Local Search Market to grow hugely

Posted on February 24, 2006
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The global online local search market, which includes Internet Yellow Pages, local
search and wireless, is set to grow from the $3.4 billion it brought in
last year to nearly $13 billion by 2010. That’s according to a new
forecast by the Kelsey Group.

The company’s report projects a 30.5 percent growth rate over the next four years.

By contrast, print Yellow Pages revenues are forecast to increase just 1.5
percent to reach $28.4 billion over the same time period. But Kelsey
Group analysts don’t see online Yellow Pages taking market share from
their print counterparts.

“I think there’s going to be some substitution, but it’s mostly going to
be incremental growth,” said Greg Sterling, SVP and program director of
interactive local media, for the Kelsey Group. “A lot of the dollars
that are going to happen will not be a direct substitution. The area
we’ll see the greatest erosion is in the classifieds.”

Online classifieds will continue to grow while offline forms decline slightly,
despite the fact that Craigslist-like “free” models limit revenue
growth online. Kelsey Group doesn’t separate online and offline
classifieds, but expects that across the board, classified advertising
revenues will drop a fraction of a percent from $79.5 billion in 2005
to $78.5 billion in 2010 globally.
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