Shopper publications attending the International Classified Media Association meeting in Brussels this week – the vast majority from outside the U.S. – are showing resilience against the challenges of the Internet, and looking at new models to sustain their existing businesses. I was presenting a keynote on the transition to Marketplaces.

Shoppers, of course, are often considered the least protected of local media against the inroads of Internet services. But the companies at ICMA, mostly started by entrepreneurs and retaining an entrepreneurial edge, are carefully assessing next steps that would incorporate new media.

One big takeaway is that their print publications are seen as a major advantage over Internet pure plays because that’s where advertisers still place the value. Few companies are considering strategies that don’t include a print component. Jan-Pieter Oosting, Managing Director, WorldYacht BV/Yachtfocus of the Netherlands summed it up best: “The Internet is where content is. Print is where the money is.”

Everything else seems to be fair game. Indeed, perhaps to a greater degree than other local media, the shoppers are especially zeroing in on the development of vertical publications; the deployment of self service advertising using online; mobile tie-ins to print ads, and even mobile classified video in Second World markets that don’t have high Internet penetration. Mobile experimentation seems especially popular among many ICMA attendees, especially as fast 3G network penetration increases.

SmallTown, the Bay Area hyperlocal company, is changing its core focus and will concentrate mostly on getting wider distribution of its WebCards microsites for small businesses.

While the nine-person company will continue to maintain its hyperlocal sites, which are now in six Bay Area communities, it sees a bigger opportunity in having third parties such as IYPs and search engines selling WebCards, says CEO Hal Rucker. “WebCards.com has always been our vision. It hasn’t been hyperlocal.”

The WebCards are small-business microsites that may be transported along multiple platforms (i.e., Web sites, e-mail, directory listings, etc.). In this regard, they are similar to other providers such as AgendiZe, Mixpo and Wibiti. A major driver of the WebCards is the ability to “encase” video.

Rucker says the cards will be featured on Google Gadget Ads, where he believes they are the first to focus on small business. Talks are also “very far” along with several major resellers.

As for the SmallTown hyperlocal sites, there are currently 12,000 registered users, and 23,000 WebCards. The bulk of these are on a free tier, but 600 are enhanced customers, paying $50. Most of the enhanced offerings have been sold by premise sales, although some have come in via self-serve.

The vast majority of WebCard users are only using one card, but approximately 15 percent have taken out multiple cards. A real estate agent, for instance, might want to have cards for specific property listings as well as for corporate identity.

The company is also introducing featured listings, which are priced at $4,200 per year for the top listing slot, and $1,200 for the second slot. “With six cities and 300 categories, you can see how it would add up,” says Rucker.

In addition to WebCards and featured listings, Rucker says the company is also bringing in some revenue from white labeling its services. The San Mateo Chamber of Commerce, for instance, is one customer.

Rucker notes that the company has also extended its initial $3 million funding from Formative Ventures and others, and has now raised $4.5 million in total.

These are tough, fast-changing times for newspapers, and many of them are taking severe measures to get back on track. Sometimes, it means putting the innovative online guy in charge of print too, as Bay Area News Group has done with online advertising head David Prizer. But sometimes, it means consolidating power under the old print hands that believe they need to “own” the online efforts because that is where the action is.

Last week, The San Diego Union-Tribune, for instance, laid off its online leadership: GM Chris Jennewein, content head Ron James and business development head Jim Drummond. Mark Davis, the paper’s current head of strategy, will take over the Internet operations.

Some anonymous spin in The San Diego Weekly Reader, an alternative paper, suggested that Jennewein and his team probably had to go because of a “disastrous” experiment in the creation of an online radio station, and its decision to provide a bigger news footprint during the San Diego fires last year, removing advertising from the home pages. The implication, I guess, is that the paper should stay on the straight and narrow and maximize all revenue opportunities (or whatever the cliché.)

But will the print people clearly see the opportunities inherent in the online world of marketplaces and community? Can they leverage what they have into new businesses? It is a fair question.

I have consulted for SignOn on and off for eight years. From my limited interactions with the company, I could see that there had been tensions among the print and online staffs. But I don’t know the real reason for the online team’s removal.

From my observation of SignOn, I can tell you that the site has been a pioneer among newspapers in the creation of e-mail targeting for local businesses and sponsored verticals, especially for tourism, such as a Super Bowl guide when the Super Bowl came to town. SignOn also created a business directory that specifically focused on tourism. And it has extended the franchise to vertical directories in print, creating widely distributed elder-care and legal directories.

It also has been a pioneer in the use of multimedia, including photo libraries, podcasts and video. All this especially came to fruition during its exceptional coverage of the devastating San Diego fires, where the site was a community lifeline for hundreds of thousands of people who had been evacuated. I don’t remember any criticism about its decision not to run advertising on the home pages at that time.

What it was doing was building the loyalty of the local audience. Shouldn’t that be priceless in a town where the print circulation is in the low 20s?

