Niesenholtz at YPA: Local ’Untapped Opportunity’

New York Times Digital Chief Martin Niesenholtz, keynoting the Yellow Pages Association conference this morning in Las Vegas, called local “a huge untapped opportunity in the directories arena that no one including the portals has yet tapped.”

I’m not at YPA this time, but a draft of Niesenholtz’s address noted that the winners in local “could come from many different directions: from the social networking side; from information businesses; from search; from startups; and, of course, from the directory players. So far no one has truly tapped and structured the input from local audience/s. When that happens, it will be a game changer. I have very little doubt about that,” he said.

Niesenholtz warned that he is “not a Yellow Pages consultant” but nevertheless brings to the table some strong bona fides in the YP arena. He serves on the board of Canada’s YPG, and before coming to The Times Co. in 1994, ran interactive for Ameritech. While he has basically steered The Times away from local, he did go deep for NYToday, a short-lived cityguide.

During his talk, he told YPA that it is critical to fully embrace the social Web. “There is tremendous knowledge and power locked up in our users, and traditional media businesses have failed so far to adequately exploit that. A lot of travel sites, including ours, can give you comprehensive hotel reviews for the major destinations, including, of course, Las Vegas. But try getting hotel reviews for a place where you need to go because your kid wants to do a college tour. Or where you might be visiting relatives.”

Niesenholtz also bemoaned that too many media companies gave up on the Web just as usage started to climb. In 2001, of course, NY Times Digital was slated to be spun off as a separate company. But then it collapsed.

During those dark days, he recounts, “few investments were made. Internet talent was fired. Innovative skunk works shut down. Now, ask yourselves: what was the central assumption about the strategic environment underlying these moves? Simple. It was that consumer behavior was tracking with the financial implosion. Business leaders were shuttering Internet operations at the inflection point on the consumer side, and at the very moment when Internet advertising was poised to explode.”

Such tracking, and the desire to balance The Times’ portfolio, was part of the concept behind the acquisition of About.com. “Have we learned from About? You bet. The Times company is now one of the world’s leaders in search engine optimization. If you’re not optimizing your content for Google and the other search engines, you’re becoming less and less visible to the outside world,” he added.

Niesenholtz also noted that the broad reach of the Internet and database technology demands a verticalization strategy. “We transitioned from being publishers of newspaper articles on the Web to Web publishers,” he said. “This is a huge difference, as the latter involves developing significant competencies in such areas as application software development, interaction design and user generated content.”

To verticalize, Niesenholtz said The Times “needed to rapidly transform many of the vertical parts of the site into highly robust, data base driven sections. We had made this transition with our movies vertical in 2003 and we’d seen traffic go from 800,000 visitors a month to 4 million. Now we needed to do it in Travel, Business, Style and other areas of robust advertising demand.

Specifically addressing the Yellow Pages industry, Niesenholtz says “your brand extensions your IYP platforms feel like the classic Christensen integration story. But some of the new, highly innovative approaches require a very different sensibility one that you might have to acquire and manage quite separately, as we have with About.com.

“The era of the walled garden is over,” concluded Niesenholtz. “And it’s over for two reasons: The first is that our users expect us to offer much more than what we can reasonably supply on our own. They expect to see all sides of a story. And they expect to be able to share their views, as well as get the views of others. But the second reason is that we must let the inside out in order to grow. If you don’t have a viable Web syndication strategy, you will find it almost impossible over time to attract users.”

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