Sunday, August 22, 2010

Facebook Places - Part 2: It's About Local Online Advertising

Most of the attention paid to Facebook Places has focused on the impact it could have on companies like Foursquare and Gowalla. However, I think Facebook’s real focus with Places is about a quiet entry into the local online advertising market.   So Foursquare and Gowalla might be the casualties but they aren't the target 

The prize is the local advertising market that the yellow page publishers still own and that Google has never been able to capture. The U.S. Online Search and Advertising market alone is $10 billion market and growing fast as media moves from traditional tv/newspaper/radio/yellow pages to the Internet.  

So, while it remains to be seen, this could have a profound impact on companies that do online local listings, reviews, search, etc.  I think companies like Yelp are at risk but I think this could have a measurable impact on the iYP sites as well as Googles initiatives as well.