The final day of The Kelsey Group’s Drilling Down on Local conference featured a keynote by Merrill Brown of MMB Media. Brown is an industry guru with a history of developing groundbreaking media strategies and operations. Among other things, he has been editor-in-chief then SVP of MSNBC.com. He also created Court TV along the way.

Brown’s comments served as a fitting capstone for much of the conference – or given his morning time slot, perhaps I should say a prequel to the conclusion.

Brown thinks the various “revolutions” that are shaking up online market-making and marketplaces are in their early stages. Specifically, he believes:

• The newspaper industry is just beginning a period of wrenching restructuring (of its content strategy and business model).
• Verticals will continue to grow apace, to the point where online vertical markets will play a vital part of our quotidian online experience.
• Web 2.0 capabilities (e.g., social networking, video) will become closely woven into online markets.

What was most interesting about his remarks, however, was his overall tone. Brown spoke with the urgency of someone (a guru) who senses we’re in the early stages of a real revolution, and we need to be aware of the magnitude of the changes to come.

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)

Idearc Media announced yesterday that it has named Briggs Ferguson president - Internet, replacing Eric Chandler, who departed in January to accept a position in another industry. Ferguson spent five years at IAC Citysearch. He left in March 2007, replaced by current Citysearch CEO Jay Herratti.

Since leaving Citysearch, Ferguson has been active advising media and technology companies. Last November, for example, he joined the board of directors of Ripple, a California company that distributes advertising through video screens installed in high-traffic locations. Before Citysearch, Ferguson held positions at EMI and Launch Media (later acquired by Yahoo!).

Ferguson certainly brings substantial experience in local online directional media. His experience offers some familiarity with the directory world and how it operates without being steeped in the Yellow Pages culture. It’s a nice balance and a smart choice for Idearc to make. Ferguson will have a demanding job ahead, as the IYP and local search arena becomes more competitive and the stakes for publishers rise, as they become increasingly reliant on their digital products to drive growth.

If Facebook is really the next marketing platform, the guys at Loladex will have guessed right. The new rating and review company, formed by two alumni of AOL Search and Yellow Pages, had initially been incubated as a destination site that enables user reviews, business listings and third-party content from sites such as OpenTable.com and ServiceMagic.com. Sometime last year, the decision was made to build specifically for Facebook.

The key advantage of the Facebook-only strategy? Leveraging Facebook’s discrete social and geographic groups, and growing user base. It is something that destination sites such as Yelp, Kudzu, Citysearch, YellowBot and Boorah don’t easily do. When was the last time you looked at a review and wondered whether the reviewer had similar tastes? The idea here is to stick with established friends.

But there are risks. Facebook could compete directly against the site, marginalizing Loladex as a little used “application” (like six other applications I have that are already shunted to a side menu). Or maybe Facebook never really becomes a universal platform, and users find themselves shut out of the larger universe.

That seems possible. Facebook may be a little stratified between the college/post-college crowd, and an older professional set. There is little in-between. And the professional group of friends on Facebook may not have common tastes in restaurants (or gyms).

But Loladex founder Laurence Hooper is gungho on the Facebook tie — which is one-way. The company doesn’t actually work with Facebook. “Some people believe it is on the verge of being abandoned, but I believe the opposite,” he says. “Facebook has enormous potential, and the serious applications are just starting to arrive. Products like Loladex will help people realize that Facebook is useful, rather than just entertaining.”

In any case, it isn’t really about Facebook. In July, the site will launch a broader site based on the new “open social” standard that Yahoo!, Google and others are participating in. What Hooper and fellow AOL YP alum Dan Goodman are looking at is a social network that is “fully portable” and “scales easily. Don’t ask people to do the work” of exporting their friends — and their friends’ content — from one network to another, he says.

Last week, we wrote about The Seattle Times Co. and its new “Network search,” which is powered with FAST. This week, we are covering The Boston Globe’s Boston.com and its new “Federated” search solution, powered by Google.

Federated and Network search are different names for pretty much the same thing. But even as the respective newspapers try to tackle the issues of incorporating small-business advertisers and the elements of local search, they are taking somewhat different approaches.

Boston.com’s mission is to move away from “newspaper.com” toward becoming the aggregator of local community content, notes VP of Product Bob Kempf. The site has taken several concrete steps to get there, including local news outreach, crawls for local events, multimedia search, and perhaps most importantly, business listing search (i.e., Yellow Pages).

The initial step was making the news from The Boston Globe and content from Boston.com searchable. But since then, it has also reached out to 4,500 local Boston-area sites to supplement the content.

The event listings, using ZVents, was something that added a unique element to the site and “quadrupled the amount of listings,” says Kempf. It is more than just effective crawling. Users are seeing that the site has a really good event guide and submitting listings of their own.

