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Forget the usual dreary image of guides and telephone directories: local information, including maps, has suddenly become big business.
Some big global technology companies see the provision of local, geographically based information as an important business trend: two personal navigation-device makers are battling to buy the Dutch digital mapping company Tele Atlas for nearly $3bn (£1.5bn); Nokia has just bought the US’s Navteq for $8.1bn; maps have become a big part of Google’s business strategy.
At the smaller end of the scale, three privately owned UK businesses – 192.com, Touch Local and Multimap – which focus on providing maps and local directory information, are trying to capitalise on the new interest in their sector. They believe there is room for some minnows alongside the leviathans.
“Five to eight years ago the technology behind these kinds of sites cost so much that only big global companies such as MSN or Google could afford to set them up,” says Alistair Crawford, founder and chief executive of 192.com. “Now small UK-based companies can buy the same infrastructure for not very much money, and companies that can really leverage local data are coming to the fore.”
Mr Crawford believes 192.com can compete because it offers a unique depth of information. The website provides everything from phone numbers to births, marriages and deaths records, street maps and company accounts in the UK.
“You can not only find the number for the plumber, but you can see the house he trades from and the turnover of his company,” Mr Crawford says.
Tamer Ozmen, chief executive of Touch Local, also believes a deep, local focus is crucial to its success. Touch is attempting to be a hybrid of an internet directory service for the UK’s hundreds of thousands of small, local businesses and a social networking site, where communities of local people can swap tips on tradesmen and other businesses.
Multimap, on the other hand, is not just focused on the UK. It provides maps of about 48 countries to both internet users and businesses such as Lastminute. com and Ford. Like the others, however, Sean Phelan, Multimap founder and chief executive, believes it is the depth of information the company has built up since it was founded in 1995 that will count.
“The secret of success is: start 12 years ago,” he says. It would be difficult to replicate Multimap’s data, he says. It is not just about getting a map of say, Thailand, but understanding how addresses in the country work, how streets are laid out. This is information painstakingly gathered either from local staff or huge databases. “Internet users are less tolerant of inaccurate or shoddy results, and the challenge is staying relevant,” says Mr Phelan.
All three businesses are used to challenging bigger rivals.
“Ever since we started, every year we have been told that someone would bury us,” says Mr Phelan.
Mr Crawford is particularly used to David and Goliath battles. Ten years ago, the business – then called i-CD – set out to offer information from the electoral roll on a £20 compact disc. Before that, getting a look at such information had cost far more. Much like Google’s Larry Page and Sergei Brin, Mr Crawford had the idea that information should be free – or at least cheap.
BT and Royal Mail, which had a tight hold on telephone and address details, were not impressed with his vision. First, Mr Crawford spent a year fighting BT through the telecoms regulator to get access to its phone book information, and then in 2002 he was sued by Royal Mail, which claimed sole access to use of the postcode. Two years and £1m later, Mr Crawford prevailed.
Each of the three entrepreneurs has faced difficulties in building their businesses, with many changes of business model.
Touch Local began in 1994 helping small local businesses market themselves by offering coupons and loyalty cards. It later expanded into providing local business directories, and put these on the web in 2001.
Mr Phelan, meanwhile, founded Multimap with the idea of putting GPS (global positioning system) map information on mobile phones, but then shelved the idea to concentrate on the internet, which was where most investment was focused in the late 1990s.
It took until 2003 to get Multimap to profit – and although it now employs 120 staff, gets 10m unique visitors a month to its website and expects £12m in revenues this year, it made only a modest pre-tax profit of £877,000 in 2006.
Still, it is the most profitable of the three; 192.com returned to profit with earnings of £500,000 last March after years of heavy investment, and Touch Local is sustained by a £7m investment made by Balderton, the venture capital company, in 2005.
All three are careful about costs, including advertising. For one thing, they feel they cannot compete with the deep pockets of larger rivals such as Yell, which spends tens of millions on advertising each year. There is also a belief that a good local internet business will spread by word of mouth.
Touch Local’s salesforce visits chambers of commerce around the country to show what it can offer local businesses. Multimap goes to trade shows for the travel and property sectors to show the specialist audiences how they benefit by having their information linked to a map.
All three entrepreneurs are positive about their prospects, but admit the road ahead for them as independent companies is not clear.
Mr Crawford says he has been reluctant to sell 192.com until he finishes building the company as he planned. However, his vision is set to be realised within the next six to eight months, and he is itching to devote more time to new ventures, such as Passado, a Spanish social networking company he recently set up.
For Touch Local, which is majority-owned by Balderton, a float or trade sale is likely eventually.
As for Multimap, Mr Phelan is careful in his choice of words when outlining the future. He believes the industry will divide into a handful of global operators and one or two local ones in each country. “There will be a small number of global full service [digital map] providers and Multimap’s technology and people will be part of that.” His wording implies that Multimap, as an independent company, may not be.
“As a typical entrepreneur, I must be looking for some kind of exit,” he adds. It remains to be seen whether his maps can help him find it.
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