Hyperlocal sites are well intentioned, and most have some kind of business plan. But they haven’t really focused much on making money. That’s where GrowthSpur, a new company, comes in.

Launched by former Washington Post executive and BackFence founder Mark Potts, GrowthSpur is a “soup to nuts” provider of training and services, targeting an estimated  2,000 hyperlocal “independent” sites (i.e., independent of mainstream media). “We’re trying to support a new ecosystem of sites,” says Potts.

Two hyperlocal sites are currently signed up: Chi-Town Daily News and SunValleyOnline. There are also plans to create affinity advertising networks around specialized verticals, such as sports, news and lifestyles.

In this regard, it looks similar to the Voice Local Network established by Village Voice Media. But Potts says his targeted hyperlocal sites are typically “more suburban.”

Regarding the business model, the company won’t charge a fee for working with smaller companies, but will take a cut of revenues instead. Many of these companies are capable of bringing in six figures, says Potts. Larger companies may already be using certain vendors and other services, and they’ll sign on with different arrangements.

GrowthSpur will first focus on display. Then it will bring in third-party directory and classified solutions. E-commerce should also be part of the picture.

Longer term, search may be added as well. But Potts says the real effort is to allow hyperlocal sites to leverage their relationships with local businesses, such as the service station owner and the pizza place.

Potts has signed up four local media veterans to jump-start the effort, including sales trainer Mel Taylor; Dave Chase, a former Microsoft Sidewalk exec who operates SunValleyOnline; Tom Davidson, a former exec at Tribune Interactive; and Jennifer McFadden, formerly of New York Times Digital.

The company, which is currently raising funds, also has populated an advisory board that includes Jeff Jarvis, credited as helping create the company’s concept; Chi-Town Daily News founder Geoff Dougherty; NewWest founder Jonathan Weber; futurist Michael Rogers, a former Washington Post and NY Times exec; HealthCentral’s Chris Schroeder, who was formerly head of Washingtonpost.Newsweek Interactive; DigitalSports‘ Liddy Manson, who is also a former Post exec; and Motionbox’s Josh Grotstein, who had been a backer of BackFence when he was a partner at SAS Investors.

Today I had the chance to talk to Todd Mozer, CEO of speech recognition technology developer Sensory Inc. In the past 15 years, about 60 million products have shipped with its chips and software embedded. These include everything from in-car voice command systems to Bluetooth headsets to voice controlled toys.

The company’s next big area of growth, according to Mozer, lies in speech controlled Internet devices (SCIDs). This essentially means the many consumer electronics products that surround us, and some yet to be marketed, which are Internet connected and speech enabled.

This is expected to be a big growth area if you look at the increasing saturation of wireless broadband (4G rollouts, etc.) that is tied to competition among wireless carriers. A product of this (and Wi-Fi saturation) will be more connected devices. Intel in fact predicts there will be 15 billion connected devices by 2015.

Raise Your Voice

This includes everything from coffee makers to shoehorns (kidding, only sort of). The reason this is interesting to Sensory is that many of these devices don’t fit our typical view of what makes an Internet connected device (read: keyboard and screen). Voice then becomes a logical input mechanism.

One example Mozer showed me was a clock that is completely speech enabled, including setting and telling the time, current weather and other localized variables. In this case, the voice recognition chip exists at the client level to perform a certain set of functions — nothing new.

But when networked to a server side speech processing engine, a much broader set of possibilities emerge. The same clock now becomes able to tell you the weather in Paris or the closest theater where “The Hangover” is playing. The connectivity also opens the possibility for ad support. This relies on more audio content (ads) but Google is moving in that direction, as we’ve argued, with Google Voice and other efforts.

Sensory has done work with Goog411 and currently works with Microsoft on Bing 411. This involves connecting client side voice commands (from an in-car Bluetooth, for example) to a free DA call. These DA providers love it obviously, because it sends them traffic. Bing 411 is more interesting, says Mozer, because it has branched out beyond just local listings to include a broader index of weather, stocks and such.

