Vertical Without Vertigo

My brother recently had a “vertical experience” in the Disneyland “Twilight Zone Tower of Terror.” A 150-foot drop in a rickety old elevator. Three times, in fact.

But Disney’s vertical engineering legerdemain is less ambitious than that of the diverse “vertical” providers who spoke at the “Building Online Vertical Experiences” panel this afternoon at Directional Media Strategies 2008. Wrangled by Peter Krasilovsky, the panel included Tom Bates, VP and GM of Cox’s Kudzu; John Busby, director of product management of Marchex; and Joel Toledano, CEO of Krillion.

Started in Atlanta in 2005, Kudzu has since expanded to San Diego, Phoenix and Las Vegas. It will soon be expanding to other markets (although it’s not yet clear if it’s growing like the eponymous weed). Kudzu’s goal is to provide an online substitute for “word of mouth,” focusing on home-related and other services.

As Bates acknowledged, “It’s good to be Google” (brings to mind Mel Brooks’ musical soliloquy “It’s good to be king” in “The History of the World”). But more importantly, Bates proffered that it’s also good to be one click away from Google — and that a viable business can be built in that position. Meaning: Kudzu can build a business as a recipient of Google’s search traffic related to home and other services.

Krillion’s Toledano pointed out that seven of the top 20 search terms are for big-box retailers. Seems that these big-box retailers have a knack for selling large quantities of products consumers crave. Krillion maintains a ginormous database with more than 1 billion SKUs, and accurate information on which items are in which big-box stores. Act II for Krillion will be to upload data from the legions of smaller merchants — a work in progress. Krillion is also now powering local inventory search for mass market product companies (such as Panasonic), and will soon be powering similar information on behalf of a major consumer review site.

Toledano opined that a key to building scale in the online world is to use “other people’s traffic” (perhaps the online counterpart to “other people’s money” in the world of finance).

Marchex, by contrast, has assembled a network of some 150,000 locally focused Web sites (yes, that is one hundred and fifty thousand). You might say this is the very long tail of Web properties — in fact, Busby did say it. He said that “consumers engage the long tail” — and backed this up with data. That is, consumers like sites that have a narrow focus on specific activities, topics or places. This specificity is precisely what fuels consumer interest.

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