As the year-end wrap-ups, top 10 lists, and ’08 retrospectives flood in, I noticed this item released last week from Pew (I was out last week). The part that stuck out is that the Internet has overtaken newspapers for the first time this year as a source for Americans to get their news (see chart below).

Also notable (but expected) is how the Internet has shown steep growth among younger viewers as a top source for news. It now rivals television among this segment (ages 18 to 29). This is supportive of analysis we’ve made about these competitive media, and should be taken to heart by anyone in the media and advertising worlds. Local media in particular will continue to mirror these overall trends.

We’re out with our predictions for 2009. But what’s the final word for 2008? Truly, it was a very stimulating and thoughtful year for our local media and commerce industry. But speaking for myself, it’s hard to say whether it was a good year, especially with fresh layoffs that we are hearing about every day. In fact, the year was kind of Dickensian (“best of times, worst of times”).

On one hand, there has been an explosion in local content with YouTube, Twitter and StumbleUpon, and omnipresent local reviews with services such as Yelp and Angie’s List. Online video has become a real medium, aided by $100 video cameras and the emergence of HD standards, and mobile is starting to be a real channel, aided by GPS and iPhones.

On the small-business front, search has gained wider acceptance in key local segments and has become mainstreamed in many ways, adding a useful channel to the ad mix. And the percentage of SMBs with Web sites or personal profile pages has crept up to 61 percent.

But what about the business? For traditional media, it was especially bad. In 2008 we had a perfect storm. Massive debt and declining circulation hit the newspapers hard — and the Yellow Pages in the same way. Sharp hits to retail, auto and real estate advertising sealed the deal. The decline in auto has not only hit traditional media. Online ad networks that aggregate local media, such as Centro, relied on auto for 30 percent of their revenues.

The result: Tribune stands bankrupt, while McClatchy and Lee and others are near bankruptcy. It even appears possible that Idearc and R.H. Donnelley — the two public YP companies in the U.S. — could file for bankruptcy (although we are not betting on that).

At the same time, old-line products such as Valpak coupons have been put up for sale, and we don’t see clear replacements for them yet. Vertical products remain compelling, but with the economic slump haven’t proved to be the hedge for which traditional media have hoped (at this point).

Moreover, third-party auto sites such as Autobytel have been put on the sales block. And vertical stars such as Zillow have begun to lay off workers, even as they form broad sales arrangements.

Local-oriented start-ups also got hit. Credit has tightened up. The only companies that are likely to get funding are those that can get to cash flow positive with as little money as possible. Social-oriented services seem especially poised to get hurt.

So, we have to change the conventional wisdom. The old CW: “If we just tweak things, and gradually switch advertisers over, everything should work itself out.” In fact, with the emergence of new, highly targeted ad products, we could see advertisers spending much more on marketing than in the past.

The new CW? It isn’t so simple.

We’ve learned that hyperlocal doesn’t live in a vacuum, and that there isn’t ready demand for block-by-block coverage. But it is a useful add-on. Content platforms have become a commodity but can be improved with navigation, tagging and geotargeting.

We’ve also learned that mapping is a feature that can be greatly enhanced with personalization and advertising, and could be the basis for a new portal (but there are lots of new fronts for portals). And that mobile content shows real promise, but is still kept “closed” by the carriers, which manage 90 percent of it behind their firewalls (although Google’s Android might begin to open things up).

Classifieds have taken a huge hit by free providers such as Craigslist, which continues to gather steam. But it is encouraging to see classifieds get extended by aggregators such as Google Base, Vast and Oodle, which actually started working with MySpace, Facebook and Wal-Mart (a new local player?) — a truly interesting development.

On the “national-local” front, geotargeting has become so widespread that it actually has put a crimp into CPM rates for local publishers, which have come down from $10 to $6 or $7 in many cases. But we’re seeing organic adoption by regional advertisers such as supermarkets, banks, furniture store chains and lotteries. As Centro CEO Shawn Riegsecker has noted: “They’ve been spending 1 percent to 10 percent of their revenue on the Web, with no strategy.” In 2009 they’ll get one.

For “local-local,” the bottom line remains the engagement of the small business. It is greatly encouraging to see the wide adoption of free online tools by real estate agents, for instance, and ad building templates and planning by companies like AdReady, which has deals with companies such as The New York Times.

It is also encouraging to see the evolution of leads-based services, where ServiceMagic, for instance, has moved the continuum from simply providing leads to delivering jobs (i.e., installation of flat screen TVs bought at Target). Angie’s List’s “two-sided cash register” from premium subscriptions and advertising also represents a new model.

