He talked to Ad Age Digital about how Yahoo does local search differently.
Ad Age: Yahoo's version of local search is really social search as well. Tell me about it.
Frazier Miller: If you rewind the clock a few years ago, we spend all our time thinking about local merchants and users trying to find info on a local basis, like you had in the newspaper and Yellow Pages models. These were a monologue as opposed to a dialogue. ... There's more effective ways for users and merchants to have a dialogue. For users, we've had things like ratings and reviews. We just hit the 2 million number in terms of ratings and reviews.
But I very much feel like local is expanding from a look-up use case or the old Yellow Pages approach to a browse-type use case, where you want to bring in user-generated content elements to make a decision. ... It's more of a research and comparison shopping case. Moving forward there's a lot more around discovery and exploration. You see it in terms of Flickr, YouTube, users going out there to explore and discover and be inspired. We're look at our acquisition of Upcoming and how do events come to play in this. We are holistically helping users figure out what they want to do in planning their local lives.
Ad Age: You mentioned user-generated content. Can you give some examples?
Mr. Miller: There's rich info that users are able to provide on the merchants. They can post photos of the business or the service -- photos of what the inside of the cafe looks like, for example. One recent example is a carpenter or cabinet maker -- someone had taken a picture of the cabinet maker's work.
Tagging is a powerful phenomenon that allows users to say this business is romantic, this coffee shop has WiFi. It allows users to access and organize internet data in their own way and makes an easy index to recall later but it also gives us a really powerful way to search across really generic listings that we can provide to other users.
Ad Age: So how does this all make money for you?
Mr. Miller: These small to medium businesses are very clear what they're trying to get: additional leads or business. There's a lot of opportunity in what the internet and user-generated content can bring in terms of targeting audiences and getting more in touch with customer base. To the merchants' chagrin, their reputation is being formed online without them being in touch with it. The real opportunity is for them to see their ratings and reviews, see how are they doing in the minds of their users and figure out how can they channel and form the reputation that's formed online. We give them tools to keep in touch with users. They can be e-mailed when rating/review gets posted by customer. They can subscribe to a service that allows users to make reservations through Open Table, who we partner with.
Ad Age: Does charging business for services like those compose most of the revenue?
Mr. Miller: The lion's share of the pot of gold is the search model done on the local basis. Merchants can bid on a featured placement like you'd imagine in Yahoo Search. They can bid by category and location, except you don't bid for it, it's a subscription fee, which is a lot easier for merchants to understand. They pay a certain price depending on how densely populated that category and population is. [For users] often the ads are just as helpful as the algorithmic results. And the merchant is increasing their ad effectiveness with that placement.
Ad Age: Who do you view as your biggest competition?
Mr. Miller: Our strategy of focusing on user is certainly a big difference from Google, which takes a technical approach to these areas. We feel good about our leadership position. But there are also vertically specific players: neat services that really focus on one particular area. We look at what features are coming out from the smaller, more vertical players. Insiderpages, Judy's Book, Angies' List. These smaller, more vertical players are generally trying to tackle more specific demos. Insiderpages is trying to reach homeowners, Angie's List is mostly focused on contractors.