Does IYP market share matter?

Does the IYP/online business directory market share matter or has the battle already been decided? Has this category been relegated to just another niche search area where money can be made but market dominance is not possible?

A recent press release noted that www.local.com, ranked fifth in the Business Directories online industry category. This was based on the Hitwise analysis of market share of U.S. visits received at the internet yp sites in Q1, 2008. Greg Sterling at Screenwerks noted the other sites in the category as ranked by Hitwise in their results:

Business and Finance – Business Directories
1 maps.google.com
2 www.yellowpages.com
3 www.whitepages.com
4 local.yahoo.com
5 www.local.com
6 www.infospace.com
7 yellowpages.superpages.com
8 virtualearth.msn.com
9 www.switchboard.com
10 www.yellowbook.com

I have small quibbles with these IYP comparisons. Maps.google.com has a tendency to be over counted due to its integrated mapping function and Yahoo tends to be undercounted due to the fact that it splits its local, yp and maps products into different urls. A resolution to this methodology issue is likely to move Yahoo local closer to first in this list but these are small details.

I see a much bigger problem in that it appears to me the battle for local business listings has already been won and not by the properties on the Hitwise list. These comparisons are simply measuring who has 1st, 2nd and perhaps third of the remaining, ever declining market share left to them by market leaders Google’s and Yahoo’s universal search results.

Here is my math….

The Google Main search results generate roughly 65 times the pageviews of Google Maps. If the Local Onebox is shown on 10% of all queries then Google’s market share in the IYP sector would be 650% greater than the number one spot on the list, Google Maps. If the calculation were based on visits as opposed to page view it would show Google’s share as less but still dominant.

If you factor in Yahoo’s 15% market share and a similar 10% display rate, their blended results for business directory results on their main search results would be 100% greater than the number one spot in the list. Thus 60% or more of business directory queries may be handled by the blended results of Google and Yahoo main search pages and their local internet products. That qualifies as market dominance in my book.

While these numbers are very rough estimates I think that my logic is basically sound and if anything the numbers are conservative. The actual number of queries which show the Local Onebox could be much higher, as high as 25%. This calculation even ignores Google Earth, the Plus Box, GOOG-411, GoogSMS and adwords serving as business directory proxies.

While the battle for business directory dominance on the desktop may have been decided, the battle is being fought again in the mobile arena. However even there Google and Yahoo apparently already have the basics of dominance at hand and seem to have an insurmountable market share lead in search that will define the outcome. The Nielson study noted that in the mobile market, “29 percent of Google users and 24 percent of Yahoo users were looking for local listings”.

Perhaps I am missing something here. What do you think?

Please consider leaving a comment as your input will help me (& everyone else) better understand and learn about local.
Does IYP market share matter? by

8 thoughts on “Does IYP market share matter?”

  1. I thoroughly agree, Mike. The volume of traffic on sites is enormously skewed toward organic search results in the Search engines and of that predominately Google. The difference is astonishing.

    Big advertising campaigns in any of the alternatives, simply result in spending money with few results.

  2. Makes sense to me, Mike. I guess it’s the same phenomenon we all started to understand years ago with organic search. It might be good to be listed in a niche directory, but it sure wasn’t going to get you as far as ranking well in Google.

    Neat post!
    Miriam

  3. Right on the money Mike. And you didn’t even factor in that the non-SEs on the list already get most of their traffic from G & Y. If you want to get really black & white about the whole thing, it’s in G’s interests to drive traffic to the IYPs so that they can in turn bring the SMBs online. Over time the SEs will gradually choke off the traffic (can you say 10-pack?) so that the IYPs have to increase their SE ad spends and expose the SE brands/services to the SMBs. It will take a long time for this to happen but it sure seems like this is the path we are on.

    The YPs can still thrive in this situation by moving farther downstream in their service offerings to the SMBs than G or Y will.

  4. Hi Andrew

    Thanks for the perspective…I hadn’t thought the dynamics through to the contradiction between Google and the YP’s but what you note makes lots of sense.

    Mike

  5. I agree. I think that particularly when it comes to a “directory” the battle has been won. But, when it comes to serving niches and communities there is still a great battle to be had. Yelp, is a great service and creates a community atmosphere which Google and Yahoo do not, when it comes to local business. This is not to say that Google and Yahoo couldn’y over whelm this space by adding in similar features to Yelp.

  6. Hi Tim

    I agree wholeheartedly. Google is good at the “recovery” side of the directory equation but lacks in the “discovery” side. There is a lot that can be added to make local really local. Whenever I travel Yelp is my first stop for food advice, particularly in SF.

    I don’t know if Google could do what Yelp does but they can suck so much air out the room that Yelp or similar offerings might not survive.

    Mike

  7. Andrew’s comments are very insightful and reflect a strategy that could be brutally effective, incredibly cost effective, and sharp/sneaky to boot.

    Have the entities such as the IYP’s with large and expensive salesforces bring in the small businesses…..and then have Google negate the importance of that by both dominating the serps with 10 pacs and possible different algo’s that push competitive sites to the top of organic rankings.

    Ugh….I don’t think I want to be an IYP.

    Thanks for the insights, Andrew.

    Dave

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