Google Charts New Territory

Google Inc. yesterday made available a test version of Google Maps, a new, online-mapping service to locate businesses and other points of interest across the U.S.

Previously, using Google to search for an address returned links at the top of the page that lead to the Yahoo Maps Web site and the MapQuest Web site. "Overall it's sort of a stickiness ploy," explains Kevin Lee, CEO of Did-it.com, a search-engine marketing firm. "This is really an attempt to keep people thinking Google for everything. They don't want to lead to another location where you end up doing your searches the next time."

A spokeswoman for Google declined to address whether Yahoo and MapQuest referrals would continue, saying only, "Google Maps is an experiment on Google Labs, and we're evaluating user feedback to further improve and enhance the product."

However the company decides to monetize its map technology, location-based search looks like a promising source of revenue for both search companies and businesses looking to bring in customers with locally targeted online ads. Dennis Lappos, who owns North Beach Pizza in San Francisco, says he's seeing more customers seeking information about his business online than through the phone book.

In February 2004, advertising market research firm The Kelsey Group and shopping search engine BizRate.com noted that local commercial searches represent a quarter of all searches being performed by online buyers. Google and Yahoo no doubt knew as much--the following month, each company introduced new local-search technology. Since then, each has continued to develop new local-search services.

"Yahoo is extremely excited about the local-search space," says Paul Levine, general manager of Yahoo Local. "It's a space we've been involved with for a decade and one we will continue to invest in."

Other online companies like Amazon.com appear to be interested in local commerce opportunities as well. In January, the company's A9.com Inc. subsidiary introduced A9.com Yellow Pages, featuring pictures of business locations that now accompany A9.com search results. A9.com drivers traversed tens of thousands of miles in specially equipped trucks to capture 20 million street stills in 10 major U.S. cities. Such an undertaking suggests considerable commitment to developing local search and related E-commerce.

On Monday, The Kelsey Group predicted that digital-directional advertising--ads delivered to potential buyers when they are in the process of making a purchase decision--for local marketplaces will grow to $10.9 billion globally and $5.1 billion in the U.S. by 2009. Local search, estimated to reach $3.4 billion stateside, will comprise the bulk of the projected revenue, with the remainder going to Internet Yellow Pages ($1.3 billion) and wireless platforms ($400 million). Neal Polachek, senior VP of The Kelsey Group, said in a statement that his firm expects strong entries into the market soon from AOL, Ask Jeeves, Fast, Microsoft, and others.

"Location-based search on the Internet has been one of the most steady and underrated applications," says Gartner analyst Allen Weiner. "You can't see anybody walk around with a map anymore; they're holding two pages that have directions on them. So what search engines have done is use that [location-based search] as a platform for other services. It's become a really good springboard for a lot of E-commerce applications."