Looking Forward

Other possibilities, Mozer says, include tying it to VoIP capability to call people or places from these different devices. This can include ordering a product or making a reservation. This starts to get interesting if you tie it to call tracking services that monetize local phone leads. Skype has also done some interesting work in this area, which we uncovered a few months ago.

Bottom line: If Mozer — and Intel — is right about the explosion of SCIDs, you can imagine a day when the average home is filled with not only Wi-Fi connectivity but also speech recognition. The kitchen, living room, den, car and other places become search engines. True, that’s already the promise of the mobile phone, but this broadens it and gets us closer to being truly “wireless.”

In terms of Sensory as a company, it’s been profitable for four of the past six years, with the down years having to do with the economy plus strategic investments in Bluetooth integrations. Stay tuned for more announcements in the next 60 days that I can’t talk about yet, which will get the company closer to bringing us the wide world of SCIDs.

A year since IAC’s spin-off of several businesses, IAC Chairman Barry Diller, during a 2Q earnings call, saw some bright spots, including ServiceMagic, which saw a 5 percent jump in service requests. Diller also expressed optimism that the company had strong opportunities in several key areas, especially vertical search, and extensive downloads of its iPhone apps, which add up to 5.5 million (although these were mostly from its Urbanspoon acquisition).

All this despite a sour business climate that has eaten into Citysearch’s display ad revenues and turned IAC’s “emerging” business unit into a “retreating” business unit (to steal a line from Niki Scevak).

Diller noted that Ask.com is going to unveil coupons and deals sometime next month.  While there were no suggestions that Ask can directly take on Google and Yahoo/Microsoft in the search leadership, Diller said “we’ll continue to roll out areas that we think we can offer consumers a much richer search experience than our competitors. We’ll continue to evolve and grow … and compete against Google in different areas, vertical areas.”

IAC’s rich content provides a much better experience, argued Diller. For instance, it over-indexes for questions and incorporates extensive user-generated content.

Praized Media continues its march toward blending Twitter and local. The latest product is a browser plugin called TwitArea that lets users tweet about places.

Specifically, the plugin plants an “insert place” button under the Twitter.com text box. When clicked, this launches a mini local search tool. After searching and browsing local listings, clicking a “tweet this” button automatically forms a tweet that notifies followers about a certain establishment.

“Think of it as Twitpic for places,” says Praized Cofounder and VP Sebastien Provencher. Twitpic, for those unfamiliar, is a tool that lets users upload a picture (mobile or PC) for which a short URL and tweet are automatically generated.

There has been endless commentary over Twitter over the past year — so much that it’s been dismissed by many as a joke. Much of that viewpoint has some merit, as Twitter has been shoved into lots of unnatural mashups. But there are some places where Twitter makes sense. Local search is one of them. (see my Search Engine Watch column from a few months ago.)

For now, TwitArea seems to be a useful tool, and one that could gain some traction as Twitter gets more and more recognition as a local search tool. Twitter is meanwhile trying to simplify its “value proposition” to the general public by positioning itself as something that they understand: a search engine. Its home page redesign this week is evidence of that, as is the more “front & center” trending topics feature.

This is where the real value will lie with Twitter: as a search engine. Google is great at telling you what happened years or hours ago, but Twitter tells you what is happening now. There are lots of well-known recent examples of how this applies to breaking news. I maintain that real-time chatter about local businesses also has value (Twitter search “burrito, San Francisco” and see what comes up).

Twitter’s massive scale also gives it a leg up: having enough content to fill out all the little niches of categories and locales is a major challenge in local search. The question is how businesses can effectively use this as a marketing tool and how Twitter can monetize it. There’s lots of experimentation happening in the marketplace, and third-party business models being concocted as we speak.

TwitArea and Praized are leading the way in the area of Twitter/ local mashups so far. Like a lot of other things, a barrier to mainstream adoption for TwitArea could be the plugin installation process (Firefox 3.0.11 or later). But it looks to be a useful tool once installed. More to come after a thorough test drive.

