FindWhat, Verizon Go Local in Tandem

Paid search listings player FindWhat.com will provide Verizon’s SuperPages.com with technology to power enhanced local advertising, in a partnership that unites two sectors trying to bring smaller businesses online.

There’s been much speculation about the relationships or rivalries that will be formed between paid search players and Internet yellow pages (IYP) companies, as the former go local to tap small businesses and the latter work to lure their current small business customers online.

“Getting to those businesses is tough. A lot of people have tried to get there and failed,” said Rick Szatkowksi, director of corporate development at FindWhat.com.

In the deal announced today, FindWhat leverages its technology while Verizon takes advantage of its 2,600-strong sales force and its relationships with local businesses. The agreement calls upon the strengths and addresses the weaknesses of both companies. While IYP players have long had relationships with local advertisers, they’ve not followed the pay-per-click pricing model — a “no-risk” model that’s driven the popularity of paid search with small businesses.

One of the challenges the two companies will face is educating small businesses about the nuances of paid search. Handling keyword campaigns is becoming a challenge even for seasoned Internet marketers as the space grows more complex. For many, auction-based keyword campaigns involve daily, even hourly, tweaking, to react to competitors’ bids and keywords’ performance. Small businesses accustomed to simply buying a yellow pages ad once a year may find the whole process overwhelming.

This is why FindWhat’s Szatkowski believes small businesses will take advantage of automated features of the technology. “We have the cruise control package. This allows them to employ things like autobid, which allows them to establish a maximum bid price for any keywords. It allows them to set it and forget it and it’ll handle itself,” he said. “I think it’s a combination of those tools and just the relationship which will really help the SMEs be successful with this kind of medium.”

The two companies will share the revenue generated through the enhanced local advertising program, which Verizon expects to launch in early 2004. Specific terms weren’t disclosed.

The agreement calls for FindWhat’s technology to be private-labeled, a model the company has used in agreements with Lycos and Mitsui & Co. in Japan. FindWhat will also provide hosting for the software at its global data centers.

While others in the paid search arena have shown interest in developing local offerings, the approach taken by FindWhat and Verizon is unique thus far. Past partnerships between IYP and search players have mostly consisted of deals to display paid listings on yellow pages sites. Google, for example, provides contextual ads to Switchboard.com.

Meanwhile, search players are trying to go local on their own. Overture has said it’s developing a local product that will be released later this year. Google has launched a beta program to allow AdSense advertisers to target their paid listings locally, and is also testing geographically targeted search in its Google Labs.