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BOSTON -- The 400 participants at the Kelsey Group Online Directories and City Guides Conference have a bad case of portal envy.
Presenter after presenter here on Thursday showed slides listing the top 10 Web properties by traffic volume, and lamented the dominant role that sites like Yahoo, GeoCities, and Excite play in many users' lives. The companies in attendance -- local newspapers, regional Bell companies, yellow pages publishers -- all believe that they, too, deserve a special place in Web users' hearts.
"Local players were anticipating that their homepages would be the first place people would turn to," says Peter Krasilovsky, an analyst who focuses on local media and one of the conference's organizers. "But now they're being forced to acknowledge that local isn't the center of the universe; they have to work their way into people's surfing patterns just like everyone else."
It's not just building an audience that directories and city guides are struggling with. They're also fighting each other to sign neighborhood-oriented small businesses as advertisers. So in markets like Boston, for example, Microsoft's Sidewalk, Bell Atlantic's BigYellow, the Boston Globe's Boston.com, and America Online Digital City may all be knocking on the door of the same corner grocery, selling ad banners, enhanced listings, or microsites.
"The competition and confusion is holding [advertiser] dollars out of the marketplace," said Mark Teren, publisher of WashintonPost.com, during one panel discussion. "Right now, the ones who are spending are spreading their dollars among newspaper sites, online yellow pages, and national city guides, because there is no clear leader."
Teren added that he hoped financial losses would winnow the pack of competitors, leaving only two or three key players.
Other speakers pointed out that directories and city guides may not be able to rely solely on ad revenue if they expect to survive on the Web. "You can't just sell advertising," observed John Kelsey, president of the Kelsey Group. "There's too much competition for those dollars. You have to bring buyers and sellers together and create transactions."
Participants agreed that establishing a position as a middleman and taking a cut of online transactions is an important strategy, but one that few directory companies and city guides were pursuing. A pre-conference survey conducted by the Kelsey Group found that attendees projected that their revenues from transactions would equal revenue from advertising by 2010. But they're far from that goal today.
"The big gap right now is not being able to complete the transaction," said Larry Mattson, vice president of marketing for Telus Advertising Services, a division of the Calgary-based Canadian telecommunications company. "The buyer is ready to buy: He's found that pizza shop and he's ready to order. But we don't have a way for him to do that yet."
Newspapers and traditional yellow pages publishers have been slow to pursue new strategies and adopt new technologies. "We're all scared to talk about cannibalism," said keynote speaker Jeff Taylor, founder of the Monster Board, a leading career site. "Everyone would rather talk about migration, but the reality is that someone's out in a garage somewhere inventing a [better] way to do what you do.... Players in traditional media don't always become players online."
In a nearby exhibition hall, several vendors demonstrated new technologies designed to appeal to city guides and Web directories. Zapa Digital Arts was showing its MicroSites software, which enables small businesses to create their own animated banner ads. The idea is to allow a yellow pages publisher to provide the software to its advertisers to help them promote their online storefronts. But so far, Zapa has found no customers in the directory business. "They're yellow pages, so they're not breaking any speed records" for adopting new technologies, said Steve Webster, Zapa's director of sales.
E-Fusion, an Oregon company whose software lets users place phone calls over their computers while surfing the Web, was also hoping that directories would be hungry for its technology. Mike Shultz, an engineer from the company, demonstrated how a user might find a restuarant listing online, click an icon, and place a call to make a reservation. But he said that he had no directory customers to announce.
"Are the yellow-pages companies leading edge?" asked Mattson, the vice president from Telus. "No. But do they know they have to do something quickly or be eaten? I'd say so."
The overarching theme Thursday, though, was not eat or be eaten, but portal envy.
"MediaOne wants to be a portal, full of all kinds of content and applications," boasted Meredith Flynn-Ripley, a vice president of the Denver-based cable company.
"Newspapers are rethinking whether they should be portals," said Gina Maniscalco, executive director of Boston Globe Electronic Publishing. "Should we become a search engine or partner with a search engine?" Steve Yelvington, editor of the Minneapolis Star-Tribune, joked that his site was not only a portal, but "a dessert topping and a floor wax, too."
"Everybody's still looking for the winning formula," says analyst Krasilovsky, who predicts a shakeout among the numerous players currently focused on local content and listings. "They all want to find the secrets to attracting an audience and getting people to buy locally. It's an interesting environment, and what makes it exciting is that we still don't know who's going to win."
