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Internet

Local guides look to long term

Almost daily, another company launches another local city guide on the Net, jumping into an intensely competitive market.

    Almost daily, another company launches another local city guide on the Net, jumping into an intensely competitive market. Today, Cox Interactive Media, a company using the Internet to leverage its other media brands, rolled out Access Arizona, a site geared toward users in the Grand Canyon state.

    Last month, the latest salvo in the war for the Big Apple went off when America Online launched its localized guide, Digital City New York, taking on several other large, established players.

    It seems everyone--from Microsoft and AOL to newspaper chains like Cox, local television stations, newspapers, and venture-backed companies like CitySearch--is in this game. So are the search engine companies, such as Yahoo.

    The promise has always been that companies will be able to get money from local business and companies wanting to use the Internet to advertise. Estimates vary on the precise figures, but industry watchers agree that there is a lot of money out there to be made, eventually. The question is when and how.

    The general consensus among analysts and those in the business is that the business is not mature yet and that there could be more than one player in each large market. But beyond that, the strategies for the long term diverge.

    "The maturation of this market is probably three to four years away," said Gregory Wester, director of Internet marketing strategies for the Yankee Group. "Consumers on the Internet today aren't value-minded enough to spend an adequate amount of time for these types of sites. People don't turn to the Internet for lifestyle ideas or day-to-day activity yet."

    But when they do--and they probably will--many companies will be waiting for their business.

    Sites such as Microsoft's Sidewalk have already gone through several changes in their short corporate histories in an effort to find that perfect balance between providing content and turning a profit.

    Some are predicting that newspapers and television affiliates, with their strong brand names in local markets, will be able to win the battle.

    Others are saying that well-known Internet companies such as Yahoo will do the job, and still others maintain that there will be many winners.

    For instance, Charles Conn, CEO of CitySearch, said that there will be several players for localized services that will cater to slightly different niches, just like radio stations target distinct tastes.

    "The economics look a lot more like radio than they do newspapers," he added. Conn noted that his company has had "explosive growth" and that some of its sites are at the break-even point.

    While CitySearch makes money by selling inexpensive Web sites to companies, others make money through ad sales and by pointing users to classified ad networks.

    It is not clear yet which model, if any, will work. The only thing that is clear is that anyone in the business has to be in it for the long haul.

    Take Cox Interactive as another example. Cox entered the market in part to protect its market share in the local areas, according to Marleen Burford, a spokeswoman for Cox.

    But ultimately, Cox's goal is the same as everyone else's. "We have a goal of making money," Burford said. "Cox Enterprises doesn't do anything that's a loss leader. Our business plan calls for a five-year plan to be in the black."