SEARCHING CLOSER TO HOME
SAN FRANCISCO (CBS.MW) -- Consumers are increasingly using search engines to find local information to buy products or services.
By Bambi Francisco, CBS.MarketWatch.com
Last Update: 11:30 AM ET Feb. 12, 2004

That's quite an expansion of search engine use from just checking on the weather, directions to a neighborhood restaurant or movie listings.

A new survey of more than 5,000 online buyers conducted by The Kelsey Group and BizRate.com shows that local searches with the intent to buy represented a quarter of all searches performed by online buyers.

Additionally, 44 percent of survey respondents said that they performed more local commercial searches than one year ago.

"This is the first empirical data that tried to measure the percentage of search queries with a buying decision as the ultimate outcome," said Greg Sterling, director of The Kelsey Group's digital directories interactive local media services.

Sterling said that percentage is four times as much as industry estimates of roughly 4 to 5 percent.

What the report suggests is that there is demand from consumers to find local businesses on the Internet.

Rising consumer demand, which the Kelsey report supports, could ignite more interest from local merchants or service providers, like doctors or plumbers, etc., who haven't truly embraced the Web to advertise in their neighborhood.

Consumer demand may also give search engines, like Yahoo (YHOO: news, chart, profile), Google, or Ask Jeeves (ASKJ: news, chart, profile), or new services, like Tribe.net, which is trying to position itself as a Craigslist and local version of eBay (EBAY: news, chart, profile), the impetus to accelerate their efforts to improve local search features.

If consumers are showing interest in local searches, then merchants will follow. But merchants' advertising will only follow if there is an outlet for them.

Besides using the search engines, geographically specific sites like InterActiveCorp's (IACI: news, chart, profile) CitySearch or Internet Yellow Pages, like Verizon's (VZ: news, chart, profile) Superpages, already aggregate a critical mass of consumers from a local area. To this end, they're positioned well.

The Kelsey Group will be holding a conference titled: "Drilling Down on Local Search." The two-day conference will kick off on March 30 at Santa Clara, Calif.

CBS MarketWatch will be moderating a panel on "The Chicken and the Egg" problem of local advertising.

Bambi Francisco is Internet editor of CBS.MarketWatch.com, based in San Francisco.