Article in WSJ today about Local Reviews

Local Search Draw Users' Interest

By JESSICA E. VASCELLARO
March 1, 2007; Page B4

When Dave Kim moved to Sunnyvale, Calif., the 32-year-old manager for a software company was looking for a new place to get a haircut. He didn't like the results he got at several barber shops he wandered into and a handful of large online search sites didn't offer any useful suggestions.

Then he stumbled on Yelp.com, a local search site that ranks its results based on feedback from its users. A search for "haircut" in Sunnyvale pulled up some 300 results. Leaping out at him was JulieQ's Hair and Nails, whose reviewers raved about a free scalp massage included with a haircut.

"When there are some 30 reviews and no one says a bad thing, that tells you something," says Mr. Kim, who has been stopping by at JulieQ's for a $15 cut every few weeks ever since.

Online search services that can pull up a list of florists by ZIP code or bakeries in a particular area have proliferated in recent years. But now some start-ups are taking local searches one step further, by basing their results on recommendations and reviews from local users. Taking cues from social-networking sites like News Corp.'s MySpace or photo-sharing sites like Yahoo Inc.'s Flickr, they are addressing the problem by soliciting a wide array of information from their users.

A number of established search directories have also begun launching new features that make it easy for consumers to swap advice on local topics like where to get a nearby oil change or find the tastiest burrito. These range from features that allow anyone to post photos and comments about a business to reviewer profile pages, which users can fill with details about their interests and use to pose questions directly to other local experts on the site.

Aware of the ultralocal trend, local search veteran Citysearch, a division of IAC/InterActiveCorp, today is announcing it has agreed to acquire Insider Pages, a local search start-up, for an undisclosed amount. Insider Pages's roughly 600,000 user reviews will be folded into the Citysearch database.

Insider Pages takes a different approach to local search through features like allowing users to pose questions -- "Where can I find the best ice cream in San Francisco?," for instance -- directly to other members on the site.

Yahoo's Yahoo Local is steering its users towards user-generated content as well. The site taps nearly three million user reviews to find the most relevant results for queries on good banks or real-estate brokers and the like. Late last year, it added a "My Local" feature that allows users to save and share reviews, create collections of their favorite places and receive recommendations.

Users also can post their photos of a particular merchant on the business's official profile page. AT&T Inc.'s YellowPages.com recently began allowing users to rate and review businesses, launching the feature on YellowPages.com, which has generated some 200,000 reviews, nationwide in February.

Several start-ups are also turning to their users to get the pulse on popular places while demystifying the review process by encouraging reviewers to create profile pages, where other users can post feedback about the reviews. TrueLocal Inc., which has a database of nearly 14 million U.S. businesses, soon will allow users to create their own profiles in order to share detailed factual information about the businesses (years in business or seating capacity, for example) in their neighborhoods with other users.

San Francisco-based Yelp Inc. ranks its local search results according to how users have rated the business. While Yelp has reviews nationwide, the bulk are from major metropolitan areas.

Yelp co-founder Jeremy Stoppelman says the site aims to solve the difficult problem in local search: how to search the information in people's heads. "That kind of information doesn't exist anywhere," he says. "You have to find ways to get people to talk about that information."

To date local search services have been wary of encouraging users to weigh in, believing that the hodgepodge of opinions would be more distracting than useful. Depending on reviewers' comments also risks alienating merchants, many of whom still have mixed feelings about the exposure.

"Anyone can get behind any computer under any alias and vote that your place is good or bad," says Kevin Suto, general manager of Zachary's Chicago Pizza Inc. "Some of this stuff should be treated with a grain of salt."

Moreover, businesses have yet to make much money around community-driven local search services. While U.S. local search advertising revenues are forecast to grow to $6.2 billion in 2010 from $1 billion in 2005, according to the Kelsey Group, some local search start-ups have found that selling advertisements isn't enough.

"Reviews don't make a business," says Andy Sack, co-founder and chief executive of Judy's Book Inc., a local review site founded in 2004. The site soon will relaunch with a new focus directing users to local and national shopping deals in their area, in order to generate revenue through lead-generation fees from retailers.

But as user-generated content and reviews have taken off across the Web, existing local search services believe they can't afford to miss out on user ratings, reviews and photos, occasionally even providing gift certificates for submissions. To win over merchants, they are encouraging businesses to provide their own writeups and to update their listing information with hard-to-come-by details such as their hours of operation or which credit cards they accept.

The growing appeal of unfiltered user reviews is what attracted Citysearch to Insider Pages, a start-up launched in 2004. For years, Citysearch, which IAC bought in 1998, compiled what's now some 13.5 merchant million listings with a staff of more that 100 editors and freelancers who also often provide reviews. That editorial approach, coupled with extensive city guides, helped the site grow into a leading destination for local business information on the Web.

But as of late, the service has been struggling as competition increases. U.S. traffic to the site declined to 12.9 million unique monthly visitors in January, down from 16.7 million in January 2006, according to comScore Networks Inc.

Now, IAC is trying to put Citysearch back on track with an array of new features. The site is helping small businesses to post their own videos on the site and expects to launch with several hundred short clips by May.

And it's looking to Insider Pages, which has some two million unique monthly U.S. visitors, according to comScore, to help it quickly boost its audience and authority by adding more voices from real people. "Users submitting reviews can cover a lot more content than any editorial team," says Peter Horan, chief executive of IAC Media & Advertising.

Write to Jessica E. Vascellaro at jessica.vascellaro@wsj.com