VentureBeat

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.

Edgeio, a Menlo Park start-up trying to redefine the way people list classifieds, has raised $5 million in a first round of venture capital, and may raise more. Here is the release.

The round was led by Intel Capital and included an investment from Transcosmos.

The idea behind Edgeio is audacious because it seeks to do an end-run around the incumbents like Craigslist and others, by letting people bypass them entirely.

But in a notable development, some of big players — eBay, Cafepress, and Amazon — are agreeing to play along and are sending their listings to Edgeio to make sure they are included there. Edgeo says it is compatible with these services because it only lists a small excerpt of their classifieds, and users clicking on them will be sent back to the originating site.

Now the question becomes whether Edgeio has folded its end-run strategy too early — agreeing to play with the big boys, and thereby allowing them to co-opt Edgeio by keeping their users to themselves. But Edgeio is betting that becoming a “meta” classifieds site will make it a superior search engine in the long term.

Here’s how Edgeio works: It lets people, from the home owner listing their home, to a car owner selling their car, to post their listings on whatever Web site they want — their own blog, for example — and Edgeio then goes out to find it and lists it at its own site automatically.

It can do this only if people tag their classified listings with the word “listing.” Edgeio will then add it to its database. If you’ve added other tags for the item (e.g., “San Francisco” and “Porsche”) these give Edgeio a way of classifying the ad in the appropriate category on Edgeio’s site. Directions are on the Edgeio site.

We first wrote about Edgeio here.

We just talked with Keith Teare, chief executive, after testing the site. We found the interface experience somewhat clunky, in part because the home-page is still focused on attracting people to list their classifieds there. The site will soon cater more closely to people searching for goods, Teare said, something he agrees has been neglected.

One notable development is that Edgeio has moved up in the organic search results at Google. So if you type in “2007 autos,” Edgeio has the third entry in the results. If you click on the link, Edgeio will take you to the page with its 2007 autos listings.

If you specify a city or zip code, Edgeio will show you the 2007 autos for that region. If there are none, it will show you those closest to your region.

This has opened opportunities for advertising revenue for Edgeio, since some local advertisers will advertise on these pages. So far, it has Google ads. (Below is a partial screenshot of Edgeio’s page for autos in Fremont, Ca).

Now that Edgeio is working with eBay, Amazon and CafePress, it will get paid a referral fee if the traffic it redirects back to those sites’ classifieds ends up in a sale, Teare said.

Teare is also developing a way to help blogs or other focused sites to create their own marketplaces, he said. A blog focused on BMWs, for example, could draw on Edgieo to list BMWs and other BMW components, and earn a cut in revenue on any sale.

Edgeio has launched a Chinese site, and filed a patent for its technology, Teare said.

More than 3000 publishers have uploaded their listings to Edgeio, he said. Since launching six months ago, he says Edgeio has more than 100 million listings from more than 14,000 cities in 130 countries.

The Chinese version of the site is named site named mulu100.com (which in Chinese means catalog of catalogs).

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.

Yelp, the Web site offering user-generated reviews of bars, restaurants and other places, has raised $10 million in venture capital from Benchmark Capital.

We recently mentioned Yelp’s wave-making with its parties.

Yelp, like other recent Internet companies, is challenging incumbent sites like Citysearch by developing a community of local reviewers. By encouraging loyalist users to review often, Yelp bets its site will be fresher and more compelling.

It is noteworthy that the venture money comes from Peter Fenton at Benchmark. We recently featured Fenton’s argument that companies should only get funding after they’ve achieved some traction with customers. Yelp had 1.5 million unique users in September, a 200 percent increase from January, the company says. So it fits in the “post-adoption” category, Fenton told us today.

Fenton will join Yelp’s board.

After launching initially in SF, the SF-based Yelp has since launched in Boston, Chicago, Los Angeles, New York, San Jose and Seattle.

Yelp’s other investors include Bessemer Venture Partners and PayPal Co-Founder Max Levchin.

Rather than unleashing armies of people to go out and build a massive repository of reviews, like Citysearch did, Yelp has managed to build a local community that keeps reviews fresh, giving Yelp a more lively feel, says Fenton. And with more reviews, you can begin to parse them in different ways — for example classifying them to show which one are written by 20-year-olds, and which ones by 40-year-olds. That way, users can judge reviews based on their preferences.

Fenton said he made the decision to invest after talking with several locales, including Quince, a restaurant in San Francisco. He asked the waitress if she’d heard of Yelp. “Have I heard of Yelp?,” she asked. “I obsess about Yelp.” Fenton said she described in detail a negative review, and remembered the date the customer visited, and what went wrong that evening.

Fenton says $14 billion is spent each year on yellow page advertising every year in the U.S., and that he Yelp can make money by getting advertising on its sites from local establishments. Yelp is not yet making money.

The company had raised $6 million previously.

When asked about the girl-kissing-girl photos appearing from a recent Yelp party, chief executive Jeremy Stoppelman said the actions weren’t staged, and that the photographs underscore the “festivities and celebration and excitement going on in the valley” right now. The parties help to drive Yelp’s community building, he said.

Besides Citysearch and Yahoo Local, there are also new competitors like Judy’s Book and Insider Pages. Stoppelman said that the relative depth of Yelp’s community is what encouraged Benchmark to invest.

Forbes’ Erika Brown has a good summary of how Silicon Valley has turned into a mini Hollywood.

She recounts the escapades of Russel Simmons and Jeremy Stoppelman, co-founders of Yelp, the local social site for reviews of bars and restaurants, who hold parties (see pic) with inebriated young women hanging over them, including a “Yelp Elite” mixer at the San Francisco’s Museum of Modern Art ending in a girls-only kissing orgy. When asked where they want to be in five years, Stoppelman responds: “Sitting on top of a pile of money … [in unison with Simmons] … surrounded by women! Yeah! [high five]”

There is the book party hosted by billionaire Larry Ellison for political pundit Arianna Huffington at his swank San Francisco pied-a-terre. Nick Douglas, writer of the valley’s gossip site, ValleyWag, attended the soiree and wrote a column about it the next day, griping about his treatment by Google co-founder Larry Page and his girlfriend. There are Valleywag’s “Hotties of Web 2.Ooh!” contests, etc, etc.

Erika concludes:

I’m reminded of a scene from Almost Famous, a movie about an aspiring reporter who writes about an up-and-coming rock band. A crusty old journalist advises his teenage protégé: “You cannot make friends with the rock stars … They’ll buy you drinks, you’ll meet girls … I know. It sounds great. But they are not your friends. These are people who want you to write sanctimonious stories about the genius of the rock stars, and they will ruin rock ‘n’ roll and strangle everything we love about it … and then it just becomes an industry of cool.”

Most of the action is moving up to the city in San Francisco, leaving the more staid region to the south — the traditional “Silicon Valley” as quiet as ever.