I was discussing Virtual Earth at work today and then we got onto the topic of why everyone is putting so much effort (read: $$Money$$) into Maps.

Coincidentally, I came across this post shortly afterwards which seemed to cover many of our discussion points. I’ve seen and run numbers similar to this such as at Kelsey Conferences and some may even call the numbers conservative.

Here’s what the article may imply but doesn’t say: the advertisers simply represent one side of the equation. You need eyeballs looking and clicking on the ads…you need traffic. Building compelling products helps gain that traffic…even if it is at a loss (for now). It’s all about capturing market share and/or building a killer app that increases overall usage (increase total market size). Yahoo!, MSN, and Google have all provided developer APIs which allows their maps to be utilized on others’ sites. Check out what Google states:

Google reserves the right to put ads on the map in the future, and you may not alter or obscure these either.

…and Yahoo’s API basically works by providing them an XML page and they host the end-user page on their own site (which means they control everything surrounding the map as well…including ad placements.

Think about how many sites you visit that are not (at least overtly) local (standard web search, dictionaries, product review sites, and other online/virtual sites). Now think about how many of them are local (especially before these maps products were created) such as maps/driving directions, movie times, etc. How often do you visit each. In my opinion, they are much more heavily weighted towards non-local sites. More traffic needs to be captured by local ad engines in order to deliver locally-targetted ads.

There are many sites out there choosing to accomplish this in different ways. In this case, they want to do this with killer map applications. There is also the possibility of trying to decipher non-local traffic into local traffic…if you search for “chicago weather” in Google, for example, although you have gone to a web search, you have added a location modifier. This could, however, prove to be challenging since location modifiers can be almost anything: cities, postal codes, landmarks, “quasi-cities” (a term I am using to signify a non-official place name such as “west side”), etc. Most search engines have already begun doing this by deciphering city names and providing you weather, for example, in the “chicago weather” search.

This lack of consumer traffic is why you see things like this.

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