. “There are lots of different forms of content out there, and you’ll see us make a broad range of deals to bring in content, such as deals we’ve formed with Superpages and Citysearch. Part of this will be to aggregate video from other folks.”

This is very much in line with the principles of universal search, in which users are coming to expect varied content formats in when they search for things online. In local search this trend is definitely present, and has been seen most through interest in local merchant videos.

For Local.com, the deal itself and its possibilities (including video) are essentially a function of this content aggregation strategy to bring in lots of different content from different sources.

“In this deal, Citysearch really saw us as Switzerland when it comes to distributing their content,” says Hutto. “In the future, you won’t see Superpages distributing to [video] to Citysearch and you won’t see Citysearch distributing it to Superpages. But you could see both distributing to us. And anyone else who’s got it, we’ll take it.”

From the Stupid Fun on a Pre-holiday Friday department, here is a year-end-recap spoof from the folks at online video production studio JibJab.

It takes some questionable jabs (SoCal fires), but also has lots of funny highlights from 2007 in politics, celebrity news, sports and tech (the iPhone and Facebook of course get shout-outs).

The animated video also spoofs the same Billy Joel tune used in The Richter Scales’ bubble 2.0 video that has gotten lots of circulation. The latter was more clever if you ask me (the “babies blogging in the womb” line is priceless), and if you haven’t seen it, check it out at Valleywag. Happy holidays.

In news that was supposed to be announced today but broke late last night, discount travel site Kayak has raised $196 million and acquired competitor SideStep. Techcrunch reports that deal is worth $200 million.

The funding came from existing investors Sequoia Capital, General Catalyst Partners and Accel Partners, as well as new investors Oak Investment Partners and Lehman Brothers. The combined company will have about 60 employees and will be profitable on combined revenues.

Both companies represented the market share leaders in the discount online travel space, having revenues of $50 million (Kayak) and $35 million (Sidestep). In terms of unique users, the combined company will have a commanding lead over competitors Farecast and Mobissmo (see chart below from TechCrunch).

Benefits of combining the two models can also be seen from the fact that the companies claim less than a 10 percent overlap in their audiences, and from SideStep’s strength in display advertising, which Kayak currently lacks.

SideStep CEO and former Yahoo! SVP Rob Solomon is responsible for much of the company’s growth, and has turned it around in lots of ways since he took over two years ago. This culminates in today’s deal.

Thanks for all the holiday cards, and good wishes. It is kind of inspiring that many companies are donating to some wonderful charities. It is great to work with such thoughtful people.

Here are some favorite e-cards. Zillow and AdMission probably win “best card.” You can play AdMission’s melting snowman game with the family …

But the artwork from JD Power and The Yellow Pages Association is also wonderful. The card from Internet Broadcasting rocks out, too.

Local.com announced today that it will pull in and display content from Citysearch in its local listings. This will enhance Local.com’s own content and bring in more ad revenues from Citysearch advertisers.

Citysearch will meanwhile get more distribution for its content and advertisers, which, in the long run, could increase its own traffic as well as its value proposition to advertisers. The latter is obviously of interest to the city guide, and is something it continues to augment with local sales investments.

For Local.com the deal could boost traffic in addition to ad revenues, with better content from Citysearch including more than a million reviews, coupons, photos and other things from its growing base of content and multimedia.

It seems possible, in other words, that the partnership could grow to include many of the things Citysearch has integrated over the past year including menus from MenuPages, and other forms of transaction-based advertising (think appointment scheduling) the company has expressed interest in pursuing.

And as everyone in local search is thinking and talking about video, content from Citysearch most notably could represent a step toward video for Local.com, given Citysearch’s strong moves in the area.

Citysearch’s video pricing (as alluded to earlier this week) in fact allows it to own the content (as opposed to advertiser ownership), which could have been cleverly formulated with these types of distribution deals in mind.

It’s also interesting to note that Local.com’s VP of bus dev, Peter Hutto, was previously at IAC, and the two companies have worked together in the past. We’ll be reaching out to Hutto and Citysearch’s Rob Angel — both friends of TKG — to get more color on the deal and its opportunities for each company.

European Directories has taken another step in expanding its directory publishing footprint on the continent.

Earlier this week, ED acquired the Polish directory publisher Ditel from Telekomunikacja Polska. The deal is worth 20 million euros, or about US$29 million.

ED is already present in the Polish directory market through its 50-50 joint venture with Interinfo Holdings to operate PKT, or Polska Ksiazki Telefoniczne (there is a good reason for using acronyms when discussing the Polish directory business). The Kelsey Group estimates Ditel and PKT have a combined 48 percent share of the market, which Eniro Polska leads with a 51 percent share. TKG values the Polish market at US$132 million in 2006, based on today’s zloty-dollar exchange rate.

This agreement comes close on the heels of ED’s announced acquisition of Gouden Gids from Truvo, a deal that awaits regulatory approval in the Netherlands. If approved, that combination with consolidate the Dutch directory business into a single dominant player.

ED is a London-based holding company with directory operations in Austria, the Czech Republic, Denmark, Finland, Gibraltar, the Netherlands, Poland, Slovakia and Sweden. The company is led by CEO Cornel Riklin and is owned by an investor group led by Macquarie Capital Alliance Group.

This deal, following the Netherlands consolidation, suggests ED wants to consolidate its positions in Europe where it can. Assuming the Gouden Gids deal is completed, the most competitive marketing remaining in ED’s portfolio is Finland, where its Fonecta operation competes hand to hand with Eniro’s Finnish unit.

TKG believes we may see more M&A activity in Europe. One big question invariably raised by the Gouden Gids deal is whether this clears a path for a mega-merger between ED and Truvo. With the consolidation of the Netherlands, those two companies would have entirely complementary portfolios.

AnchorFree, an ad-supported Wi-Fi service, says it is seeking to add additional verticals to its hotel and coffee shop strongholds. The company, which has raised $6 million and already has 10,000 locations and 5.4 million user sessions a month, wants to serve locations “wherever people wait,” says Executive Vice President Mark Smith. “Auto dealerships, restaurants, doctors waiting rooms … ”

Smith notes that the company also serves 15 airports via its partners, and 26 marinas and yacht clubs. In addition, it is looking to enhance its retail presence, and is installing a “few new outdoor shopping malls in the Bay Area.” This segment is also targeted for localized cellphone advertising — perhaps an adjacent business — by NearbyNow.

The key to the company’s business model is to install routers in heavily trafficked locations where owners are responsible for arranging their own data connections. The routers cost $37 and installation is roughly $100. Smith says it generally takes just a few months of advertising to earn back the sunk costs.

This assumes, however, that locations have at least 10,000 page views. The average coffee shop gets about 7,500 page views, so break-even takes longer. Meanwhile, the average hotel gets more than 100,000 — with some getting many multiples above that.

While AnchorFree has aggressively launched, it is in a competitive space. It also can’t require location owners to provide the service for free; it can only recommend it. But the service is differentiated by the appeal of its advertising, says Smith. Other companies only provide advertising on the landing page. AnchorFree has ad spaces built into every page, and can even deliver a multipage ad series.

The ads on the network, however, are not especially local. There is a heavy dependence on national ad networks, remnant ads, etc. Looking forward, Smith says he definitely wants to see more local targeting. The company is currently in discussions with local media companies to act as resellers. Since locations are precisely targetable, a flower seller in Rockefeller Center, for instance, could theoretically buy an ad for the three-block radius.