[Posted on October 24, 2007 - 11:32 PM]
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Local online commerce startup Judy's Book said today it is scaling back its operations and
seeking a strategic buyer. The news shouldn't come as a shock. What
began as an online forum for rating local service providers morphed
into a local coupon service last year. Now, the Seattle company that raised $10.5 million from Mobius Venture Capital, Ignition Partners and Ackerley Partners has decided to give up on local ad dollars.I was skeptical of Judy's Book -- like all startups targeting local ad dollars -- from the start. It's a huge target market but incredibly fragmented. Yelp has gained some market mass in a few areas but it's difficult to translate success in one region to another. Click here for ten more reasons why the local ad market is so tough to coral.
I used Judy's Book on one occasion to review the performance of a leak detection company in San Francisco. It was a positive review and a few months later, my contact at the leak detection firm called me back to thank me for mentioning him in "Judy's Book". He was thankful because he said a new client of his "read the review in Judy's Book" and ended up hired them. His call showed me that people look to local online review sites for referrals. It also showed me that some local merchants weren't sophisticated enough to advertise in, let alone, grasp the concept that Judy's Book was a web site, not a printed book sitting in some room.
See below for an incomplete list of online startup targeting the local market. I'm not sure who will be next to get shredded, but in light of Judy's Book and Insider Pages' failures, I predict trouble for any local startup that refers to printed matter in its name.
As for me, I now use Yahoo Local and Yelp for local referrals. The leak in my living room returned last winter so I may be looking for a new leak detection firm soon. - Joshua Jaffe
