Spread the Mojo: San Diego Web Startup MojoPages Gets Real World Advice on Building Communities to Review Local Businesses
One advantage of attending a presentation at the San Diego MIT Enterprise Forum is that the people who ask questions are a lot smarter than I am. And so it was Wednesday night, when MojoPages founding CEO Jon Carder laid out the strategy of his three-year-old San Diego Internet startup.
MojoPages, which got $5 million in a Series A venture round almost four months ago, is Carder’s third Internet startup. “Mojo has that kind of sexy sound to it,” he told the audience. “Either Austin Powers or The Doors, depending on your generation.”
The Internet company’s core business combines a searchable online business directory with a social network that provides consumer reviews of local merchants, restaurants, service providers, and other businesses. In addition to collecting reviews, Carder says MojoPages’ “people-powered” technology provides rankings for local businesses by analyzing the reviewers and using an algorithm that weights each reviewers’ credibility.
Carder told the audience that “local search” already is a $7 billion market in the U.S., and just over half (54 percent) of Americans now use the Internet instead of a Yellow Pages phone book to search for everything from dentists to hair stylists and mechanics. Like Google and other search engines, MojoPages makes money by selling pay-per-click “sponsored ads” that highlight the top three business listings under various search terms. Carder says MojoPages also generates revenue from $40-per-CPM advertising (click per 1,000 impressions), and generates revenue from advertising partners like Citysearch and Ingenio, a pay-per-call advertising network owned by AT&T. According to his business plan, MojoPages will reach profitability in 2011, with 766 websites generating revenue of almost $1.3 million.
Carder said he views Yelp, the San Francisco-based Internet business founded in 2004, as MojoPages’ main competitor, but he adds that MojoPages is differentiating itself in a variety of ways. One significant difference is that MojoPages is pursuing a “white label” strategy that involves forming partnerships with existing major media companies—primarily TV and radio—and creating websites in local markets under their brand names. As part of its partnership deals, which encompass more than 1,000 local media outlets, MojoPages gets to advertise for free in conventional broadcast and newspaper publications. Carder says the arrangement will eventually amount to a nationwide media campaign worth “hundreds of millions of dollars.”
“We have a really compelling argument with these media companies,” Carder said. He explained that MojoPages’ timing was “perfect” because traditional advertising revenue is declining for conventional media companies, and they’re eager to find new sources of revenue. But the prospects of a nationwide advertising windfall also raised a key issue for MojoPages, which Carder raised during the event: How can MojoPages, which currently has just 19 employees and no experience with conventional media, best use its hundreds of millions in potential advertising to attract new customers?
The MIT forum asked three local Internet market experts to help Carder think through his strategy: Reid Carr of Red Door Interactive; Susan Huberman of MOD Consulting; and Jason Knapp of the Fox Audience Network, a division of News Corp. that manages all display advertising for MySpace.
The panelists first peppered Carder with a lot of questions about MojoPages’ media partnerships and the quality of the advertising: Are you getting prime time advertising or “remnant” time? (Great question, Carder replied. He thinks he’s getting some of both) Just how committed are the 1,000 media partners to MojoPages? (Only San Diego’s KFMB and 17 TV stations owned by Texas-based Belo are committed, Carder said. The other 983 apparently are waiting to see what kind of traction MojoPages shows with its early media partners.) Is the goal to promote Mojo’s brand name or to drive Internet traffic to its media partner websites? (It’s “absolutely to drive traffic to local media search websites,” Carder said.)
In one of the rare disagreements during the evening, Knapp told Carder, MojoPages would have more success co-branding with its media partners, while Huberman countered, “You have to control your own mojo.”
Huberman also asked a question that touched on the second key issue that Carder brought to the MIT Enterprise Forum: How many registered users does MojoPages currently have? (About 40,000, Carder answered, conceding, “Our community is very ghost-townie.”)
Carder said MojoPages’ workforce has been mostly focused on developing its search and business-rating technologies, and on search engine optimization, or SEO. As a result, the second key question that Carder brought to the event is: “How to attract and retain online community members that will contribute reviews and spread the gospel of Mojo?”
Carr suggested that MojoPages could build its community by reaching people in the online communities they already are in, including Local.com, Citysearch, SuperPages.com, Facebook, and MySpace.
Huberman offered Carder a variety of advice on amassing a Web community: Of the 40,000 users you have, she told Carder, you need to figure out, who are the MojoPages power users? What makes them tick? What are their demographics? And how can you clone them? She recommended that MojoPages work with businesses to create incentives for users to write reviews, so for example, if you write a review about a salon, you get 50 percent off your next spa treatment. Another technique for building traffic, Huberman said, is to “incentivize users,” for example, by offering discount coupons to users who sign up 10 friends.
Creating such incentives, though, will require working closely with local businesses. Carder agreed, saying, “I think the business owner is going to be the biggest contributor to our success.”