Local Search, Start-Ups, SEO & the Big Enema

Recently there has been a good deal of prognostication on the fate of start-ups in the wake of the current economic enema.  And while things are definitely getting tighter and companies are getting more cautious with their spending, I have a suspicion that local/SMB oriented Web start-ups might have a slightly easier time of things.

It’s not that local companies won’t have a hard time raising money or generating revenue (particularly from SMBs that are having a hard time themselves), it’s just that the market is so massive and the offerings so fragmented that it seems like there is still a lot of green field, even in a down market.

A couple of data points with zero statistical significance (but hey this is a blog so if I say it’s a trend then it’s a trend):

– Citysquares, yet another IYP with reviews that sells ads to SMBs, got funded yesterday (by a pair of mavericks no less).

• I had a conversation with a local flooring retailer yesterday.  Business is down dramatically, but they are closing 30% of leads they are generating via search engine advertising and SEO at an average sale of $400.

• I spoke with a start-up this week that had just laid off part of their staff to conserve capital over the next year.  SEO, and local SEO in particular, was now one of their top priorities.  While their business was not necessarily local in nature, they and their board saw the opportunity to more effectively compete at a local level v. trying to duke it out nationally and internationally.

• I have spoken with several local-oriented SEO consultants and SEM consultants over the past week about market conditions and none of them have experienced a slow down in client activity or inbound referrals.  The consensus appears to be that SEO is one of the better bets when it comes to marketing and it’s the one that everyone had been putting off as they blew through their budgets on PPC and other media.

While start-up activity may be depressed over the next couple of quarters, I do expect to see more dollars thrown at local and SEO.  In fact I wouldn’t be surprised to see a number of locally oriented SEO startups start to pop up to compete with the crop that have emerged over the past year.

I realize I am just a big cheerleader for SEO (baby does need a new pair of shoes after all), but while I don’t expect SEO to be immune to the big enema, it does appear to be a relatively unconstipated area of the economy.