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Net firms target local shoppers

The Internet lets companies reach around the world to find customers, but more e-commerce companies want to hang out at the local scene.

The Internet lets companies reach around the world to find customers, but more and more of them want to hang out at the local scene.

This week, eBay and Ticketmaster Online-CitySearch announced deals to increase local sales. A third company, media giant Knight-Ridder, announced a strategy to expand its community presence--and at the same time protect its home turf against Internet invaders.

Why go local, not global? To tap an advertising market that largely has been dominated by only a handful of players, as well as make it easier to receive goods in a hurry, among other reasons.

"One of the things that these companies recognize is that customers might think nationally, but they act locally," said Michele Pelino, an analyst for the Yankee Group.

eBay, for example, this week launched a Web site geared toward users in Seattle and Tacoma, Washington, among other cities. It is the latest effort by the online auctioneer to create so-called local auctions. The Web sites bring together buyers and sellers who can exchange goods locally. They can avoid the hassles of shipping large items via the mail, as well as purchase last-minute goods "in time for the holiday season," as eBay noted.

eBay's move also caters to merchants who sell their goods online and at a neighborhood storefront--an increasingly common strategy. The local auctions let businesses sell products online, but they also can draw customers into their brick-and-mortar stores, eBay regional marketing director Reed Maltzman said. eBay sellers can post information about their real-world and Internet storefronts on their site product pages.

"We encourage people to use eBay in the way that comes naturally to them," Maltzman said.

Virtual storefronts
Amazon.com's zShops and Yahoo's Stores also let local businesses set up storefronts online. Sites such as Imandi, Exp.com are linking consumers with local service providers such as house painters or legal professionals.

City guides aren't new, but offering these services provides another way to tap local customers. This week, city-guide site Ticketmaster Online-CitySearch announced that it soon will allow customers to make reservations at neighborhood restaurants, among other services. By early next year, for instance, consumers will be able to use Ticketmaster Online-CitySearch to make a hotel reservation and then pay for the room online.

"We help people get more out of their city," Ticketmaster Online-CitySearch chief executive Charles Conn said. "We help people actually get things done."

Newspapers pay a price
As e-commerce goes local, observers say, it could especially hurt one of the tenants of cities--the local newspaper. Newspapers largely depend on classified advertising to support their operations, but they could see their classified revenues shrink as businesses shift their listings to sites such as eBay, International Data Corp. analyst Barry Parr said.

"The Internet is an enormous threat to newspapers," Parr said.

For its part, newspaper giants such as Knight Ridder and the New York Times Company are taking steps to protect, and with luck, grow its revenue. This week, Knight Ridder announced plans to spin off its Internet operations, partly to focus on the network of regional city guides that it expanded in September.

"We are aiming to be the central hub…for individuals and businesses to transact and…get information on shopping online," said Emily Lyons Soelberg, a Knight Ridder New Media manager. "We think that our RealCities network has got the key components. We think it's really our market to lose."