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CitySearch guides local market

The merger between the local guide and Ticketmaster show that local content sites now are more focused on how to make money.

When city guides started launching nearly two years ago, they were seen as the Net's next Holy Grail, the pot of gold at the end of the rainbow, the magic key that would make the Net hum with bucks.

The money hasn't exactly poured in--at least, not yet. And while many guides have gone through hard times with layoffs and strategy make-overs, today's merger between CitySearch and Ticketmaster shows that, if nothing else, they haven't given up the dream of making money by serving up local information on the Net.

Analysts were mixed on how today's deal would affect the landscape, but most seemed to agree that at the very least, it couldn't hurt and it probably will help CitySearch. While Ticketmaster links up with many sites, allowing people to buy tickets directly online, the two companies, once they merge, will be able to tightly integrate the shopping experience, said Charles Conn, chief executive of CitySearch.

For instance, a user looking for a Beastie Boys concert will be able to find the concert and then instantly buy the ticket. Eventually, he'll also be able to conduct a whole host of related transactions. For instance, he might in one fell swoop be able to purchase the tickets, CDs, and T-shirts. And then he would be able to make a reservation at a restaurant for his preconcert dinner.

"The way to make the Web more ubiquitous is to allow [users] to do something you just can't do in any other medium," Conn said. In other words, anyone can look up a concert in the local newspaper then call for tickets, but if the Net makes that process simpler and adds related functionality, then people will have a reason to come online.

Allen Weiner, an analyst at Dataquest, calls the process a "multiple dip."

"Instead of one dip into the consumer's wallet, it becomes multiple dips into the consumer's wallet," he said.

As crass that that might sound, when it comes to e-commerce, getting consumers to dip as many times as possible is the name of the game.

For that reason, Weiner applauded today's merger.

"I think it's a terrific deal," he said, noting that companies have long been striving for that way to get people to buy.

"It's a pretty simple concept," he said. "You've really changed the whole architecture of the way people currently have to make transactions. This puts it all in one place. It creates a single marketing channel."

At the same time, though Weiner and others praised the deal, their enthusiasm was also tempered. While giving consumers the immediate ability to buy online will help CitySearch, the very fact that the company made the deal "is a sign that this category is in trouble because this is an attempt to really try to create differentiation," Weiner said.

At the same time, Mark Mooradian, an analyst with Jupiter Communications, countered that the merger does not represent a radical departure for CitySearch, which has always tried to find ways to offer ticketing.

"I just don't see this as being a huge change in the direction of what they were planning on doing," he said. But, he added, "it's a feather in their cap that they have Ticketmaster."

Although local sites have struggled somewhat, observers say they still have the potential for success.

Part of the reason for that theory is that local advertising, the bulk of which today goes to local newspapers and telephone directories, is worth billions of dollars annually. The roadblock is that sites such as CitySearch, America Online's DigitalCity, Microsoft's Sidewalk, and even sites belonging to independent newspapers are not established enough yet and haven't built big enough brands to attract advertising on a grand scale.

"All these guys are losing a whole lot of money because they don't have mainstream advertiser acceptance," said Mooradian. "I think the euphoric sentiment at launch has been replaced by a little more pragmatic reality."

CitySearch's Conn is focused on reality. "We think we've moved to the next level," he said. "Online content has been very successful at gathering an audience. What people have struggled with is what's the right business model."

CitySearch has it, he said: building local home pages for medium-sized businesses, attracting a consistent audience, and then selling them the goods.