Multimedia is another key ingredient for the site and its 360-degree, federated search strategy. As the site has added more and more audio and video, its content has become less findable. But that has been helped by adding search, via Everyzing, a vendor that transcribes audio content to track the content.

The multimedia application “doesn’t bring in huge traffic,” but it is very relevant for a news site, says Kempf. And it goes way beyond the search box. “What we’re doing is adding little ‘searchlets’ into the site, he notes. “We drop [clips of] Manny Ramirez right into articles.”

The business listing effort, on the other hand, suggests the strongest revenue opportunities. Many newspapers are relying on local search vendors such as Planet Discover, Local.com and Harvest Info.

But Kempf’s team reached a conclusion that those solutions would probably always be “second rate” compared with one provided by a major search engine (i.e., Google, Yahoo! and Microsoft). He notes the search engines are pumping hundreds of millions of dollars into search algorithms, making relevant matches to queries, ratings and reviews.

Ultimately, Boston.com chose to partner with Google for a variety of considerations, including the power of the Google Maps brand, which appears alongside Boston.com when you go into Business Listings; its relatively low upfront cost (it pays Google just a small amount for the searches that are actually made); access to its extensive tool set; its high level of maintenance; and the ease of using Google’s licensed listings instead of having to make its own deals with a listing company. Google’s broader deal with The New York Times Co. might have had some influence as well.

Boston.com also appreciated the ability to use Google to build out a tiered list of searches that any newspaper would want to have; a “white list” for pure listing lookups; a “gray list” for in between searches, such as place names; and a “black list” for inappropriate searches, such as tying merchandise ads to a news story on a murder in Worchester.

On a business basis, the deal with Google gives Boston.com a chance to make money on reselling the CPM at higher rates and also from local AdSense ads that appear alongside the searches, says Kempf. It also provides new inventory to sell around the search box — not dissimilar to what newspapers have always done, selling mortgage ads around real estate listings and other content.

What Kempf and his team haven’t begun to work on is any search integration with classifieds, an area he admits is the “least sexy.” It also hasn’t begun to aggressively sell to smaller local advertisers — something The Seattle Times appears to be far in front of. “It was very core for GateHouse,” where Kempf worked on Wicked Local in the suburbs that surround Boston, one of the first federated search projects. “But it isn’t core for us.”

In a followup email to me after this post was written, Kempf clarifies:”Classifieds are on the roadmap but not on the immediate roadmap; small business listings very much are core and are on the immediate roadmap.”

Next steps that Kempf envisions include using the search technology to help develop more vertical directories, such has health and business. The site is also getting a massive dose of TV and radio promotion, where Boston.com is not treated as a newspaper, but as an information source.

“The trick is to untrain users for news,” he says. In a followup email to me, also cited above, Kempf adds:  “The news use case remains core and very important to us.  Expanding beyond that use is the challenge.  I wouldn’t want your readers to think that we’ve abandoned news or its importance to us.”

One big takeaway from the NAA Marketing show last week in Orlando was that newspapers are ready to build up a zillion niche products that allow them to leverage their editorial talents. But not much progress, or even attention, is being paid to local search. It makes you wonder if newspapers are really serious about reaching out to the high volume of small businesses in their communities that have previously relied entirely on Yellow Pages.

The Seattle Times Co., however, is definitely an exception to the rule. Today, it launched “Network Search” across all its newspaper and vertical services, including Seattletimes.com, SeattlePI.com, NWsource.com, NWJobs.com, NWautos.com, NWapartments.com and NWHomes.com. The new search — which is not unlike the “Federated Search” solutions available from Harvest Info and Gannett’s Planet Discover – also incorporates some blogs and other sources.

Developed with FAST Search and Transfer (which is being purchased by Microsoft), Network Search bites the bullet with a single search box.

Many papers have been reluctant to go in that direction because the results would be too generalized. But the end result is that some papers have a dozen or more search boxes. And nobody ever thinks to look for anything on the site. They just go to Google.

One immediate advantage of The Times’ Network Search is that it opens up sponsored search advertising in a big way — something that has been largely hit or miss using third parties. In my limited testing, it works well.

A search for “Dungeness Crabs,” for instance, returns news stories on the harvest and restaurants where you can get them. It also has helpful sponsored search results for several excellent mail-order houses. A search for “Marqueen” has all the reviews and news to the nice boutique hotel in Queen Anne. And helpful sponsored searches for the competition.

A search for “Maria Cantwell,” on the other hand — the only senator I know since she used to do business development for Real Networks — returns her office’s latest news releases and news stories. And then also sponsored links for “Cantwell Hotels” and other things that probably have nothing to do with her. That’s probably the way it should work.

