Tag Archives: local business

LifeAt takes social networking to housing communities

At first blush, I liked the idea a lot. Brooklyn-based start-up LifeAt has built a social networking platform apartment communities and other housing developments can use to connect residents with each other, the management and the neighborhood. With the help of some persistent PR reps, the idea has gotten some attention, including a feature in The New York Times.

Conceptually, the model makes a great deal of sense–and I’m guessing that the real estate investors behind the venture can keep it afloat for quite some time–but as I looked things over, I realized that I have some problems with LifeAt’s execution.

First, the basics. LifeAt, which developed all of its technology in-house, charges building managers a flat $6,000 to get access to the platform, which includes templates for personal profiles and “friend” connections, a community discussion forum, profiles of local stores, restaurants and services and a “marketplace” where residents can post free classifieds. To make sure only residents access the sites, no one can enter unless they get a username and password from the property manager.

As of late 2007, when the Times wrote its profile, almost 1,000 communities were live or scheduled to go live within a few months.  (Note: While CEO Matthew Goldstein didn’t say how many, at least some of the buildings are those already owned by the investors behind the project.) More interestingly, at that point more than half of residents in the already-launched properties had created personal profiles. In other words, yes, people do use the service.

So, other than the one-time $6,000 fee–a pittance as software development licenses go–how does LifeAt plan to support itself? Well, there’s the rub. Goldstein told me that the company plans to sell local advertising on the sites, something I very much doubt will work over the long term.

I’m skeptical of the local ad sales model for a few reasons. First, there’s already a huge array of local advertising options available to national companies who might want to go local, so the competition will be stiff there. Second, the local businesses immediately adjacent to the building are not exactly lacking in local channels either. Among other plays, there’s local newspapers, big city newspapers like the Times, Yellow Pages (both online and offline), ValPak and its ilk, plus local Web advertising plays by radio and TV stations. And unlike these local players, LifeAt’s sales folks aren’t going to be intimately woven into the life of that community (unless they have plans to hire thousands of local salespeople).

Sure, they’ll sell the “our people are more engaged” concept, but I don’t think merchants will be that impressed. After all, unlike the Facebook communities they imitate, as far as I know they’re not selling advertisers in-depth demographic and behavioral info on their users. So it’s just plain-vanilla advertising, even if sold by nifty partners (and it does have more than a dozen of those).

Meanwhile, another big issue is that LifeAt is relying on residents to create the local business content which plays a key role in its model.  As local search gurus know, it can be fatal to wait for people to create good content–especially business content. Instead, I think LifeAt’s going to have to eventually break down and license Internet Yellow Pages or other neighborhood business listings content from somewhere else. Then, they’re still providing a nice variety of local business content even if residents aren’t review-happy.

Ultimately, I think LifeAt will end up having to raise its initial charge significantly and make all of its money there as a white-label social media network technology player (albeit a rather specialized one).

But we’ll see…I’ve been wrong a gazillion times. Hey, I though Yahoo was a big waste of time in 1995, and look, it’s still alive!

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Facebook is a local search threat

Let me preface the following by saying that while I’m not a local search expert, I did pretend to be one on TV for a while, while doing an extended marketing communications consulting gig for the cool local search peeps at Localeze.com. (Hi guys!)

Now, with that consumer warning in mind, check this out. Having poked around Facebook’s advertising options for a week or so, I’ve drawn the conclusion that they may be competitors in the local search space before you know it. Specifically, if you look at their free “Facebook Pages” advertising option, you’ll see that it allows businesses to offer as much information on themselves as many basic Yellow Pages or directory listings.

To see what I mean, visit my sample Facebook page, “My Business.” If you’ll check out the “Information” section, you’ll see that I’ve entered a dummy address and one set of business hours just to illustrate my point.  When I set things up, Facebook collected this information into a back-end database. Given this set-up, Facebook’s almost certainly capable of indexing local business data and spitting the information out in the way, say, Yahoo Local does when it’s ready. 

Don’t get me wrong, Yahoo Local and its ilk are way, way ahead of Facebook in this regard, as they’ve already developed beautiful local search interfaces, amassed tons of local reviews and integrated mapping, tag clouds, sophisticated business classification schemes and other cool functions. 

More importantly, to my knowledge Facebook entries aren’t currently searchable from the outside Web, which limits their current value despite the social network’s huge size and reach (69 million current reasonably engaged users at last count). That’s certainly a large obstacle.

Still, I don’t think a company with Facebook’s clout and resources will be held back by technical issues when they’re ready to fight for local business/search market share. All they’ll have to do is figure out how to monetize the pages effectively, and you know what, I’m pretty sure that they will.

Watch out, local search folks! Facebook’s a’ comin, mark my words.

Like what you see in What Matters Online? Want to stay up to date on the latest in Web 2.0, social media and old-school interactive marketing? Get notified of our latest updates by e-mail or RSS. I will never sell or exchange your information, and I won’t deluge your inbox — I promise!