July 6, 2004

Overture plans to partner a local business directory provider to focus on Telstra's one-stop-shop online search and directory service, Sensis.

Sensis plans to assemble a formidable collection of information services, including White Pages, Yellow Pages, Whereis.com and the Trading Post, behind what's expected to be Australia's most comprehensive online and voice search product.

However, Mel Bohse managing director of the Australian division of search advertising giant Overture, was last Friday quietly confident about the company's prospects of competing with Sensis.

Bohse said her company, which plans to launch its own local content search service before the end of the year, was ready to compete with Sensis "head-to-head" and left clues it may leverage one of Sensis' pre-existing offline competitors.

The new product, called LocalMatch, is among the online search industry's first concerted attempts to provide genuine localised search services. It follows the release of an equivalent service in the US last week.

Bohse said having a local directory service product on the back-end was a necessity but wouldn't discuss how it would be sourced.

"Maybe the days of monopolistic attitudes in this country are almost over," said Bohse.

The comment could be a nod in the direction of Yellow Pages competitor Pink Pages, but Frost and Sullivan senior analyst Foad Fadaghi said Sensis' track-record for fiercely protecting its products may make such a competitor difficult to find.

"Sensis is very monopolistic in their approach; they pretty much sue anyone who tries to break into their area," said Fadaghi.

Even if Overture can strengthen its local search directory there maybe other obstacles to competing with Sensis.

According to Frost and Sullivan Overture has to overcome "inherent issues" reaching Australian small businesses that don't have a Web site.

"They typically don't spend much money on any form of advertising and if they do it's typically a Yellow Pages listing," said Fadaghi.

Overture's Bohse concedes that while ad agencies understand search, the small-to-medium sector is still some way behind.

"The mid-tier and definitely the majority of SMEs have not really played with search market very much and are not totally comfortable with how to go about it -- that's why were spend some time trying to educate those guys and there's a lot to educate," said Bohse.

"A lot" is in fact the majority of Australia's 1.3 million businesses, according to Overture.

A search college established by Overture targets individuals who would like to work in search or are in positions of power where they need to actually spend marketing dollars. While it covers basics such as setting up an account and placing bids, it’s really a method to test drive the Overture service.

Bohse said all students would be offered AU$100 worth of Overture search services to evaluate its advertising performance.

Frost and Sullivan expects a recent surge of interest in pay-per-click in Australia to have a moderate affect on overall online advertising revenues.

According to Fadaghi, it's more likely to lead to cannibalisation of existing online advertising revenue sources such as banner ads than draw it away from conventional offline methods.

Source: ZD Net.com.au

        

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