The site has also conducted a number of inexpensive experiments, including the Wikis for local community and music scene information and mobile news headlines, which might be seen as a necessity in QualComm’s hometown. More recently, it created the AmplifySD Radio local music station and the SignOn Radio station, which expanded the paper’s footprint to the work day with weekly shows on such topics as local gardening, dining and online politics.

I will need to talk to someone who can tell me why it was such as bad idea. While there had been some equipment to purchase, the day-to-day operating costs certainly weren’t very much.

What Jennewein and company didn’t do was jump after every opportunity and reinvent the wheel with every new thing that came along. They prioritized and worked within a budget.

The print people will now apparently take over the reins of the operation, determined to focus on both print and online. Maybe they will do better. But obviously, this will only happen if they understand what Jennewein and company have long understood: that their job in not only to sustain existing revenues, but also to create new revenues that comes from the opportunities that are inherent in interactive media and by reaching a broader swath of the dynamic San Diego community.

Despite some traction by sites like Yelp — OK, specifically Yelp — the hybrid IYP/rating-and-review segment remains something of a question mark in the industry. It remains to be seen whether such sites can attract a large number of frequent reviewers and users — and not just recent college grads and/or mothers. It also remains to be seen whether they can cross the chasm out of restaurants and bars into the gold mine of services traditionally mined by Yellow Pages.

Besides Yelp, other sites abound, including Cox’s Kudzu, Boorah, Loladex and Citysearch’s Insider Pages. But it is hard to get a handle on how well they are doing. MojoPages, a newer Yelp-like site, reports it has been making progress.

A year out of the gate, the San Diego-based site claims a solid base of 500,000 user reviews and 100,000 local advertisers across the U.S., mostly on the backs of partners including Superpages.com, Marchex, ServiceMagic and ServiceMaster. It also has coupon distribution with ValPak.

President Jon Carder, a 29-year-old vertical search pro who previously sold a mortgage-oriented venture to IdeaLab, says the site has been seeing steady growth. He acknowledges the comparisons to Yelp and others, but says MojoPages has been developing its own unique mix of features, including video reviews, e-mail notification for reviewed businesses, and an “ask friends” feature. It also has set its algorithms to bring up more relevant results.

A search on MojoPages for Carpet Cleaners in Sen Diego will get you mostly relevant results, he says. If you do a search for carpet cleaners in San Diego on Yelp, he says, “six of the 10 results aren’t even carpet cleaners.”

AOL may have trouble on several fronts, but it still gets millions of users and it intends to fully leverage them at the local level, per Chris Spanos, Director of Search Verticals, who was speaking at Kelsey Seattle. “Given its scale, local just hasn’t been getting fair share.”

Spanos says the local products will be receiving people, money and time. There will also be vertical investment in autos, travel and health. Previous regimes didn’t see rich opportunities in local and under-invested in the local products, he notes. They also didn’t leverage the relationship between the local sites and Mapquest, which remains the #1 mapping site. But that will change, especially as the city guides and Yellow Pages get relaunched.

AOL is also going to transform its sales effort. While dedicated local sales won’t be brought back, circa late 1990s, new self-serve and partnership efforts will be introduced.

Google is a collaborative partner with all verticals, and generally speaking, has no interest in competing with them, per Adrian Madland, Google’s head of automotive strategic partnerships, who was speaking at Drilling Down on Local ‘08 (a session also covered by TKG here and here).“We love all the vertical people in the room,” said Madland. “We don’t do verticals. We try to make them better. We want to focus on search”

Certain verticals, however, have been singled out by Google as unique business units, which no doubt gives pause to competitors, however innocent Google’s efforts may be. “Automotive has been so successful for us that we have broken it out for a special focus,” noted Madland, a former exec at Ford Direct.

Madland also volunteered that there have been some misunderstandings about Google efforts such as GoogleBase, Google’s giant aggregation site. It is “not about taking over classifieds,” he emphasized. “It is about driving people to classifieds. Our goal is to partner.”

Cars.com President Mitch Golub, speaking on the same session, noted that his company, part of newspaper-owned Classified Ventures Inc., was one of those that are partnering with GoogleBase. “We participate because we want to see what Google is up to,” he said.

Golub didn’t specifically challenge Madland’s claim of disinterest in entering the vertical marketplace. But he complained that different parts of Google seem to be unaware of what the other parts are doing. “There is a complete disconnect between the people working on verticals and (those working with) business partners, like us,” he said.

Whether or not companies like Google ultimately intend to compete, Golub doesn’t believe they constitute a real threat because they aren’t really positioned to do much selling at the local level. The challenge for Google is the sales component. They can do back-end reporting but won’t get far without local sales staff. “We don’t have 700 sales people because we want to have 700 people,” said Golub.

True, Google has done well having third parties sell AdWords for it –including some newspapers. But Golub believes there is also little prospect of collaborative selling between Google and Cars.com (and newspaper sales staff dedicated to auto). “If you think newspaper people going to go out and try to sell your products, they are smoking something,” he joked.

