- Excerpted from: Local Search Site Judy's Book To Shut Down at Search Engine Land (Oct. 24, 2007) by Greg Sterling
TechCrunch first reported (confirmed on CEO Andy Sack's blog) that local search site Judy's Book is shutting down and/or looking for a buyer. After struggling to monetize its traffic, the site shifted its business model to emphasize coupons and local deals. The firm had raised over $10 million in two investment rounds. This follows the sale of Judy's Book competitor InsiderPages to IAC's Citysearch and the failure of Backfence.com.
Some might be inclined see this latest closure of a local site as evidence that local's not working. The truth is that it's quite complicated with little room for error by startups. For online consumers, however, local is growing in importance. Just to put the discussion in larger context, here are some facts and stats about local that I quickly compiled:
Internet ad spending will reach $62 billion and surpass all other media by 2011; local online spending will reach $19.2 billion. Local search is projected to be $4.1 billion. Veronis Suhler Stevenson, August 2007
Local search is the second most popular online activity after e-mail
Piper Jaffray (2007)
60% of all local business searches now happen online (33% happen in print yellow pages) and 82% of the people using local search sites follow up their research with offline action
TMP Directional Marketing-comScore, August 2007
Out of the 130 million monthly unique users of Yahoo last year, 116 million of them came to Yahoo with local intent.
Hilary Schneider, Executive Vice President, Global Partnership Solutions, Yahoo!
The Internet will influence a trillion dollars in offline/local retail spending by 2010/11
JupiterResearch, Forrester Research, 2007Here's some additional recent data on consumer usage of the Internet to find local information from WebVisible and Nielsen. I've also got some additional discussion of the Judy's Book closure on my personal blog Screenwerk.
Mr. Sack, a seasoned tech founder, has been a pioneer in the area of energizing local commerce with online tools. Via his blog, he remained very open about the lessons he was learning while leading Judysbook.
The failure of Judybook to be profitable highlights the need for:
1. a model with a new approach to monetization - membership subscriptions and ad revenue fall short
2. achieving an early break-even - minimization of advertising expenses.