In the end, we are in an environment where we are absolutely climbing over bodies to get ahead. But the opportunities seem stronger than ever, as is the relevancy of the products to consumers. It is an important and meaningful thing for all of us to work on, isn’t it? Happy new year to all our friends, and thanks for your support. We’ll see you in 2009.

Mobile application development has reached the collegiate level, with MIT coursework now devoted to building applications on mobile platforms. A new class titled “Building Mobile Applications” has begun to do just this. I missed this item from being out for a little while, but it still has legs in my view — especially with respect to local search applications in the evolving mobile environment.

Specifically, it’s emblematic of a few important trends:

1. The degree to which the barriers have lowered for mobile application development (to the point of being college coursework). In fact, MIT professor Hal Abelson kicked off the first class by saying “A course like this couldn’t have existed 10 years ago … maybe not even a year ago. Courses like this right now are unique, but in two years they’ll be completely ordinary.”

2. The importance and prevalence that local search applications will have in this (more) open development environment. Most of the applications developed so far in MIT’s course involve local search and they all tap into the location targeting capabilities of these mobile platforms.

CrunchGear profiles a number of these applications. Check out Ballyhoo and MobileTrader in particular.

As expected, iPhones can now be purchased at 2,500 Wal-Mart locations throughout the U.S. This won’t come with Wal-Mart’s signature markdown, as speculated. The 8 gigabyte model will sell for $197 — only $2 less than those sold at Apple and AT&T stores.

But this will be more about accessibility and sales reach than price. It should accelerate the iPhone’s march to mainstream penetration. Wal-Mart meanwhile hopes to benefit from drawing more (and different) customers into its stores. See a video report at ABCnews.com.

From a relatively slow holiday period, here is a roundup of recent posts, in case you missed any.

Where.com: GPS Is Trigger for Local-Mobile Social Portal

Local mobile portals make a lot of sense since most phones (even the iPhone 3G) don’t really lend themselves to much surfing. Another social/viral dimension is added through social networking enhancements via profile pages, Twitter and especially GPS. (read more…)

Egypt YP Goes Mobile

The Egypt Yellow Pages, operated by Dubai-based Al Wahda Express LLC, has launched an online/mobile mapping service. According to the announcement, users will be able to view local businesses on their mobile phones in either satellite or map view. (read more…)

GateHouse Sues Boston.com’s HyperLocal Site Over News Links

Hyperlocal sites aspire to grab headlines from everywhere and be a one-stop for the neighborhood. That’s been accepted practice, providing the site links back to the origination site, and too much copy isn’t exposed. It tends to build traffic for everyone. (read more…)

RHD in Beta With New IYP Platform

R.H. Donnelley has recently opened up the beta version of its new DexKnows IYP platform (the new search box is above right), known internally as DK2, which TKG previewed last week with Brian Barnum, president of RHDi, and Jeff Porter, VP & GM and the one charged with product development for DexKnows.com. (read more…)

New Classified Aggregators: iList and Bamboo Ad Net

The local media industry is so fragmented that it seems increasingly essential to aggregate local classifieds from a number of sources. Google Base and Oodle go a long way in this regard — the latter having recently signed Facebook and MySpace as partners for its growing network. But other classified aggregators are coming up the horizon, too. (read more…)

Move.com Alumni Launch Web 2.0 Coupons Site

Online coupons are getting more attention, and even adding mobile channels. But no single company has really broken through at the local level. They’re largely for national franchises. Longtime Move.com execs Adam Leff and David Bay clearly recognize the challenge, and the major opportunity in the local merchant space. Since February, they formed a company named Reach Pros and have been building BogoPod, a new online site. (read more…)

Yell.com Partners With U.K. Home Vertical

The U.K. online Yellow Pages directory Yell.com has announced a partnership with IdealHomeShow.co.uk, giving the home improvement and garden trade show Web site access to Yell.com’s local business listings in related headings. This agreement is a first for Yell.com, according to the company, and it appears to signal a new strategic direction toward syndicated Yell content into relevant partner sites in key vertical categories. (read more…)

Newspapers Going to Three Days a Week Delivery?

