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Yahoo: Trying to Be a Local Hero

By Cynthia L. Webb
washingtonpost.com Staff Writer
Wednesday, August 4, 2004; 9:33 AM

The search engine race continues to rev up as Yahoo and Microsoft try to surpass search king Google.

Yahoo is betting that search results tailored to the customer's location will give it the edge. The company's new local.yahoo.com test site "greatly improves the ability of users to find directions, maps and other information related to everything from restaurants to movie theaters to day spas," Yahoo said, according to the Wall Street Journal. "Yahoo also has begun letting users rate and review businesses in their area through its local search site. The search results Yahoo provides include advertisements, called 'sponsored results,' for local businesses. Yahoo's move comes as its competitors are increasing their focus on the local search market. Google Inc. in March introduced Google Local, which provides maps, directions and other information for local businesses to users searching for such information on the Google home page."

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Smaller search company AskJeeves also is latching onto local search upgrades as a way to stay in the competition. More from the Journal: "Yesterday, Ask Jeeves Inc. and IAC/InterActiveCorp's Citysearch said they formed a partnership under which Citysearch's local information and business listings will show up when Ask Jeeves users conduct searches on the site." IDG News Service said Yahoo "is hoping to make its local offering stand out by adding extra features, such as the ability to make reservations for hotels and restaurants using the tool, and by adding a rate and review feature where users can sound off, giving their opinions on certain establishments."
The Wall Street Journal: Yahoo Improves Site That Enables Local Searches (Subscription required)
IDG News Service via InfoWorld: Yahoo Tries To Hit Closer To Home With Local Search

So what's the appeal of serving up local search results? There's a lot of growth in the local advertising market, the Journal said. "Online ad spending by local businesses in the U.S. this year is expected to increase 38% to $2.9 billion, estimates Borrell Associates Inc., a consulting and research firm." And Reuters noted yesterday: "Like Google, Yahoo's aim is to cash in on local advertising, a market worth billions of dollars in revenue and a relatively small Internet presence."
Reuters: Yahoo Launches New Local Search Engine

Forrester Research analyst Charlene Li explained more to Bloomberg. "They are looking for ways to bring in new advertisers by training users to do local searches," Li said. "The service may help Yahoo sell more advertising to local businesses, said Paul Levine, general manager of Yahoo Local. Internet companies including Google Inc., owner of the most-used search engine, are developing services to offer local information as the growth of their sales to national advertisers slows," Bloomberg reported.
Bloomberg and other reports via the International Herald Tribune: Search Engines Rev Up In The Race Against Google
Bloomberg via the Chicago Sun-Times: Yahoo Testing Local-Focus Search

CBS MarketWatch picked up on this idea too. "As the number of keywords and phrases to be searched online nears a ceiling, search engines are working toward expanding the inventory for advertisers to bid on. One way to do so is to extract more information about local merchants in order for searchers to find them under new keywords, such as 'Sunday brunches,'" the media outlet said. All of this renewed focus on the local search market should make the Yellow Pages publishers nervous.

Here's the market share companies like Yahoo are eyeing: "Kelsey Group researchers estimate that $450 million was spent in online yellow-pages advertising in 2003. By contrast, the yellow-pages industry as a whole is estimated to be $22 billion annually," the CBS MarketWatch article said.

The San Jose Mercury News noted in its coverage of the new local search tools by Yahoo and AskJeeves that the companies "are joining the growing effort to attract people who want to find local businesses or services. The announcements Monday are part of a move by Internet companies to wean consumers and advertisers from print versions of the Yellow Pages and other directories."
San Jose Mercury News: Ask Jeeves, Yahoo Tap Into Local Search (Registration required)
CBS MarketWatch via Investor's Business Daily: Yahoo Unveils New Local Site; SportsLine CEO To Move On

Meanwhile, Microsoft is getting personal with its search efforts. The company on Monday said it is customizing its search services to offer up personalized search capabilities. Reuters had more details yesterday, picking up on remarks that Chairman Bill Gates made in a speech on Monday at a Microsoft research faculty summit: "Personalized search promises to deliver search results that are more relevant by taking into account an individual's interests based on previous search queries and other information. Gates was responding to a question dealing with privacy issues and mentioned Microsoft's search efforts because users would have to provide private information to get personalized search results. ... Last week, Microsoft demonstrated a search engine that looks for information on computer hard drives as well as on the Web."
Reuters via washingtonpost.com: Microsoft Aiming To Deliver Personalized Search (Registration required)

And in another effort to compete with Google, Microsoft will offer its first-ever Web log service in Japan next week, Reuters reported. Recall that Google owns blogging site Blogger. Microsoft wants its blog service to have "one million users in the first year, intensifying competition with Google Inc." The same article said Gates "said in May that Web logs and the way they were distributed could be used as business communication tools, signaling Microsoft's growing awareness of blogging as both a potential threat and a new business opportunity."
Reuters: Microsoft Launches Web Log Service In Japan

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