Generally speaking, Golub added that vertical sites have a major advantage over other publishers: “Consumers love our advertising.” He added that newspapers are beginning to finally bet big on vertical sites such as his. But it might have been better if all along, traditional media had been investing three to four percent of their revenue in R&D. “The LA Times didn’t do this three years ago. They didn’t have to.”

Admission Corp. has sold its Spotlight Ads division to Cobalt Group, which provides services to over 40 percent of U.S. auto dealers. The company retains control over its intellectual property and Marketplaces businesses, which account for a small piece of its annual revenue, according to company president Sarah Pate. Those businesses will be sold separately.

Twenty-two of Admission’s 31 employees are being offered contracts by Cobalt, and the company’s San Ramon office will remain open.

Admission is the descendant of iPIX virtual tours used by Realtors and others. It pioneered the use of online product pictures by eBay, and has contracts with many newspapers, Yellow Pages companies and others. It has lately focused on the proprietary Spotlight Ads technology that enables users to search for classifieds and receive an interactive banner of info laden thumbnails in return.

Pate says Cobalt was impressed by small trials it had conducted with the Spotlight Ads, where it saw results double when effectively targeted. She anticipates that Cobalt will be effectively positioned to go after dealer dollars for inventory, and also seek a piece of the $3 billion now assigned to dealer associations, who currently have little or no presence in Internet marketing.

If you believe at all in the “marketplace” vision of next generation commerce, it is hard to dispute that Yahoo! remains front –and- center as a verticals factory. This core strength of Yahoo!’s is especially important to note in the wake of Microsoft’s pullback from acquiring the company.

What accounts for Yahoo’s focus on verticals is the critical “engagement of advertisers and publishers” in areas they wish to target, noted VP Michael Yang, who runs autos, real estate and now health for Yahoo! “Yahoo! aspires to be the starting point of the Internet,” he said at The Kelsey Seattle conference. “We want to increase the size of the funnel at the beginning level (awareness).”

Yang argued that the company’s goal with verticals is to be #1 or #2 in each area. In the case of finance, news and sports, it is already there. “In other areas, we aspire to do that.”

Yahoo!’s traditional focus on community also informs the development of every vertical. “It is where automotive is going, and where we are taking health,” said Yang. “We are taking a truly national, centralized experience” and “trying to be holistic.” Yahoo! is also focused on “exposing new data” wherever relevant.

(This post is excerpted from an advisory written for Kelsey Marketplace clients)

MediaNews Group, the fourth largest newspaper publisher with titles such as The Denver Post and The San Jose Mercury News, has teamed up with TauMed to launch a video-centric health vertical. The vertical launches this month at four of MNG’s smaller papers. It will eventually be incorporated across the chain. Other local media partners are also being lined up.

TauMed, which is privately funded and has 12 employees, is the brainchild of Tauseef Bashir, a former executive with FAST Search and Transfer, the search company recently acquired by Microsoft. FAST’s influence is readily apparent in the service’s intent to make every action searchable. (MediaNews Group is also a FAST client.) “All the information is search driven,” says Bashir.

As with other health portals in the marketplace, the service isn’t focused on local information other than directory content featuring doctor and hospital search. More local content will come in a second phase, says Bashir. The local effort will be aided by the promotional, sales and editorial capabilities of the local syndication partners. Ratings and reviews are probably the core of the local experience, he notes. The site will also be mobile enabled.

Search has its limitations for local businesses. In fact, many would just as soon place media rich display ads, but for the expense and creative challenge of developing the ads. That’s the hurdle being addressed by AdReady, a venture-backed Seattle company that has created hundreds of ready-made ads that can be selected on a self-serve basis.

Since launching in October, the company has signed up 9,000 accounts. The clients range from painters and plumbers (along with large companies such as Alaska Airlines). Going forward, the company is targeting such entities as organic food stores.

Backed by $12 million from Madrona Venture Group, Khosla Ventures and Bain Capital, AdReady has developed more than 600 display ad templates covering 16 categories, including such verticals as health, auto, real estate and food and beverage. In the health category, for instance, the ads include a “Golf Back Pain” theme, a “beating heart” theme” and a “signed cast” theme.

The ads are free, so long as advertisers provide AdReady with a 20 percent commission when they are placed on various ad exchange services, including Yahoo!’s Right Media, Advertising.com and Google. In addition to art work and placement, AdReady provides full reports, such as clickthrough rates.

While the ads are available directly from AdReady, the company also makes them available on a white-label basis. For instance, the company is partnered with Cobalt for auto dealer relationships. Reader’s Digest’s Allrecipes.com, for instance, is another reseller. AdReady was started by former Classmates.com exec Aaron Finn. Recently, Finn was joined by former AOL VP Mark Feldman. There are more than 30 people at the company.