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May 25, 2009

How to Solve Local Search, Once And For All

This month’s column was going to be about Facebook. I had about half of it written before I stumbled upon something unexpected that changed my mind, and the content below.

I’ll start from the beginning. I’m in the early stages of gut renovating my apartment. I’m very handy, and can do most of the work myself, including rough carpentry, drywall, and finishing work. I can even do moderate plumbing and electric. The former I am actually quite comfortable with, the greatest risk being flooding my downstairs neighbors (they are very nice people, and I’m sure they’d understand).

Electric work carries considerably greater risks, like fire, and death. The latter is a pretty big risk. My last electrician offered advice on this topic, and told me that if you grab a live wire with one hand you’ll be fine, as the electricity will complete the circuit through your hand. It’s when you grab it with both hands that you’re in trouble, as then the electricity completes the circuit through your chest. I found his theory intriguing but controversial. Regardless, I can’t do either plumbing or electric work in the city of New York, as building codes prohibit it. So I’m in need of a good plumber and electrician.

Though they must exist, I know implicitly that there is no way to find a good plumber or electrician in New York City. It simply can’t be done. I can find a plumber, any plumber, no problem. My Google query for “New York City Plumbers,” for example, returned 14,700,000 results. (How is that even possible)? But finding a good plumber, one who will show up on time and provide an estimate with fewer than five digits, can’t be done.

This is where I thought I would start writing about Facebook, and the opportunity Facebook has to corner the local search and services market. No one out there is doing this well — not the major engines, not the IYPs, not even the new(er) social search and recommendation engines like Yelp.

I was wrong about that last part, and I’ll return to this in a moment. The problem with local search is not in getting accurate listings, that’s easy. The challenge is in getting relevant reviews on those listings.

In order to do this, you need two key ingredients. The first is scale, as in a massive, active user base willing to inform objective business listing with subjective opinions. The second is relevance, as in some way to ensure the reviews you are reading are not written by shills, angry ex-lovers, or crazy people.

Facebook can address both of these challenges: It has a massive user base, and it’s networked, which provides all kinds of useful ways to vet the trustworthiness of a reviewer’s opinion. If Facebook jumped into the local search space I believe they could corner the market. But I think Yelp has actually beaten them to it.

I was going to put Yelp in my original column as an also-ran. My original thoughts were that Yelp did not have the scale to capture this opportunity. It was in digging around on Yelp looking for examples to prove my point that I realized I’d misjudged it. Yelp does have scale. Though not nearly that of Facebook, Yelp has almost 8 million monthly unique users (according to comScore), and has doubled its user base over the last year.

Yelp can scale content, too. I found a variety of listings for New York City plumbers and electricians (not 14.7 million, but enough) with ratings that looked plausible (i.e. not all five stars). And Yelp has a pool of users that seems, well, not crazy. That is, they seem to make rationale critiques and rate services appropriately (unlike some travel review sites that shall remain nameless). You can vet the reviewers’ quality by clicking on their profile, and their community is even self-policing, calling people out when they seem like phonies, and knocking them back in line when they stray from the site’s main purpose – real reviews about real services.

It was at this point that I realized I had to rework my column and develop a new conclusion. So I’ve revised my point of view. Facebook should not build its own socially powered local search engine; it should just buy Yelp. This combination makes both companies better. It would instantly propel Facebook into the local search space with the backing of an active reviewer base and a proven service model. And Facebook’s scale would rocket Yelp from niche to mainstream, making a good service even better by combining reviewer opinions with vetting via the social graph.

So Yelp, if Facebook calls you up on Tuesday and makes you an offer, you know who sent them. But I’m not greedy. In fact, in return for encouraging a nine-figure liquidity event in your favor, all I would ask is that you pay my plumbing and electric bills. You may think you’re getting off easy, but you haven’t seen these estimates.

Matt Greitzer is vice president and global discipline lead of search marketing at Razorfish. (mediapost)