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Understanding Google My Business & Local Search

When does the future happen

According to Comscore, roughly 11 million, of the current 200 million cell phone users, use their mobile phone to do local search. Of those 11 million, I believe that many are like me: “soft” users i.e. users that only use the service occasionally due to the limits of the hardware & software interfaces and the quality of the data. I am curious about how soon this local search aspect of the mobile market will become mainstream. A possible benchmark would be when it reaches 50% penetration i.e. 100 million users in the U.S.

There are many barriers to this level of adoption: limits of current phone technology, cost of the service and lack of perceived benefits by cell phone users.

We are now seeing the future of local search in overcoming the limits imposed by the current hardware & software. Google has staked out its mobile interface with Google Mobile Maps, Yahoo has its Yahoo2Go mobile application suite and Apple has created the perception of what a usable mobile device looks like. These three players may not be the winners in the cell market of 2006/2011 as it is dramatically different than the internet market of 1996/2001. However, these three will in many ways define what local search looks & acts like. These tools seem to answer the constraints on mass market adoption of mobile local search; the interface & hardware issues that have been barriers to widespread adoption.

When will we get there? And will it result in the increase in local searches that creates a truly vibrant mobile local advertising market?

According to JD Power, the average replacement cycle for a typical handset is 17.6 months, a slight decrease from 18 months in 2005 and the average reported handset purchase price in 2006 is $86, a decrease from $99 in 2004. (Thanks to Greg Sterling)

If one broadly accepts Moore’s law for guidance in the cell phone/mobile computing environment, then something like the iPhone will be in this price range in 50 to 60 months. That works out to 3 phone replacement cycles.

What isn’t easily predictable is the adoption rate of mobile internet access and at what price points internet access would be actively used by more than 50% of the market. Given the current “walled garden” approach of cell carriers this could take longer than 50 to 60 months it takes for the average cell phone to have all of the necessary characteristics for the “ideal” mobile local device. I hope not.

The other question is: what will the depth of penetration be once the capability is there i.e. how often will the average user actually do these types of searches. This speaks to question of local search inventory that Greg Sterling looks at here.

We all use some combination of the phone book, internet directory and directory assistance on a regular basis. We use mapping technology somewhat less. I at least, use the yellowpages and the yellowpage function of local search significantly less (even though I am immersed in it). I know where the pizza parlors are in my town, I don’t need Google or Yahoo to tell me.

We can assume that when the technology really works, the cost of access is low, and the functioning hardware is ubiquitous mobile internet use will dramatically increase. It appears to me that major percentage of the cell users will be there in 4 to 5 years. Whether internet yellow page search will be at levels to sustain all of the current players remains to be seen (It’s not where I would put my extra money).