Google Improves Local Search With Map Company Buy

Google announced its purchase yesterday of Keyhole, a mapping company that uses satellite photographs to produce three-dimensional maps, in a move that could bolster Google's local search capabilities. Terms of the deal were not disclosed.

The acquisition brings Mountain View, CA-based Google another means of search, allowing users to perform searches that give them a photographic view of a location instead of a static map. The maps are culled from a database of images collected by satellite and airplane. Searchers can zoom in to street level and use pre-set options to find local information, including parks, ATMs and businesses.

The mapping tool gives Google technology in an activity consumers prefer online to offline, according to Pew Research. Its survey found 87 percent of Americans have gone online for maps or driving directions. More than half of respondents said they rely on the Internet for maps and driving directions.

Mapping is critical to local search, since purchases are often made offline. Both Google and rival Yahoo have developed local search products. Yahoo has made mapping a central feature of Yahoo Local, which allows users to plot different businesses on a map in a function called SmartView. Like SmartView, Keyhole allows searchers to overlay two business searches on a map.

“This is probably a pretty thoughtful acquisition on their part,” said Greg Sterling, a local search market analyst at The Kelsey Group. “It's at least in part a response to SmartView, which has proven very popular.”

Google slashed the cost of Keyhole's consumer software, called Keyhole 2 LT, from $69.95 to $29.95. A free trial version is available at

A Google spokesman declined to discuss its plans for Keyhole, which is also based in Mountain View.

Google has moved well beyond Web search in recent years. Along with branching into related areas such as commerce and news search, the company has moved to organize everything from book contents to information on users' computers.

“Only a fraction of the world's information is indexed on our computers,” Google co-founder and president of products Larry Page said during a conference call last week with financial analysts.

Keyhole offers users the ability to search for businesses near a location, identifying them on a digital photograph of the area. Clicking on the listings gives the business address and a link for searching it on Google. The business search function draws the listings from a database of 5.8 million U.S. businesses from Acxiom. Keyhole does not carry advertising.

“It's another doorway into local search,” Sterling said. “It also could make the broader local application more useful and helpful.”

Founded in 2001, Keyhole was funded in part by In-Q-Tel, the CIA's venture capital arm. Its software has been used by CNN to illustrate what the U.S. military faces in Iraq. In addition to its consumer software, Keyhole sells a $599 enterprise version for businesses to use in planning and presentations.

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