Online ad sellers think local

Thu, 2005-09-15 15:01.

"Once you get these small business customers to advertise online, it's going to be a billions-of-dollars shift," said Stuart McFarlane, chief executive of Pasadena, Calif.-based Insider Pages. "But the real challenge is, how do you bring in yellow-pages customers at a low enough cost to make it affordable?"

Search leaders Google and Yahoo have created largely self-service empires that let marketers bid for and place promotions next to search results, requiring advertisers to pay only when people click. The cost-effectiveness of search ads has attracted pioneering companies for years, but now marketers of all stripes are signing on, including national and international businesses.

Local advertising dollars, however, remain elusive. Google and Yahoo handle only a couple of hundred thousand local merchant ads, compared with the potential for tens of millions of customers, according to industry analysts.
"It's enormously difficult to get these small businesses to adopt Internet advertising," said Greg Sterling, an analyst at the Kelsey Group.

Small and medium-size businesses are typically stretched thin and, unlike national advertisers, rarely can afford to hire agencies to handle ongoing keyword auctions offered by search engines. Many small businesses know that the Internet could help them but have neither the time nor the inclination to go online, because of the medium's perceived complexity.

Still, analysts say, consumer behavior will drive change. Unlike the pervasive hype of the Web boom, Sterling said, "there's a reality now to the Internet that didn't exist before--consumers are doing research to find products and services."

 
Full article

Of Searches and Psychics: The Costs of Long Tail Businesses

Thu, 2005-09-15 14:55.
When individual transactions are very small, non-monetary costs dominate
Chris Anderson of Long Tail fame recently posed a question in a post on the economics of abundance: what happens when it costs almost nothing to produce and stock one more item?
One surprising result is that non-monetary costs dominate the transaction. Most of you are familiar with monetary costs - pay $0.99 to download a song from iTunes (or $0.10 from AllofMp3). However, as the monetary costs fall, the most important impediments to a transaction are non-monetary: search costs and psychic costs.
Some of you may have studied the concept of "search cost" in college economics. It is the cost of finding the item you need - often measured in time and effort, rather than money. When sorting through the list of all music ever released, it would take you forever to find that piece of music you'd actually enjoy. Even at $1 a CD, you'd probably buy nothing, because you'd give up long before finding anything you'd like.
That's why Amazon provides a variety of tools to help reduce search costs: recommendations, samples, listmania, and many other tools. Though not perfect, Amazon now leads customers to buy items they've never heard of before. (I discovered Pepe and the Bottle Blondes on Amazon because I like Pink Martini).
It is not enough for a company to aggregate lots of small things. Reducing search costs by matching content to users is critical for Long Tail businesses.

 
Full article

The Power Of Us

Thu, 2005-09-15 14:45.
Mass collaboration on the Internet is shaking up business.
Full article

A small business for everyone?

Thu, 2005-09-15 14:33.
Mastercard and Warillow International have just published a research study on a new class of small business: the "Web-Driven Entrepreneur". The study estimates that there are 5 million of these businesses in the United States and they represent 25% of all small businesses.
...Two companies; Google and E-Bay have been fundamentally responsible for this new market by creating dynamic access points for these entrepreneurs. These companies provide small businesses with instant scalability and the chance to compete with their larger competitors, by giving them the opportunity to advertise and sell to massive markets.
... The idea that everyone can be an entrepreneur is a powerful one. For banks, web hosting companies, insurance companies, lawyers and a yet to be dermined class of middlemen, this could be huge. The secret will be to understand that this new world will not be about segmenting people into neat boxes, those who are small businesses and those who are not.

 
Full article

Small Businesses

Thu, 2005-09-15 13:08.
The 23.7 million U.S. small businesses are seen as prime candidates for the expansion of search marketing beyond the roughly 200,000 now using it. According to The Kelsey Group, the market for local search marketing could reach $2.5 billion in 2008. Jupiter Research, however, thinks it will grow much more slowly, anticipating $824 million in 2008.

The universal, self-publishing, loosely-coupled personal directory

Thu, 2005-09-15 11:37.

The original premise behind the initiative is that SMBs are at a great disadvantage when it comes to online search engines and directories because they don't have the expertise to ensure that the best information is provided to the search and directory services organizations (Google, Yahoo, etc.). In turn this means that potential customers are frustrated in attempts to locate businesses when they're in need of services. Trying to find, for example, the closest dry cleaner that does on-site leather cleaning can be a frustrating experience with today's Web search and directory tools.
But in reality, it can be just as time-consuming and frustrating to find big businesses also - especially bricks-and-mortar locations that are close to where you live or work. Here's just one example. Suppose you're away from home (at a trade show, for example) and you'd like to pick up a copy of a newspaper that provides daily IT news in its business section (for example, the "San Jose Mercury News" or the "Austin American-Statesman") - where would you go to find one? Neither the Merc nor the AAS Web sites will tell you where to buy the paper in Chicago or New York. The concierge at your hotel might know of someplace that sells papers but if only there were a listing you could find of retail businesses within a mile or so of your hotel that carried out-of-town newspapers. You could then quickly find out (by calling) which ones had the papers you were interested in and pay them a visit.
Here's another example. Same situation, you're out of town at a trade show. You want to pick up a quick lunch so you'd like to find a fast food place within a block or two of the show venue. You could visit mcdonalds.com, wendys.com, jackinthebox.com, and burgerking.com and enter the show venue's address to find the closest shop, write them all down and determine which is the shortest walk. Or you could go to an SMBmeta-enabled online directory and find all the fast-food places within two blocks of your current location - and probably see them all on a map.

