1995's Next Big Things

For the 15 years I have been writing about digital media, two media business models have been "about to break through any day now": local advertising and vertical search. Every couple of years, another team of startups ran onto the field with models that they were sure would jump-start markets that seemed so ripe, so in need of the internet. After all, aren’t most consumer dollars spent locally, and wouldn’t it be logical for merchants and consumers to meet each other via this wonderfully convenient medium? And when it comes to search, don’t professionals need more targeted, efficient ways of finding information than a general search or (back in the day) directory service?

The answer to both questions is yes, but no.

In reality, logic has less to do with the evolution of new technologies and their business models than does sheer habit. In the case of local advertising, most people did, and still do, grab a "Yellow Pages" to find their local services, and it is among the first place merchants think to advertise. Over the years, I’ve seen countless schemes for breaking this cycle. One company tried to recruit people in neighborhoods to go door-to-door signing up small businesses to internet ad products that these poor service providers neither understood nor used themselves. Even as user habits change—today a quarter or more of searches are local—the choke point remains changing the ad-buying instincts of millions of mom and pop shops that constitute most local service economies.

Vertical search is an even more frustrating category that business publishers have been pounding for years now. Survey after survey finds that business professionals say they want tools that are more specialized and targeted to their subject matter, but a small percentage ever actually use them. Research from Convera shows that 93% of business users are "very" or "quite" likely to use a vertical search engine, but 91% say they tend to rely on general search.

B2B publishers have been struggling to change their own users’ habits. Of course, there are shining examples of successful vertical portals such as GlobalSpec and Medscape. And professionals do rely on some specialized engines to find granular data. SearchMedica reports that its most popular cancer-related search of 2007 was "CNS metastases," which is a far cry from Google’s top search terms of 2007, "American Idol."

Only about 7% of business searchers go to a vertical search engine multiple times a day, and about a third go infrequently if at all. Now some of this is a quality-related aversion, to be sure. Most vertical search users rank these sites as merely good or average, and only 7% regard them as excellent. General engines fare much better. Too many publishers have used vertical search as an excuse to oversell advertising placements and sponsored results. Like local search, vertical search does not yet inspire confidence that users are getting results that are as comprehensive as global search.

However, part of the problem has been getting professionals off of the Google crack pipe. Again, it is a question of habit, not technology—and not always quality. Even if you build an excellent vertical search engine, pack around it all the cool tools in the world, and filter out all the irrelevant search results, you still have the task of getting people to remember to use it.

If there is one persistently uncracked bit of code in the internet program, it is habit. Back in the late ’90s I lost count of the number of internet business plans I saw that relied on users adopting new and different ways of managing their time, maintaining contacts, storing data, receiving news, communicating with one another, etc. Just because an engineer in the bowels of your programming team sees the inherent genius of maintaining a personal calendar online doesn’t mean that most people will give up their fat Day Book or even Outlook anytime soon.

I have no doubt that someday in some way, perennial hopefuls like vertical search and small business local advertising will become de rigueur online. But their decade-long crawl toward the mainstream suggests that betting on models that ask users to change old habits quickly is the fool’s gold of the web.

This is a good thing to keep in mind as Web 2.0 brings with it a "new wave" of "revolutionary business models." Anyone want virtual worlds? Collaborative shopping? Web-based office applications? Ebooks? Digital magazines? Funny, I don’t recall doing hallucinogens in the ’90s. So why am I experiencing flashbacks?