Seattle Times Interactive head Patricia Lee Smith says she believes the site has unmatched local content and “a uniquely local lens” that non-native search engines probably can’t hope to match in the foreseeable future. “This will also be the first of many advertising trials to connect local businesses with online readers via targeted search advertising,” she says.

Smith also promises that the search initiative is going to go deeper and deeper. The search box, for instance, will eventually be introduced on each of the Times Co.’s marketplace sites.

The smart “post Web” money is looking at health care (and green solutions), right? But based on Health 2.0: User-Generated Healthcare, a conference that took place March 2-4 in San Diego, the subject may no longer be search engines or e-commerce, but it’s still about Web and mobile applications. And local is still the last frontier to conquer.

“It is all local, local, local,” says Tony Miller of Carol, a packager of localized, online health services. “Local providers, local consumers. Ninety-five percent of services are consumed with 10 miles of a residence; most providers really understand that.” Carol has developed a set of 400 localized “CARe packages,” based on the premise that consumers want solutions more than providers.

A typical landing page, for instance, is “Welcome to Minneapolis/St.Paul: The CARe Marketplace.” The thesis is supported by research from The Pew Foundation, which has found that searches for doctors and hospitals are not as popular as searches for symptoms and treatment.

Xoova CEO Tommy McGloin, former GM of MapQuest, provides a dual focus on doctors and symptoms. “Health care is essentially local, online and offline,” he says. Xoova, formely known as Doctors Direct, provides searchable profiles of doctors and health-care providers and primarily relies on banner advertising.

“We’re an example of the long tail,” says McGloin. “We take unstructured data on the Web, and we put it in a structured directory that is homogenous and easily discoverable via Google searches.”

McGloin also notes that a site like his can happily live alongside health group Web sites. He finds a clear analogy from the travel business. “We’ve always had Expedia alongside Southwest.com,” he says. “They’ve coexisted for a long time. The Google search is the key thing.”

Xoova’s searches readily come up on Google and other search services. But Google, Google Maps and the new Google Health vertical, actually has a formal tie to HealthGrades.com, a competing provider that has its roots in hospital ratings. The partnership has been in place for about a year.

The industrial-strength service provides physician profiles on every practicing physician in the U.S., including information such as sanctions and malpractice cases. It gets more than 4 million unique visitors per month. “We try to connect patients to the best health-care provider,” says HealthGrades SVP Scott Shapiro.

A new initiative for the company is the addition of physician ratings. It currently has 50,000 ratings, and 1,000 ratings are coming in every day. Shapiro says the ratings are especially helpful in updating profile information. “Forty percent of health-care directory information is out of date,” he says, citing a stat from The Wall Street Journal. The site is also adding physician videos.

The ratings focus is something that is embraced by many other entrepreneurial services as well. For instance, San Francisco on Call is a service that has gotten 36 local reviews on Yelp. Vitals.com is another one, seeking to become the “eHarmony or Match.com of medicine.”

Healthcare.com is yet another lister of local health services. The difference is that it provides direct leads, which it tracks via dedicated call tracking. It has also built up its physician referral activities via health-care verticals, such as hair transplant doctors.

In addition to its activities as a destination site, Healthcare.com is syndicated across the drugstore.com network. The relationships with doctors are “not mutually exclusive,” says Shapiro.

So — how do doctors and other health-care professionals feel about such services? The sense from Health 2.0 is that a new generation of younger providers are fed up with the bureaucracy and inefficiencies of the current health system, and eager to provide more efficient, consumer-friendly services — whether it is by enhancing a profile, or answering simple questions for $1.99 a minute — the business model for a “human-powered search” service called LiveWisdom from Organized Wisdom.

Another advice service, Hello Health from MyCA, calls itself “the Geek Squad for home health care” and charges $15 a month as a base. “In primary care, we are the lowest part of the food chain,” says Hello Health founder Jay Parkinson, who notes that primary-care bills are typically a couple of hundred dollars a visit, compared with $800 just to see a cardiologist. His feeling is that Hello Health’s monthly fee is just a token amount, when it is considered as a check on the monthly insurance bill for many people.

Contemplating all the services, Dr. Enoch Choi says they are “a wonderful way to find a physician.” But he says many doctors will “roll their own.” He also says larger medical groups may already be several steps ahead of the new entrepreneurial services. “Larger groups already have pages that describe a doctor’s expertise and background. But if these [new] sites become more popular than their own sites, physicians will be clamoring to get on them.”

Yelp! has announced that it got $15 million in a fourth round of funding led by DAG and existing investors.

The company also sent some growth metrics:

October ‘07 — 5M Unique Visitors
December ‘07 — 6M UVs
January ‘08 — 7M UVs
February ‘08 — Numbers aren’t in yet but there were 8.3M UVs in the past 30 days.

Total number of reviews posted to the site = 2.3M.
It took 2 years and 3 months to reach 1M reviews (May 2007).
In the past 8 months an additional 1.3 million reviews were posted.

