Down on local search

Nate Elliot, a Jupiter Research analyst, argues that local search doesn't work very well and doesn't provide the growth prospects the search engines need. An excerpt on the growth prospects:

Local search marketing will generate $502 million in 2004. That's just 19 percent of the total search marketing spend. Local search spending is actually growing more slowly than the rest of the industry. In 2009, local search will bring in $879 million, or only 16 percent of the total search marketing spend.

Only 4 percent of searchers say local search availability attracts them to a search engine, ranking it among the least-demanded search engine features. When consumers do use local search, it's mostly to find known merchants, not discover new ones.

Nate Elliot also points out that local search is hard. In particular, it's hard to get good, accurate, up-to-date, and clean data on all these tiny local businesses. And it's hard to market to and manage hordes of tiny local advertisers.

[Thanks, Andy Beal, for pointing out this article]