The New Local Web

December 27, 2010

2:17 pm

Sitting outside my apartment is a stack of yellow pages. They were delivered a few weeks ago but nobody has picked one up. As they collect dust I am reminded of how useful they use to be and how dominant those books were. Even more, it reminds me of some striking changes in the online marketplace today.

The nascent deal-of-the-day company, Groupon, made a big splash in the media when Google allegedly made a $6 billion bid for them. It was such a shockingly high sum that most were left in shock or disbelief. As the details continue to filter out it becomes apparent that this was a real deal and that Groupon – and the local group buy model itself –  is a growing power.

I think the key to understanding this power is through a recent piece by James Surowieki in the New Yorker and a response by John Battelle. While the core of their argument is about how game-changing Groupon is, I found one particular insight by John the most pressing. It is the opportunity Groupon is providing for small business to reach new customers.

Groupon, I believe, has the potential to be a new proxy – one that subsumes the platforms of both the Internet and the telephone, and adds multiple dimensions beyond them. – John Battelle

In doing so, they are creating a model that food locavores would love. Building local sales teams, promoting local business, and bringing together huge swaths of the local market of customers.

That is huge and Google knows it. Today if I want to find a local business I do a Google search and check out some reviews. It’s doable but not the easiest process in the world. It takes several searches and a Sherlock Holmes like investigation to tell if my $1,100 bill for the new water heater was fair.

Imagine if the Groupon (and Living Social, their largest competitor, based in DC) model could be applied to this problem. What would that look like? Or apply the technology of an emerging new company like DC-based Goodzer, who’s algorithms can find and compare prices at stores closest to you. Now we have something really interesting.

The bottom line is that the notion of “local” on the web is finally getting to be more useful and the future looks bright. There is always the risk that some of it may be just a fad that passes and some of the many “local” websites start to collect dust like the old phone books. Or, with Groupon’s billion dollar valuation and much discussed business model, it could be the beginning of the new local web.

Yellow Pages image by Frank Hebbert.

Guest author Steven Mandzik is a blogger at 1×57 and is robotchampion on Twitter.

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