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Oct 23 2006
Grayboxx: 50 Million Mentions Can't Be Wrong (Can They?)
Are most of the businesses in your address books ones that you would endorse? How about the mentions in your calendar of restaurants where you are meeting colleagues? How about the businesses in your photo software that you have bothered to tag? Or the ones you mention in e-mails, various Web sites and other sources?

Generally, the answer is: �Yes. I like them. That�s why I use them.� And that�s the premise behind Grayboxx, a new San Francisco Bay Area-based company that is �four to eight weeks� from being funded, and hopes to mine user data from a variety of sources to come up with �most popular� ratings (although in this case, �most popular� is translated as �most mentioned�).

Company founder Bob Chandra thinks the system is going to prove vastly superior to the ratings and review sites, like CitySearch, Judy�s Book, Insider Pages, Yelp and Kudzu. Unlike the others, he claims, it achieves a critical mass of reviews, without changing the essence of user meaning. Aside from popular categories like restaurants, most businesses on other ratings and review sites have just one or two reviews and many don�t have any, he says.

True, Google Base and MSN Live Expo have gotten closer to criticial mass by aggregating reviews from several of the sites. That helps. But they don�t always have enough, either.

So Grayboxx sounds like a good starting point. But by no means is it a perfect solution. Speaking personally, my Palm tends to only contain service providers, such as painters, electricians and termite killers. The only restaurants that I tend to list are a few upscale ones that require reservations � usually in cities where I travel on business, rather than where I live.

Although I have reviewed them on the ratings sites, I certainly have no need to list the Mexican restaurant that I go to every Friday night in my address book � Fidel�s. I also don�t list Linda�s Homemade Yogurt down the street, where I finish my pigout. If you want to follow in my footsteps, gastronomy-wise, you won�t get satisfaction from reading my Palm.

For that matter, I don�t actually tag the names of businesses in my PhotoShop, either. The best you will get out of me is a photo outside �The Plaza Hotel� in New York, where Redford and Streisand once stood. It would be kind of an aberration for me to tag, say, a Marriott Courthouse in Overland (even though I am a proud member of Marriott Rewards).

But you got to start somewhere, right? And the Grayboxx solution is certainly inventive � assuming it doesn�t alienate people by taking their address book and e-mail info � even in aggregate. The company also gets brownie points with me by hiring a marketing exec who has had some exposure to local sales � former SBC Senior Director of National Advertising Doug Threet. That�s kind of unusual for a Bay Area start-up these days; hats off to them. (Innocent question: Why would a VC invest millions of dollars in a local concept company that hasn't hired an executive or consultant without any kind of local experience, or even exposure to a local media company?)

With this in mind, I had a phone conversation with founder Bob Chandra. Chandra says I am probably atypical in my limited mentions of local businesses. In Grayboxx�s early testing, most address books alone yield three-to-five businesses apiece, providing aggregated review counts of 25 to 100 for businesses in the Bay Area, where the company has been doing some prototypes. On Yelp, he says, you might see just one or two.

Chandra says his ultimate ambition is to collect a base of 50 million reviews. He also plans to go vertical, with such products as a �home contractors� page and a �business to business� page � both areas of particular strength. His goal is do an "effective job" of providing ranked results in 3,000 categories; 600 of which he hopes "to provide at least 200 recommendations.�

To reach his numbers, Chandra is currently leaning heavily on a national data collector (whose identity he won�t publicly reveal, but if what he told me checks out, it is an interesting one). Looking forward, he envisions a number of additional sources for data, including the aforementioned photos, but also such sources as free directory assistance queries. One imagines there is real potential with that as well.

So what do I think? The company�s solution is kind of left field. And it isn�t going to be nuanced enough to plan a date. Based on sheer number of mentions, you�d probably end up at Applebee�s.

But Chandra disagrees. To paraphrase an old record cover, to him, basically, 50 million Elvis fans can�t be wrong � especially when they are weighted with some unique Grayboxx algorithms for negative comments, etc. �Please see our correlations with quality (user rankings and critics picks)," he says. "I invite you to conduct searches against Yelp or Yahoo!."

What else do I think? Assuming Grayboxx gets the right partners, and its concept goes over, I think it may well get over the serious hump of �critical mass.� And then it could be perfectly positioned to build its own review database, since it will be operating from something. I also think its chances are somewhat stronger in vertical categories, where it can go up against approaches like LinkedIn�s new Yellow Pages.

I just hope it doesn�t take its algorithms too seriously. This isn't about computers. Ultimately, review sites/social networks really are about individual taste. There�s nothing in Grayboxx that helps me with that. Yet.

Blog: Local Media Blog
posted by  Peter Krasilovsky at  22:46 | permalink | comments [0] | trackbacks [0]

Oct 23 2006
Hearst Invests in Jingle's Free DA
Hearst Corp. is listed as a lead investor in Jingle Networks� new US$30 million financing round, along with Goldman Sachs. Jingle is the two-year-old provider of 1-800-FREE411, an ad-supported, �free� directory assistance service. Other investors are repeaters from earlier rounds. They include Comcast Interactive Capital, Liberty Associated Partners, IDG Ventures Boston and First Round Capital. The new round of financing comes on top of earlier rounds, including US$26 million from Liberty Associated.

Free DA is currently something of a black hole. Most of Jingle's new money will probably need to go to subsidize money-losing calls, while the company perfects its automation and builds up the market, market share and its targeted inventory. Many calls to 1-800-FREE411 today, for instance, do not have any advertising. In addition, many calls revert to live operators, which is good service but highly costly. Earlier this month, the challenge of building the marketplace claimed InFreeDA, the provider of 1-800-411-METRO, one of Jingle�s highest-profile competitors.

Hearst�s investment suggests that it might seek synergies for free DA beyond the national advertisers that currently dominate the category (and which it reaches via its magazines). Hearst�s local properties include Hearst Newspapers and White Directory, an independent Yellow Pages publisher.

Hearst doesn't have much of a track record in pulling off cross-media �synergies.� The acquisition of White in 2003, for instance, might have led to a directory presence in various Hearst newspaper markets, which include Houston, San Francisco, San Antonio and Albany. But the development of such ties has been a non-starter. To this day, there is no apparent relationship between the divisions. Still, the appeal of free DA might provide another way in.

Blog: Local Media Blog
posted by  Peter Krasilovsky at  14:47 | permalink | comments [1] | trackbacks [0]

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