Who Will Own Local Data? Search Engines, Yellow Pages, Aggegators Or Social Media?

Increased demand for local data, and with technologists who recognize a need for an authoritative local information database, suggest that we’ll soon see a landgrab for ownership of local data. A Techcrunch article in April articulated the Zeitgeist surrounding a local “database of places”, exciting a lot of talk around the subject. As many players are moving to generate central databases of places, who stands to dominate: Search engines, yellow pages, aggregators, social media, or some other player?

Let’s be clear as we discuss this: I’m primarily exploring this from the angle of business listing data, which is admittedly a subset of all location information (which could include all geocoordinates, residential addresses, neighborhoods, locations of landmarks and more). However, for most developers, publishers and consumers, the main interest for local data is in terms of business location and contact information—the more monetizable data that powers development behind most local information sources.

A few years back, I issued a challenge to the industry to come together to form an “Open Local Profile Format“—essentially a common protocol by which local businesses could submit their information to yellow pages, search engines and other publishers. While that concept was primarily a data format, the ultimate goal was to provide some central place to submit the data, similar to how websites may submit their URLs to search engines via Sitemaps.

While I didn’t manage to inspire immediate adoption of an open format back then, a number of executives from various local info providers did express cautious support of the concept.

Others have previously recognized that if one could do for local what was done with Wikipedia, the results would be a disruptive game-changer. Here’s what Greg Sterling said in 2006 in regards to the hypothetical question of whether a “Wikipedia of Yellow Pages” could be successful:

“…until recently Wikipedia seemed a long shot and almost preposterous notion itself. And if the directory follows in the footsteps of Wikipedia it will become a highly successful (and visible) way for local businesses to be found. It could also be radically disruptive if successful.”

Greg notes more recently that one such concept, Yellowikis, failed, although Brownbook and Bizwiki have continued with similar ideas. I think Yellowikis failed due to lack of sufficient content to attract consumer use, along with a failure to properly structure data in a way that other developers could use—areas where Brownbook has been more successful.

Fast-forward to 2010 and the idea appears to be gaining a groundswell of support from more key people—and some organizations are already working to develop a solution.

Wikipedia itself threatens to become the central database of places, with its increasingly-structured addition of addresses and geocoordinates along with absorption of its local content into Google Maps and Facebook.

However, the guidelines and processes around Wikipedia’s content sharply limit it from becoming the go-to place for local business information. Most businesses don’t qualify to be in Wikipedia due to its notability requirements, not to mention its anti-commercial, insufficiently structured nature—and it’s too loose about allowing everyone to update article content.

Business data has extra complexities that may resist a true “open information” approach that worked with Wikipedia. Data quality is a key necessity for directories. There need to be formal processes to handle deletions of defunct businesses, spam-resistant additions of new businesses and updates mostly need to come from authorized business reps. Some structure has to be imposed in terms of the canonicalization of place names, acceptance of alternate names and normalization of naming conventions for convenience/consistency or else the result is some level of “GeoBabel”, as Gary Gale describes.

Google Maps has experimented with Wiki-style notions, too, what with enabling user edits to business info. However, Google ultimately discovered what local directory sites knew all along, which was that allowing anybody to update listings results in serious problems. They’ve since hired editorial review staff to proof suggested changes, and Mike Blumenthal declared that it “…marks the end of an experiment in the ‘wiki nature of Maps.'”

However, the concept of some sort of open, centralized database for business listings lives on, particularly among influential Silicon Valley technologists and various major companies. The deployment of local offerings of one type or another by fast-growing social media services such as Facebook and Twitter seems to have kicked up interest another notch. Tyler Bell, writing for O’Reilly Radar, states that “likes” and check-ins are driving a semantic necessity to open and aggregate local data. Twitter even acquired Mixer Labs to position themselves to rapidly own local technology, and their GeoAPI resembles the open-local-data concept.

The all-but-forgotten heavyweights in the location wars are the aggregators. For those who don’t know, yellow pages companies, business directory sites and even search engines all have traditionally gotten their listings data from companies which specialize in gathering the info from a variety of sources, such as from feeds from telephone companies, scanning printed yellow pages books, and other sources. Some of the top aggregators include: Acxiom, InfoUSA, Universal Business Listing (UBL), and Localeze. Heretofore, most of these aggregators have operated on a more classic business model, charging companies to use their data. As the local database incumbents, they can’t be counted out of the equation yet.

The data aggregators are in virtually the best position to become the definitive central database of places. Each of them has worked up significant amounts of data in terms of local business locations, they’ve already got the sophisticated processes in place for insuring data quality and they’re already feeding into many of the major business info publishers for websites and mobile apps. Which of them could be the ultimate contender?

To my eye, there could be some chance of collapse among the aggregators, similar to how there could be upcoming mergers in the yellow pages. One major aggregator, Amacai, was already absorbed into TARGUSinfo, the company which holds Localeze. Localeze has since made great strides in competing with the other aggregators, and recently accomplished a few coups in signing agreements to be the business data provider for Facebook and Twitter. And, there’ve been some rumors that these exclusive deals were signed with aggressively generous terms to help position Localeze as a highly-desirable acquisition target.

Each of the aggregators could be attractive as acquisition targets, however. Years prior to financial softness, I recall internal discussions within Verizon Superpages about possibly acquiring an aggregator as a strategic chess-piece. Even now a major yellow pages company such as AT&T might mull over such a proposition. And, it’s not out of the question to imagine that Google or Microsoft might like to purchase such a company, or even Facebook.

One aggregator which is closer in overall temperament and business model to the concept of an open database may be UBL. They’ve long related that they formed UBL after being inspired by my article calling for the Open Local Profile Format, and they provide their listings data out for free to yellow pages, directories and search engines. They charge businesses a tiered fee structure for submitting their listings, but the fees are generally modest. They allow their data to be used by publishers and developers via an API, but they don’t qualify as truly “open”, under the Open Knowledge Definition.

(Disclosure: I serve on the Board of Advisors for Name Dynamics, operator of Universal Business Listing.)

Still, UBL seems to be coming closer, sooner, than the other big aggregators who charge big fees for the use of their databases.

In the case of Localeze, I’ve noted before that they charge at both ends of the equation, levying fees to the small businesses and to publishers alike—virtually the antithesis of an open database. Very nearly a conflict-of-interest in the sense that if you charge SMBs you can’t get maximum data for publishers, and if you charge publishers you can’t maximize distribution for your advertisers. Either way, the proprietary data with fees at both ends is not a strategically good position to be in if one big player out there abruptly starts providing an open database of places for free.

However, realistically, the best possible solution for an “open database of places” is going to have to fall short of the Open Knowledge Definition ideals for a few reasons. As I noted earlier about Wikipedia, business listing data has some unique aspects that run counter to full openness. Allowing any/everyone to update primary factual information about a business won’t work, as Google discovered. Only the authorized reps of a business should be allowed to update most of that info, which means some level of validation is necessary. It’s easy to assemble a database full of businesses, but there should be some processes to delete listings after companies close—and involves significant infrastructure with associated costs to maintain.

I think the most-likely scenario is for a hybrid to emerge, propelled in part by the sense that someone is going to eventually release a service which will become a defacto standard. One or more of the really big players in the local space may serve as a patron for the concept. It’s possible that multiple yellow pages companies could band together, rather like how the airlines banded together to create Orbitz. Or, one particularly big player could altruistically deploy the database unilaterally—such as an aggregator that sees the fast-arriving future of an open local data revolution.