Google, Overture Gird for Local-Search Battle

While Overture Services and Google continue the war for an edge in the paid search market, local search is shaping up to be the latest battleground.

On Thursday, Google rolled out a demo of its local search service, which allows users to segment their searches by location, including address or zip code. For example, a search for “plumber” in Atlanta, Ga., returns a map with ten results for local plumbers. For now, the local search functionality is confined to Google Labs.

Google is not alone with a local search engine in the lab. In August, Overture began testing its own local search product on AltaVista and released a demo of the service. (The demo was recently ended.) Overture plans to release a local search service by the end of the year.

Google said the “experiment,” called Google Search by Location, works by taking “hints” from the pages indicating their geographic location. Google might, for example, look at addresses on pages, or place names that are part of a page’s text.

“Google’s goal is to connect users to the information they need, whether it’s half-way around the world or just around the block,” a company representative said via email.

The company declined to elaborate on its local-search plans. However, such a system would allow it match up local advertisers with local consumers by selling keywords tied to specific locations, opening up huge amounts of search inventory in the process. An antiques dealer in Des Moines, Iowa, for example, would have little chance of bidding enough for a keyword on a national level but could do so locally and presumably get a more qualified lead.

Meanwhile, Overture steams ahead with its own local search product, which it plans to release in the next few months. Already, about 9 percent of AltaVista users have access to a test version that Overture is operating with a select group of advertisers. The company is using the test to refine the product before launch, according to John Ellis, Overture’s senior director of market strategy for local search.

“There’s a decent amount of explicitly local search,” he said. “We think the real opportunity here is in some of the things that people might be looking for that would be a dual opportunity” between local and national.

Ellis said Google and Overture approached the problem from similar directions, but that Overture would sell local search as a completely separate product, beginning with its existing 100,000 advertisers. He said its sales team has already gotten good interest from large advertisers looking to connect with consumers closer to home.

In addition to adding local search deeply into Yahoo properties, Ellis sees a number of opportunities for distribution, such as local news sites. He also pointed to city guides as ideal potential outlets. The largest of these, CitySearch, was a pioneer in local search by releasing its own paid listings product in March.

“CitySearch has a very nice site that’s targeted at some specific categories, like arts and nightlife,” Ellis said. “We’ve had a lot of success across a lot of verticals out there.”

While Google’s local search efforts appear somewhat behind Overture’s, the company has made a number of local-flavored distribution deals. The company provides paid listings on online yellow pages Switchboard, MapQuest and Weather.com. All deals pinpoint a user’s location to determine the most relevant paid listings. In Weather.com’s case, Google uses its AdSense content-based keyword product.

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