Online Business Directory Changes Path

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Citysearch, the online business directory, is in search of its own comeback.

A decade ago, the West Hollywood-based company was the undisputed go-to Web site for Internet users in quest of a dry cleaner, a bar or a restaurant. It was one of the first companies to post local business directories on the Web and it reaped the advertising dollars that resulted.

But it? recently been losing ground to San Francisco-based Yelp Inc. The difference? Citysearch mostly relied on its staff to write reviews of businesses, while Yelp lets anyone post comments.

Now, Citysearch is fighting back. It? rolled out a Web site design that boosts the profile of its user-generated reviews. It? also formed partnerships with online powerhouses such as MySpace.com and Facebook Inc., which will be adding Citysearch technology to their sites.

And it? bought competing businesses and rolled out consumer blogs targeting specific groups that might not have previously gone to the site. The goal is to boost Citysearch? profile at a crucial time in the evolution of local search.

?ltimately I want to be the most distributed network on the Web,?said Jay Herratti, chief executive of the West Hollywood-based company.

Herratti points to the deal with Beverly Hills-based MySpace, which led to the creation of its new MySpace Local service, as a big step toward that goal. MySpace Local, which debuted in March, allows users of the social networking site to review and rate bars, restaurants and clubs. The technology and database of 15 million businesses in the United States come from Citysearch.

For Herratti, a lithe, cheerful man with dark curly hair who joined Citysearch two years ago, that? the direction the company should pursue.

? want to be behind a lot of what? going on in the Web, but it doesn? have to all happen within my walls,?he said.

The looming issue is whether it? too late to bring Citysearch back to market dominance.

The company is still the market leader in online business search but might not be for long. Over the past year, Yelp has seen its monthly ?nique?visitor count climb 74 percent to 24 million in April 2009, according to Compete.com, a Web traffic analysis site. (A ?nique?visitor is a person who views the site, as opposed to the number of views the site registers.)

In that same period Citysearch? traffic has tumbled 34 percent, from 37.6 million to 24.8 million unique visitors. Citysearch said its average monthly unique user count is more than 30 million.

A spokeswoman for Yelp said the company is focused on growing its operations, especially its presence on mobile devices. She declined to directly address Citysearch? recent moves.

Citysearch? decline in traffic comes as the value of local Internet search is growing. Research firm Forrester Inc. projects the local search market will be worth $7.3 billion next year and $10.2 billion by 2013.

?hat? happening to Citysearch happens all the time on the Internet,?said Debra Aho Williamson, a senior analyst with research firm Emarketer Inc. ?aving the first-mover advantage doesn? necessarily make you the winner long term.?


?igher Mission?/b>

Citysearch? West Hollywood headquarters are off Sunset Boulevard in a steel and glass building designed by Frank Gehry. Its offices are bright and spacious, with a coffee bar and an employee break room equipped with a Wii, a putting green, yoga balls and a stash of red licorice.

?t? our mandatory dot-com room,?Herratti noted.

Herratti was previously an executive at Citysearch? parent company, InterActiveCorp., a New York Internet conglomerate. He took charge of Citysearch because he saw its potential, while noting the company hadn? evolved much for the past five years. Plus, he was fascinated by Citysearch? business.

?t feels for me like some higher mission,?he said. ?his is helping people have fun on the weekend and get errands done during the week, and I? helping small businesses flourish.?p>One of his innovations was rolling out six specialty blogs, on topics such as vegan food or women? shoes, which serve niche consumers and draw them into the Citysearch business directories. Herratti said he? like to have as many as 10 blogs.

He? also acquired companies to expand Citysearch? reach. For instance, in response to Yelp? popularity on the iPhone, Citysearch bought UrbanSpoon.com, a Seattle-based restaurant review site that? also a success on the iPhone.

But the main feature of the turnaround effort is the redesign of the Citysearch site, with user reviews now displayed more prominently. Also, the directories are broken down into more specific neighborhoods: For example, someone could look for a restaurant in the Ocean Park area of Santa Monica. Citysearch has more than 75,000 such neighborhoods in its database of 150 cities.

Citysearch listings for businesses that advertise with the site are different from those for businesses that don?. For example, a listing for a restaurant that is not an advertiser on Citysearch will show up along with advertisements for other similar restaurants. A listing for a restaurant that is an advertiser will show up without competing ads. Advertisers also get a dedicated space on their listing where they can respond to user reviews, provide profile information and even post a video tour.

Those features have kept Citysearch? revenue relatively healthy, Herratti said. He estimated ads from local businesses, which account for 90 percent of the company? revenue, are slightly up this year.

Display ads, which make up the remaining 10 percent of revenue, are down 50 percent, a decline Herratti attributed to the economy.

Advertisers are likely to stick with Citysearch at least for the time being because they are familiar with its brand, said Sarah Rotman Epps, a Forrester analyst.

?t? relatively complicated and difficult to buy online advertising, and businesses will do whatever is easiest for them,?she said.


Yelp converts

But eventually, advertisers will follow the traffic. And if the traffic is still leaving Citysearch, they will go to some other competitor.

One advantage Yelp has over Citysearch is trendiness. Many Internet users value what? current and hip. That? partly why Yelp, with its user-generated content, has become such a hit.

?itysearch may still have the perception that it? a like a magazine, that it? a top-down, editorially driven company,?said Williamson of Emarketer. ?hich is not necessarily true but it? what people think.?p>Williamson admits she? one of the Yelp converts. Years ago she relied on Citysearch to find restaurants and bars near her Seattle home. But lately, she? switched to its rival.

??e gotten some great finds from Yelp,?she said. ?nd I used to get those from Citysearch.?enews_Column=0

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