VentureBeat

Online local community site, Smalltown, is starting to think bigger picture. Today, the service launches a new site, Webcards.com, to simplify advertising campaigns over multiple platforms. The idea is still to focus on small local business, but to help these companies easily expand to the Internet at large.

Webcards (the product) have actually been a part of Smalltown since the site launched in October of 2006. Now, however, with an extremely easy-to-use online builder, users can create their own in a few easy steps. Even if businesses are based in a town that doesn’t have a Smalltown community (the service is still only confined to the Bay Area), they will now be able to make these cards.

I met with Smalltown founder and chief executive Hal Rucker who explained to me that a Webcard can be thought of as a Flash widget that can be embedded in any webpage. One of the major benefits of this embedding is that when you change your Webcard, it changes across all the sites it’s featured on. An example usage for such a feature would be a company coupon or promotion that was constantly updated.

I did a walk-through for creating my own Webcard, it was seamless and extremely simple. Utilizing the Webcard Factory, users can have a card ready to go in as few as ten minutes. Rucker expressed that simplicity was important because so many small business owners in these smaller communities do not have the time or quite often the patience to sit through making an extensive advertising campaign.

[Above: a Webcard]

The eventual idea behind Webcards.com is that Smalltown will see which areas people are using the service the most. These areas will then be considered prime targets for expansion of the Smalltown brand itself.

That will be the big question. Will users outside of Smalltown’s Bay Area constituency use the product? Initial launch integration with services YellowPagesLive, Trulia and WebVisible should help the service gain some traction.

Mixpo is one competitor in the small to mid-sized business online advertising game, however it is much more focused on video rather than card-based dynamic information.

Smalltown raised a $3 million Series A round of funding back in 2006 from Formative Ventures. It followed this up with a Series A extension for an undisclosed amount. There is some thought about a Series B in the coming Fall depending on how things go with the new Webcard product.

Despite the meltdown and slow death of a local community news site BackFence, the local market continues to draw interest.

Last week, the hyperlocal news and blog site, Outside.in, raised a $1.5 million second round of funding and a month ago, American Towns raised $3.3 million. Yahoo and Google, despite offering more sophisticated local results, haven’t yet created vibrant communities. Yelp, another locale listing site, hasn’t sewn up the market either.

Today, Smalltown, a site that helps small businesses in a few Bay Area towns create a presence on the web, said it has acquired a small site called Local2Me for an undisclosed amount. Local2Me has been around since 2000 and is essentially a Yahoo! Answers for small communities in the Bay Area. People ask questions — mostly about local businesses — and neighbors offer advice, free of charge. At around 8,000 active users, Local2Me is tiny, but this small, dedicated user base has produced a fair amount of content that fits in with Smalltown’s focus on local merchants.

The deal’s scale was also tiny, and may be indicative of the slow pace at which the hyperlocal market seems to move. It’s not yet clear how these companies will generate the kind of returns that venture capitalists tend to expect.

Smalltown is based in San Mateo, and last year raised $3 million from Formative Ventures.

Smalltown, another company seeking to offer a Yellow Pages-like service with a more compelling online experience and community feel, is expanding to cover more cities.

The site launched in the cities of Burlingame and San Mateo in October, and now claims 3.5 percent of populations of those two cities visit its site at least once a week. That may seem small, but this isn’t bad for five months work. The Mercury News, by comparison, enjoys about 25 percent “penetration” in Santa Clara county, down from 45 to 50 percent in the 1970s, and it has been around for more than a hundred years.

VentureBeat wrote an extensive review when Smalltown launched, and pointed to a screencast about how it works. It takes a small time investment to learn how to use Smalltown. Store merchants can pay to upgrade their listings, and local residents can write reviews, leave messages and ask for tips.

Tomorrow, Smalltown announces the coverage of Foster City, Belmont and Millbrae. It also launches a “reply back” feature, which sends an email alert to merchants when someone posts a review on their listing page. Smalltown has also added the ability for people to — surprise! — upload video.

Smalltown has $3 million from Formative Ventures, and its expansion stands in contrast to consolidation happening elsewhere. Insider Pages, which offered local listings was struggling, and was just bought by CitySearch. Also, Smalltown has hired Daniel Payomo to run its sales efforts. Payoma, who has worked at several media companies, including Knight Ridder, was recently at Backfence, another community start-up that just laid off some workers.

