AOL Gets Local

AOL launched a beta version of its new local search product today. Though MapQuest has served as the de facto centerpiece of its local search functionality, AOL has trailed behind its search and portal competitors in having a dedicated local search product that is packaged as such.

Part MapQuest, part AOL City Guide, the product will have a user experience similar to those of Google Local, Yahoo! Local, Windows Live Local and Ask City. In other words, on a basic level, it will provide local business search with results arrayed against a map.

Given MapQuest’s traditional affinity for keeping it simple and focusing on basic functionality, best directions and comprehensive underlying data, it will be interesting to see how this new product develops with the mapping bells and whistles that have driven the competition among the aforementioned providers (multi-point directions, real-time traffic data, user reviews, etc.).

The business search angle on which this product (and most local search products) is based adds an entirely new element to the competitive strategy that has driven MapQuest’s evolution and suggests the need for more competitive features. MapQuest in other words is the dominant market share leader (68 percent, according to Nielsen) for mapping and driving directions, but a broader local search product will require an entirely different competitive differentiation strategy that involves a feature-rich interface. Ask has been the most innovative in this respect over the past year.

Not to downplay solid basic functionality, though. “Will it find what I’m looking for?” is also paramount in local and is the No. 1 factor in user retention (though bells and whistles can help get them in the door) for local mapping products. Finding exactly what you are looking for by having the most comprehensive underlying data for place search is what MapQuest attributes to its commanding online mapping market share lead. If it can transfer this competitive differentiation to local business search, it will go far in gaining market share for this new product in the competitive and crowded local search space.

There will still be overall market growth and opportunity here, though. With the last major search portal launching a local search product, it’s clear local is “table stakes” for search engines. It’s a mistake to see local as its own vertical, as we’ve pointed out in the past; rather, it is a necessary (horizontal if you will) component to any comprehensive search or portal product. The opportunity here ties back to findings from The Kelsey Group’s recently released forecast that project the global interactive directory market (local search and IYP) to grow from US$4.1 billion last year to US$11.1 billion in 2011  a 22.3 percent compound annual growth rate.

The site itself has a clean interface and nice integration with MapQuest. It also returns comprehensive results in the few searches that I did. A more comprehensive across-the-board comparison of local search results is deserved. In the meantime, check out the site for yourself here.