 
Full article

The Sharing Economy

Thu, 2005-09-15 11:25.

Interview with Yale law professor Yochai Benkler

Q: How did you conceive the notion of peer production from such seemingly disparate activities?

A: I had been looking at commons-based behaviors in unlicensed radio spectrum and in intellectual property, and their important role in innovation. I was uncomfortable with the notion that this was purely a phenomenon of software or musicians. That doesn't explain Wikipedia. That doesn't really explain Slashdot [the peer-written and -reviewed tech news site]. That doesn't explain why Google was so phenomenally successful.

Q: What qualities do those things have in common?

A: [They show that] the economic role of social behavior is increasing. It used to be that if you said, "Here, this is interesting, why don't you read this?" it was primarily social. When you take the exact same behavior and plug it into Google's Page Rank algorithm, you actually get a discrete economic output that increases welfare in the economy overall -- even though you continue to have a certain social interaction there as well.

Q: Why is peer production happening now, and what technologies are enabling it?

A: With the steam engine, the archetype of the Industrial Revolution, we moved to industries where the physical capital was relatively concentrated. You had to have financial capital in order to enable effective collaboration between individuals.
What we're seeing now is cheap processors, which put computation on our desktops and in our laps, cheap storage, and ubiquitous communications. It's this combination of a low-cost personal computer and the Internet...that allows this aggregation of behavior. Things that would normally just dissipate in the air as social gestures come to have some persistence as economic products. This departs radically from everything we've seen since the Industrial Revolution.

Full interview

John Hagel on global process networks and localized modularization

Thu, 2005-09-15 11:07.
Companies that persist in viewing offshoring too narrowly will almost surely destroy significant economic value. The real winners will be those companies with a new perspective. They'll see that global success requires them to reassess the fundamentals of their business strategies and master a new set of management mechanisms that includes dynamic specialization, process-network orchestration, and productive friction. In this way, global success can not only be achieved, but also sustained.

 
Full article

Jane Jacobs: what makes a vital city?

Thu, 2005-09-15 11:01.

Jane Jacobs: Cities are the chief motors of economies. You can't talk about economies without talking, at least obliquely, about cities. Any human settlement is an economic equivalent to a local ecosystem. Just as ecology is the economy of nature. I've just been looking at the same thing from the opposite point of view�”the nature of economies.


Stewart Brand: Presumably that steps you right up to the question of global economy?


Jane Jacobs: Yes. The nature of economies comes to that. But people want these prescriptions. You can't prescribe for a global economy any more than you can get a handle on prescribing for a global ecosystem. Also, if you get too abstract about these things they become meaningless. You can't put everything in one ball of wax without it becoming abstract.

Full article

"Individuals are the engine that makes a healthy local economy grow."

Thu, 2005-09-15 00:09.
Quotings from "A Global Look to the Local" by Colin Hines:
A Focus on the Individual and Taking Control of the Economy

‘Individuals are the engine that makes a healthy local economy grow. It is individuals, working independently and collectively, that form the fabric of community life. It is the skills, abilities, and experience of these individuals that can be mobilized to develop a vibrant local economy.’
Historically, significant community development tends mostly to take place when people in a local community are committed to investing their time, skills and resources in the effort. In the US, John Kretzman and John McKnight summarised successful community-building initiatives in hundreds of neighbourhoods across America.
They found that a key was to ‘map’ their local human, institutional and resource assets and to combine and mobilise these strengths to build stronger, more self-reliant communities and hence local economies. This consists of drawing on individual’s skills, the local associations where people assemble to solve problems or share common interests, and the more formal institutions that are located in the community. These include private businesses and public institutions such as schools, libraries, hospitals and social service agencies.
This drawing on local capacity is the start of a process which reinvigorates local economic and physical assets. Local government officials have been most useful when their role has been to support local problem solvers and strengthen and connect other local assets. The most helpful approach has been one where local government representatives have asked how they can assist local citizens in their development efforts. (The more usual approach has been to ask how local citizens can participate in the government’s efforts.) At a national government level a primary role is to ensure that a substantial part of government expenditures provides direct economic benefits in terms of local jobs, contracts and purchases .

 
A Global Look to the Local - pdf