InterActiveCorp is about to unload a local information and entertainment service, apparently named “Ask City,” and it’s about time.

IAC is an Internet media conglomerate headed by Barry Diller, and it plans to introduce the local site next week, combining Web search, city guides, maps and event listings and tickets, a move that appears to finally combine the company’s assets in a logical way.The new Web-based city guides, scheduled to start Dec. 4, will be followed later in December by a redesign of the Ask.com search service, according to the NYT. This is an obvious thing to do (the company owns Ask.com, CitySearch, Evite and TicketMaster, among others), and we hope it is good. Lots of companies have been biting off little pieces of this strategy (Yelp, Smalltown, JudysBook, BackFence to name a few) but none of them have the same breadth in this area as IAC.

Updated

New start-up Smalltown is going after the local business listings market with an ambitious, focused social network model. It has a charming “smalltown” feel, and seeks to build a community of users around those listings. This company will be one to watch.

It launches today (Tuesday). It has received $3 million in venture capital from Formative Ventures.

Founder and chief exec Hal Rucker gave us a demo of the site. It aims for comprehensive listings of businesses, and has a hyperlocal feel. It is designed to give each community its own look — more so than other local social network/listing sites, such as Yelp, InsiderPages, Judy’s Book or BackFence. (See image at bottom of this article for market positioning).

Smalltown is useful because half of all businesses still don’t have their own Web site. And half of the businesses with Web sites haven’t changed them since creation. Smalltown gives even the tech-phobic business owner easy tools to update their site on the fly — they are handheld by a wizard.

Smalltown is so comprehensive, and so orderly, in fact, that we’re on the fence on deciding whether it will be a spectacular hit, or suffer from requiring too much investment of time, and therefore not reach its full potential.

Smalltown has started out smart, by focusing on one small town in Silicon Valley: San Mateo. It will build out from there.

There are three main features to Smalltown. The best way to follow along is to read these feature descriptions, and then to click on the video image here to see a screencast.

1) Smalltown has designed a so-called Webcard for every business in San Mateo, from the pizza joint to the guitar shop. You can consider Webcards mini-web pages. These Webcards can be searched, so that if you search for guitar shop, the Webcards for guitar shops will come up. These Webcards are essentially company “listings.” They make up the Yellow Pages-like feature of Smalltown. The default is a basic, non-paid Webcard listing. This basic card has lots of company information, such as photo and address. Paid Webcards, where businesses pay Smalltown $40 a month, allow even more information: Businesses can add things like links, menus, galleries of photos and so on. These paid listings are highlighted in gold, so the user can tell.

2) Webcards can also be built for reviews, too. So if a person wants to review a guitar shop, they can create a Webcard to do so. When you search for guitars, you see the listings in a tab, but you also see the reviews in a separate tab.

3) Webcards are also for discussion. You can create a Webcard to talk about anything, such as responding to someone’s request for information about where to buy guitars, or to sell a product, or to mention an event that is happening in your neighborhood. You can attach these reviews to listings or to reviews, or to other people discussing things. You can insert links in them, and create separate tabs in them to hold all kinds of information. They’re searchable in the search bar.

The screencast above will give you a good look and feel for how Smalltown works. You may find the first minute slightly jarring — it takes a while to get used to Smalltown’s unique visuals. About a minute into the screen cast, at the “cheeseburger search,” you’ll start getting it.

Smalltown is designed to allow you to discover things in your local community; it has designed a balance of free and commercial. There are no paid-for-placement features, and no traditional banner ads. It is family friendly. It is entirely Flash based, and has a quick but insulated feel to it. But each Webcard has a unique URL, and so they can be searched from outside, and linked to. One unanswered question is how much control Smalltown will give to the local administrators it will hire to run local sites. This is important because that person can choose what pages are featured on the front page. Rucker says he’s also still thinking about how much to open local sites to national advertisers who may want to create their own Webcards in a community.

There are other features, such as the ability to drag Webcards to your favorites.

Smalltown has a patent on Webcards. Rucker has a background in user interface design, having run his own company Rucker Design Group. He designed parts of the WebTV, Placeware and Ariba sites. The company has eight employees.