My Own Pirate Radio

Backfence.com, a “social media” site that billed itself as “Do it yourself local news”, is shutting down operations. Mark Potts, one of the co-founders, posted his learnings a few days ago. Very interesting, particularly on the business model challenges.

One bit in particular from Potts struck me: “Partner with a media company or some other distribution source. Because of the critical need to market to and engage the community, it’s better to piggyback on a print or broadcast partner’s existing community relationships and marketing power.”

Backfence actually didn’t partner in this way, and I find it strange that Potts would recommend this as a strategy. Relying on old media to jumpstart an online community seems wrongheaded to me. Look at Toronto Star’s OurFaves, for example, launched May 2, 2007. It’s a promising notion — “amplify local opinion on what’s great in the city” — but after playing with it briefly I find it empty and unappealing. Part of that is the look and feel: it’s slick, polished… surely passed muster with Star execs, but too stark and corporate to attract the customers they’re seeking. More importantly though, the content seems to come from a very small number of people (forgivable for a while; you’ve gotta start somewhere), appears to be editorialized, and focuses on city-wide popularity as the key vector for discovery. Add that all up and it’s hard to trust as a source for recommendations. They missed the mark.

Partnering with an already-trusted social network like Facebook — the way iLike.com did — is a much better recipe for success.

P.S. I found Potts’ post through Greg Sterling, who often writes about local search and related trends. This morning Sterling put up a post on local and social media. It includes a long-yet-not-exhaustive list of sites in this space. Worth reading.

Lots happening in search recently, especially in the local search segment.

• On Friday Google announced it acquired DoubleClick for $3.1B, beating out Yahoo!, Time Warner (AOL’s owner), and Microsoft in the bidding. This gives Google ability to place display ads (graphical ads) on sites, in addition to their existing text ads. In an ironic twist, both Microsoft Corp. and AT&T Inc. called for antitrust regulators to investigate the deal.
• Two days ago Google struck a deal with Clear Channel Communications to sell airtime on their 675 radio stations to Google’s advertisers. Clear Channel is America’s largest radio broadcaster.
• Also this week, Yahoo! expanded its agreement with a consortium of newspaper publishers to run their content on Yahoo!’s websites, and to place advertisements on the sites of the newspapers.
• In late March the News Corporation and NBC Universal struck a video content distribution deal with AOL, Yaho, MSN and MySpace. Some are casting this as an ill-fated effort to compete with YouTube (I agree), while the dealmakers claim it is more about creating a shared network of content and ads.

It’s neat seeing all the old media companies come around, albeit belatedly, to doing deals with the new media companies. It’s nice for the old media companies; they get a handy cash infusion, some positive PR, and new ad inventory to sell. But this is just a short-term fix. The new media companies get the better part of this deal, because:

1. They get to tap into the local sales force of the old media companies. This reduces a huge barrier to success in local search: the cost of creating and running a local advertising sales force, a.k.a. “feet on the street”.
2. They get to demonstrate their reach, innovation, and cost efficiencies to a new advertising base. (Google and Yahoo! are surely saying nice things about not trying to steal away advertisers from their new radio, television and newspaper publishing partners, but you’ve got to be skeptical about that in the medium to long term. Ad dollars are shifting online, fast. These deals only grease the skids.)

For an overview of US local search market trends, see LennAnn Prescott’s Hitwise blog post.

BusinessWeek also has more commentary on Google’s recent moves in the ad business.