In its short history, Yelp has become something of a model for how to build a local review site and has become a clear favorite of the twenty- and thirty-something urban “foodie.” Its success has also spawned a number of similar models in Europe, such as Qype, Welovelocal and TouchLocal.

The challenge for Yelp will be to replicate itself in new cities, broaden (and deepen) its base of users, and spread its ad support beyond restaurants and bars into the services arena — something it says it has been having success with.

It’s clearly strongest in hometown San Francisco, and it has good traction in New York. It also sells ads in Los Angeles, Chicago, Seattle and San Diego.

So –what will it do with its new money? We’d guess it is likely to be used to expand to new markets, add new verticals, make minor acquisitions and do more marketing. The company has certianly used some interesting marketing tactics to seed reviews in San Francisco such as providing “People on Yelp Love Us” stickers for businesses to put in their windows, or lobbying the SF City Hall to establish a “Yelp Day” in the city (there has also been a small but interesting Yelp backlash as there is with any social phenomenon). Expect more of this kind of marketing in new markets.

To help this growth in New York, the company is also in the process of opening an office there. I plan to talk to Yelp CEO Jeremy Stoppleman later this week to dig deeper.

Yellow Book USA announced a redesigned Yellowbook.com today that features a new clean and simple user interface and a map-based search featuring Microsoft’s Virtual Earth. 

In addition to the enhanced mapping feature, the new site also includes some new navigation tools, such as “predictive” drop-down menus to help consumers refine their search more seamlessly. For example, when I searched for Pizza in Libertyville, Illinois (my hometown here in Flyover Country, USA), the “expand location” drop-down menu suggests “Lake County” as a logic expansion area. Nothing dramatic, but it does make refining the search a little less of a chore. Other drop downs refine by proximity to an address, alpha order and category refinement. 

The new layout places most advertisers above the fold to reduce the amount of scrolling to view results. All in all an improved experience, based on our quick tour. 

The redesign is well timed for Yellow Book, which recently made news by being cited by comScore Networks as one of the fastest growing Internet sites of 2007. 

OK, so I’m on a Web 2.0 kick. I guess I’ve made it my New Year’s resolution to get more publishers and local search companies thinking about the broader meaning and business opportunities Web 2.0 presents beyond consumer reviews and online video.

I came across a terrific post from LDPodcast. While not a business-focused Web site, it provided some very enlightened ideas on how sites can better generate timely, relevant and desirable content while engaging consumers in a meaningful way. Some of the ideas put forth (with my own local search spin) include:

Offer tools that allow advertisers to produce webcasts. Webcasts are like live mini radio talk shows where 20 to 30 minutes of content can be shared with the ability to answer questions on a specific topic or area of concern. Companies like Webex or Blog Talk Radio provide excellent tools to make this service possible. Imagine housing webcast shows on timely topics such as buying a car, how to remodel a bathroom, tax advice, wedding planning and more on your local site. Allowing advertisers to produce these, offering a way to promote the webcast and linking a library of past shows to their profile page or listing would add quality local editorial content to a site.

Include tools to create and post podcasts. Podcasts are generally short-format audio or video segments that can cover specific topics, provide step-by-step instructions for common tasks or answer commonly asked questions. Services like Audioblog and Clickcaster offer simple, easy-to-use online podcast tools. Advertisers could use these to simplify their customer service handling, provide education so consumers would be less intimidated about using their products or services, or enhance an advertiser’s perception as a local expert. Again, providing a way to promote the availability of advertiser podcasts and then linking them to the advertisers’ profile page or listing not only adds value for the advertiser but also adds quality content to the site.

Provide common forms and instructions. Allowing advertisers to place forms and documents is a value added service. Rather than having to spend time at the doctor’s office filling out forms, consumers could go to their listing or profile page and download the forms to save time. Insurance agents could have application forms available, employers could post job application forms, and process instructions could be added to help prepare consumers for appointments.

Offer online scheduling. Offering advertisers applications that allow for online scheduling as well as developing a calendar system where common tasks and purchases could be scheduled would be valuable to both advertisers and consumers. Consumers could book pizza Fridays, oil changes, dry cleaning appointments, haircuts and many other tasks on a calendar system that would then push valuable offers to them a few days or weeks in advance. And offering the ability to schedule appointments all in one place is a very engaging way to generate leads and book business.

Web 2.0 is about engaging consumers in a more personal and useful way, while local search is about relevant local content and a means for linking local buyers and sellers. The ideas above provide the best of both worlds — additional services that could be monetized by publishers and local search sites, the development of quality local advertiser content that can be picked up by search engines, and real consumer value in the form of education and enhanced customer service. Let’s resolve to make this a Web 2.0 year.