The Huffington Post has hired a staffer for a Denver site. The site, in the nation’s 20th largest market, will be HuffPo’s third local site when it launches in September. New York and Chicago are already up.

Los Angeles is slated to be No. 4, with more than a dozen sites planned in all. The sites are being linked with other local media, such as ESPNLocal, and typically will have one or two editors per market.

The Denver editor is Ethan Axelrod, the son of David Axelrod (a top Obama administration official). “I’ve been interested in journalism for a while,” the 22-year-old graduate of Colorado College told Howard Kurtz of The Washington Post. “I heard through my father that they were expanding, so I applied for it.”

Axelrod won the job after submitting a mockup of the Denver home page and interviewing with Arianna Huffington.

According to the Internet Broadcast Local Index for May 2009, local TV station Web sites beat all other local media sites in total local minutes in 28 of the top 50 markets. BIA/Kelsey analysis of the April 2009 IB Local Index focused on how local TV stations also out-deliver newspapers in Web audiences by sometimes more than three to one. Local TV stations are getting the formula down for running successful Web sites for attracting and serving audiences.

As speculated yesterday, the search deal between Yahoo and Microsoft has been officially announced. Many of the expected terms apply, and the official release has lots of detail and video addresses from Steve Ballmer and Carol Bartz (notice she mentions mobile twice). Here are the key terms:

The term of the agreement is 10 years;

Microsoft will acquire an exclusive 10 year license to Yahoo!’s core search technologies, and Microsoft will have the ability to integrate Yahoo! search technologies into its existing web search platforms;

Microsoft’s Bing will be the exclusive algorithmic search and paid search platform for Yahoo! sites. Yahoo! will continue to use its technology and data in other areas of its business such as enhancing display advertising technology.

Yahoo! will become the exclusive worldwide relationship sales force for both companies’ premium search advertisers. Self-serve advertising for both companies will be fulfilled by Microsoft’s AdCenter platform, and prices for all search ads will continue to be set by AdCenter’s automated auction process.

Each company will maintain its own separate display advertising business and sales force.

Yahoo! will innovate and “own” the user experience on Yahoo! properties, including the user experience for search, even though it will be powered by Microsoft technology.

Microsoft will compensate Yahoo! through a revenue sharing agreement on traffic generated on Yahoo!’s network of both owned and operated (O&O) and affiliate sites.

Microsoft will pay traffic acquisition costs (TAC) to Yahoo! at an initial rate of 88% of search revenue generated on Yahoo!’s O&O sites during the first 5 years of the agreement.

Yahoo! will continue to syndicate its existing search affiliate partnerships.

Microsoft will guarantee Yahoo!’s O&O revenue per search (RPS) in each country for the first 18 months following initial implementation in that country.

At full implementation (expected to occur within 24 months following regulatory approval), Yahoo! estimates, based on current levels of revenue and current operating expenses, that this agreement will provide a benefit to annual GAAP operating income of approximately $500 million and capital expenditure savings of approximately $200 million. Yahoo! also estimates that this agreement will provide a benefit to annual operating cash flow of approximately $275 million.

The agreement protects consumer privacy by limiting the data shared between the companies to the minimum necessary to operate and improve the combined search platform, and restricts the use of search data shared between the companies. The agreement maintains the industry-leading privacy practices that each company follows today.

More commentary in yesterday’s post.

NPR’s CEO, Vivian Schiller, left NYTimes.com to join public radio because she saw a void in local media that needed to be filled. In a Newsweek interview published this week as NPR.org is relaunched, she elaborated on her strategy to reposition public radio around not only its on-air home but also its digital and online platforms. With the challenges facing local media from big city dailies to local TV and radio news operations, communities risk a painful loss of critical information and sense of identity.

“The reason that I came to NPR and left other big national news organizations is because NPR has something those organizations don’t have,” Schiller told Newsweek. “In all of public radio, there are 8,000 people spread around the country. They are in every community. [They have a] physical presence and a presence in the hearts of minds of the audience in those communities.”