Increasingly, we’re seeing pressure on newspaper publishers to forgo seven-day delivery. The idea is they’d refocus on the development of profitable niche sites and the Thursday, Friday and Sunday editions packed with retail advertising. Under this concept, the other days in the week would have online access to daily replica e-editions and/or smaller print editions for newsstands, with no home delivery. (read more…)

Jivox Picks Up New Channel Partner

Local online video ad provider Jivox strengthened its ability to reach small-business video advertisers today by partnering with Examiner.com. The online news network will offer Jivox’s self-serve online video creation tool to its advertisers on a white-label basis. Jivox has been one of the online video success stories in building out a network of 600 local TV, radio station and newspaper sites that collectively reach 60 million monthly uniques. (read more…)

On-Device Application Stores: Palm Follows Suit

Palm has announced a new on-deck marketplace for mobile applications. This involves a partnership with app distributor PocketGear that lets it hit the ground running with 5,000 applications (about 1,000 are free). It has also received new submissions from about 1,500 application developers. Named Software Store, it will join Apple’s App Store, Google Android’s “Market” and the soon-to-be-launched BlackBerry Application Center. (read more…)

Omniture Brings Analytics to iPhone

Omniture has announced a new version of its SiteCatalyst analytics engine that’s designed specifically for iPhone apps. As iPhone penetration grows, data consumption will grow with it. The conversation will begin to shift from how many users have downloaded which applications to how they are using those applications. Depending on the application, there will be the opportunity to get more granular with clickthrough rates (display ads), click-to-call (local search), session lengths (mobile social apps), conversions (shopping search) and lots of other important data. (read more…)

Local mobile portals make a lot of sense since most phones (even the iPhone 3G) don’t really lend themselves to much surfing. Another social/viral dimension is added through social networking enhancements via profile pages, Twitter and especially GPS.

Two services seem to be leading the way for locally based mobile social networking right now: Silicon Valley-based Loopt, which is backed by Sequoia Ventures, and Boston-based Where.com.

Where.com VP Michael Sullivan, an EnPocket vet, gave me the rundown on his service, which has about a million users activated. It is the first consumer facing product for parent company uLocate Communications, which started as a fleet tracking business five years ago and has a number of location-based services (LBS).

The immediate opportunity for Where is for friends to see who is near them and, if they want to go out, what is near them — an application it has branded as “buddy beacon.”  From a vertical advertising perspective, it’s highly appealing to brick-and-mortar type businesses, such as movie theaters, auto dealers and retail.

Longer term, Sullivan sees the service providing location-based “find it and buy it” services for Yellow Pages companies. “You can order a pizza with short code without putting in an area,” he says. They will automatically know where you are based on network location (opted in). A current deal with Sprint already offers up that capability. Directory assistance is also greatly enhanced, he says.

The bigger value proposition is with a service similar to 1-800-GOOG-411, which currently works on a ZIP code basis and narrows down searches to a radius of a few miles. But “when you are on the street, you want something sent to you that is a couple of hundred feet away,” says Sullivan.

Specifically referring to Google’s role in the space, Sullivan sees a “co-opetition” kind of relationship developing. “They aren’t focused on the social local that we’re doing. We’re seeing the richest engagement with users.”

Where is currently aggregating a great deal of premium content as a key part of its engagement strategy. Partners include such providers as golf.com, eventful.com, state parks, movie theaters, weather, winery finder, brewery finder, Starbucks, cheap gas and ZipCar.

The Egypt Yellow Pages, operated by Dubai-based Al Wahda Express LLC, has launched an online/mobile mapping service. According to the announcement, users will be able to view local businesses on their mobile phones in either satellite or map view.

We believe mobile search will be a critical usage channel overall in the coming years, but even more so in developing markets, where print remains a small niche, Internet penetration is low, and mobile phones far outnumber landlines. Egypt is a nation of 82 million people, with 31 million mobile phones, 11.2 million landlines and just 8.6 million Internet users. In markets with characteristics like these, we expect to see a lot of energy and investment in mobile directory services.

Hyperlocal sites aspire to grab headlines from everywhere and be a one-stop for the neighborhood. That’s been accepted practice, providing the site links back to the origination site, and too much copy isn’t exposed. It tends to build traffic for everyone.

But GateHouse Media, which owns 125 newspapers across Massachusetts, doesn’t feel especially grateful about the linking that has been done by Boston.com’s prototype hyperlocal YourTown site for Newton, Massachusetts. In fact, GateHouse has filed a lawsuit in the U.S. District Court in Massachusetts.

The suit contends that Boston.com’s deep linking directly to the article bypasses WickedLocal’s home page, and implies an endorsement by listing the title of the local papers next to articles. GateHouse specifically complains of “unfair competition, false advertising, trademark dilution, unfair business practices and other misconduct.”

