Planet Discover Acquisition a Potential 'Turning Point' for Newspapers

I spoke this morning with Terry Millard, CEO of local-search vendor Planet Discover. As has now been widely reported, the company was purchased last week for an undisclosed sum by Gannett, which is now the nation’s largest newspaper publisher in terms of number of publications and revenues.

Millard and his brother, who is the CTO, will stay on. Gannett intends to operate the company like PointRoll, as a separate entity. Planet Discover is behind “integrated search” at three Gannett publications and many more newspapers, as the industry tries to confront adoption of the Internet for lookups that used to be done exclusively in newspapers and yellow pages offline. (Newspapers have been dealing with the challenge to classifieds usage and revenues for several years.)

Millard told me that the acquisition and forthcoming investment will enable the company to pursue its long-term product roadmap and further build out the company’s search-technology infrastructure.

Here are the results for a query on ?home improvement? on Tuscon.com, which Planet Discover powers. The company is also behind McClatchy?s Triangle.com and South of Boston Media Group?s Wicked Local Search. And while the user experiences on these sites are imperfect, they are considerably better than what’s available through most newspaper sites.

The general idea is: improve site search and the user experience and more usage will ultimately generate more revenues. I agree with that logic but local market fragmentation makes it somewhat more complex to realize than the ?ipso facto? relationship I describe.

Gannett has said it will roll out Planet Discover?s search technology on all its local newspaper sites. And while newspapers have been getting into local search here and there in dribs and drabs, this development marks a turning point for the industry. Similarly, but in a different way, so does the earlier McClatchy-WebVisible deal to sell paid-search distribution to local newspaper advertisers.

Gannett’s acquisition will force newspapers large and small to think about site search and their local search strategies more generally.

In addition to newspapers, there are many ?constituencies? in local search vying for eyeballs as well as advertisers: yellow pages, search engines/portals, vertical sites, classified sites, local TV affiliates and local radio sites. Not all are executing of course. But this list illustrates how crowded this nascent market is becoming ? also how fragmented.

There are dozens, if not hundreds of local sites that accept ads and many more places where consumers can search for local information online. Aside from the major search engines and some yellow pages sites, “local search” is a confusing proposition for everyone. In the aggregate it’s a multi-billion dollar opportunity but realizing that opportunity is complicated and a long term proposition.

Newspapers have long had the capacity (on paper) to ?own? local search but have had trouble executing because of their internal cultures and reluctance to radically overhaul or otherwise experiment with newspaper sites. ?Secondary brands? (e.g., YourHub.com, Sacramento.com, Readexpress.com) are emerging, which allow newspapers to experiment with different content, different functionality and navigation while still preserving the ?sacrosanct? main newspaper site. Successful experiments can be incorporated into the main site. An alternative strategy is to have a local search destination, such as Triangle.com or Sacramento.com that pushes newspaper site content out through that single engine/portal.

Despite the furious competition between Google, Yahoo!, MSN and directories in local (and maps), no one yet owns the category. Newspapers and yellow pages publishers have a local sales channel, which provides an advantage in acquiring and retaining local advertisers. But search engines have considerably more traffic. Nobody has all the pieces of the local search puzzle. All of this makes for an interesting dance of business development and partnerships.

Judging from history, the newspaper industry would be something of a long shot to succeed in local search. But the future of newspapers depends increasingly on the Internet ? a fact that newspapers now clearly understand. And they are becoming more serious by the day about it.