While NPR is under her watch, Schiller intends to give the local stations the home base, tools, resources and encouragement to do what they do best on the local level. As newspapers like the LA Times shut down their investigative journalism units, she wants to see more “accountability journalism” in local communities. Local public radio will be a leader on the air and in online and digital media if she has her way.

Schiller also commented on the need to change old media business models in times of economic and technological change. Her viewpoint is taking for-profit newspapers and recasting them as nonprofit institutions won’t solve anything. As she said, it still takes money to run a nonprofit media company.

Yahoo and Microsoft are expected to announce tomorrow the search deal that’s been three years in the making, according to many sources. If we do see a deal, expect it to be structured something like this:

–Bing will become the default search engine on Yahoo, while Yahoo will take over Bing’s search inventory to sell search ads.

–Yahoo could get some form of upfront payment (speculated to be $1 billion to $3 billion) and search revenues for the first few years of the deal, less traffic acquisition costs.

–Yahoo’s display ad business could be used across both content networks.

Regardless of the fine print, the main point is that it could consolidate the strengths of each company, allowing Yahoo to focus on the online consumer media brand that it’s become, and Microsoft to focus on search technology. Yahoo also gets a much needed boost to its inventory levels and search marketing revenue potential.

The deal would also create a second-place search engine with roughly 30 percent market share to contend with Google’s 65 percent share. This would be good for users and advertisers, giving both a more formidable (than previously) alternative to Google. This was the idea behind the Microsoft’s failed takeover of Yahoo last year, and is essentially the second best thing.

If the deal goes through, it will take a while to reconcile and consolidate disparate systems, advertisers and personnel. Of course, it will also be pending Justice Department approval in the face of likely lobbying from Google against the deal. The ironic twist here is that Microsoft previously lobbied against Google’s search deal with Yahoo.

More on the deal after it’s actually announced.

We’re doing a bunch of research on self-service advertising by talking to companies that provide various ad formats such as paid search and display. This is mostly in the online realm, but we’re starting to see a move toward self service in mobile, led by companies we’ve profiled here in the past like AdLocal and Jumptap.

Today I had the chance to talk again with Paran Johar, Jumptap chief marketing officer and digital marketing veteran. He stressed that the company is seeing rapid growth in advertiser demand for mobile. Its April launch of tapMatch was an attempt to meet this demand with a self-serve mobile marketing tool.

This is essentially a play toward moving “down the tail.” Mobile marketing so far — and Jumptap’s traditional base of advertisers — has mostly been national brand advertisers or agencies. But the growth in advertiser demand is pushing this opportunity toward more mid-market advertisers as well as existing advertisers that want to extend their campaigns.

This is happening as advertisers are moving budget out of traditional media into more measurable online and mobile campaigns. Interestingly, the mobile marketing pace of adoption could be faster than what we’ve seen online because many advertisers have already been trained to think in terms of self-service performance-based marketing (read: Google).

When we think of self-serve advertising and the concept of moving “down the tail,” the SMB segment comes to mind. This, of course, is an elusive and fragmented market that is difficult to wrap your arms around from a sales perspective. Meanwhile, it often correlates to resource-constrained small businesses that aren’t the first to jump in the pool with new self-service marketing tactics.

For that reason, we aren’t “there” yet for SMB mobile marketing, agreed Johar, but that is where a great deal of the opportunity could eventually lie. Yellow Pages publishers have their eyes set on this segment, with their oft-heard “cross platform” local consultative sales strategies. If there is one thing they do have to accomplish this, it’s the direct touch points with SMBs via local sales channel.

This is the antithesis of self service, but Jumptap also sees potential in this SMB segment. An easy-to-use self-serve mobile marketing platform is one angle to attack it. We’ll also see lots more targeting tools integrated soon, according to Lara Mehanna, director of product management. For more from Mehanna, check out this video that walks through tapMatch.