The suit hasn’t intimidated Boston.com from continuing its practice. Today’s Web site features several links. And no one is contending that linking is unprecedented. In fact, a write-up of the lawsuit in The Boston Globe points out that GateHouse frequently links to The Globe’s articles, too. But the lawsuit might bear paying attention to, with possible implications not only for the turf war in Boston, but also for place blogging in general.

Boston.com’s hyperlocal sites in themselves feature local news and information, a local calendar, a local Wiki and real estate listings, focused on a particular community. While the lawsuit focuses on the Newton site, additional sites have since been launched in Needham and Waltham. Boston.com VP Bob Kempf, who has spearheaded the hyperlocal effort, previously served as a GateHouse executive and actually originated the WickedLocal site.

R.H. Donnelley has recently opened up the beta version of its new DexKnows IYP platform (the new search box is above right), known internally as DK2, which TKG previewed last week with Brian Barnum, president of RHDi, and Jeff Porter, VP & GM and the one charged with product development for DexKnows.com. This project has been under way for well over a year, and RHD is relying on the new platform, as well as a new SEM platform called Dex Net, to propel RHD from its current second-tier digital position among directory publishers.

Barnum, who came to RHD through the Business.com acquisition, stressed that the platform is a transformational change, not an incremental one. “Everything but the listings is brand new,” he told us. Much of the development muscle behind the new IYP came out of the Business.com team in Santa Monica, including former Rent.com VP of Product Management Mark Eastwood, who was in charge of crafting the new user interface.

While the beta still has a few quirks, it is clear the new DexKnows is much more robust than the previous version, though a user will need to invest a little time in the site to fully appreciate the difference. The Kelsey Report will provide a more detailed review in an Advisory after the first of the year, but for now here are a few images and highlights of the new site.

One key difference with the beta of DK2 is that it makes a distinction between service area-based businesses like plumbers and fixed location-based businesses like restaurants. So if a user searches for a plumber serving the 60048 ZIP code, the result will show the business’ defined service area rather than its physical address. If executed well, it could represent a significant edge over the aggressive map-based approach many take to local search, where plumbers are plotted on maps based on their physical location, which is irrelevant.

In the early stages, Dex is using the existing print directory coverage area as a default “service area,” but advertisers will have the ability to draw their own service boundaries to overrride the default setting. Dex explained that the print boundaries were the best available default, but the hope is over time to have more precise advertiser defined boundaries.

These images show the new Dex (top) displaying a result for a plumber in the Chicago suburbs with a designated service area (though it seems to cover most of Chicagoland), and the image below from the current site shows a map with the notation “not enough information to locate the business on the map.” The service areas still need refinement, but the idea of making a distinction between outbound and inbound businesses is an important step.

Another new feature we liked was the ability to search by landmarks. We typed in “restaurants, Wrigley Field” and got a nice result. When I typed in “restaurants near Wrigley Field,” however, the results were a little kludgey. Some refinement needed is here, but again it’s a nice feature. When I tried this on the current site, it produced a result, but with several listings many miles from the friendly confines. On Google, this query produced a somewhat better result, but at least the new Dex is offering a similar experience and it can further refine this feature.

We encourage you to try the beta and post your comments on your experience with it.

The local media industry is so fragmented that it seems increasingly essential to aggregate local classifieds from a number of sources. Google Base and Oodle go a long way in this regard — the latter having recently signed Facebook and MySpace as partners for its growing network. But other classified aggregators are coming up the horizon, too.

One site that recently launched is iList, a San Francisco-based company that has received $1.5 million from Draper Fisher Jurvetson. It offers users the ability make their ads portable to all their friends who are tuned into them on all the social sites (among them, Facebook, MySpace, Twitter, Friend Feed, Gmail, Yahoo! Mail and Windows Live). Users can set up alerts and RSS feeds.

The authenticity of users is especially pushed — something that is coming up more and more. Users won’t see the site’s authenticity star until they verify their identity via cellphone SMS. That’s an option that has previously been available on Facebook and eBay (but may freeze out some people who aren’t very familiar with text messaging).

Another site that aggregates listings is Bamboo Ad Network, which is powered by Travidia, a large newspaper tech vendor. Bamboo works with auto dealers to put their listings across a wide network, including Google Base, Craigslist, Vast, Oodle, Local.com, Info.com and some others. It also provides dealers with sophisticated reporting (and promotes the dealership itself with SEO-friendly microsites) that includes lead collection.

“Our internet advertising programs were designed to give dealers the best leads with virtually no effort on their part – just pick the leads you want from your inbox! You get to choose,” notes collateral on the side. “Don’t worry about placing your ads in the right places and keeping track of the results. Bamboo will do it for you.”