Judy's Book To Shut Down

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, 2007

Here'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.

My Take

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.

Local search gets profitable for local business

Entry for July 27, 2007

Now local search gets profitable for local business. Announcing Local Leap from Vertical Leap

Release Date: 26 July 2007

Vertical Leap, pioneer of managed search engine marketing, has launched Local Leap, a new search optimisation service specifically for businesses whose market is local, rather than global.

Local Leap gives high street shops, professionals such as solicitors, accountants plus service providers including plumbers, specialists in topiary through to catering the opportunity to realistically compete in the main search engines and to see a profitable return from their website due to increased sales leads.

My Take


This effort aims to place participating local vendors at the top of the search results heap.

If all SEO experts are attempting to win the same limited real estate, then any positive results they achieve can only be temporary. The next local competitor who comes along using the same tool - or a similar one - will knock them off.

Missing elements - social search; viral; economic incentive; differentiation based on consumer experience

Tags: socialsearch, localsearch, wordofmouth, angieslist, judysbook, yellowpages

Friday July 27, 2007 - 07:23am (EDT)

My Take: What is Judy's Book Missing?

My Take: Judy's Book has attracted more venture capital - $8 million more .

But I just don't get it.

What competitive advantage is it counting on in its battle against Yahoo! Local?

I've been a Yahoo fan and user for 10 years. My Yahoo! Yellow Pages stares at me from my tool bar. My Yahoo address book allows me to connect to my friends. Yahoo has an active portal with piles of content.

So ...

- What will drive traffic to this upstart?

- What would compel users to submit reviews (other than free coffee)?

- What will create viral interest and growth?

- How does it connect with any of the natural factors that have been spurring word-of-mouth since the dawn of commerce? Quality products or services? Great customer service? Creative advertising?

- Are they adding proprietary functionality that makes it an attractive acquisition?

- And the really big question - where are these easy VC guys when you need them?

I like your spunk, Judy. But help me to see your unique value.

Good luck.

Friday January 6, 2006 - 03:03pm (EST)