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I addressed the GeoDomain Expo last Saturday in San Diego and was struct how disconnected these local entrepreneurs were with the concerns of traditional media. They are people like Dan Pulcrano, who owns a few dozen primo domains such as SanFrancisco.com, Chicago.com, and Dallas.com, and guys like Mike Mannix, who with his wife runs Albany.com and Saratoga.com.

After I gave an inspirational lunchtime speech encouraging them to think big and to not squander their Park Place and Boardwalk properties, I sat in my hotel room and listened to a domain auction out on the lawn near Mission Bay. Minneapolis.net went for $6,250, BrooklynJobs.com went for $8,000, and LasVegasLights.com went for $4,500. But there were no takers for Longhorn.com (the opening bid was $35,000) and Carlsbad.com, a community near San Diego.

It struck me that these wide-eyed, generally inexperienced entrepreneurs are holding the deeds to small goldmines. They possess a prime slice of land but lack the experience and finesse to tap them.

It also struck me that no traditional media players were in attendance.

If only there were a way to match the two.

We’ve just completed some research on churn rates for Search Engine Marketing resellers, and it sure looks like this red-hot industry is about to implode.

First off, companies like Yodle and Local.com saw gangbuster growth last year with their “direct” programs selling SEM to advertisers. Yodle saw 700% growth, surpassing $20 million, and Local.com saw 71%, approaching $40 million. Even Yellowbook.com, a big reseller of search advertising, saw triple-digit growth last year (113%), surpassing $200 million in interactive sales.

So what’s the problem? It’s become a gold rush. There’s a whole cottage industry of what I suspect to be former Amway salespeople peddling SEM through some of the resellers like WebVisible, Marchex and ReachLocal. They’re damaging the industry by selling “buckets of clicks,” driving up the pricetag to advertisers to make their profits and disregarding the fact that click fraud runs anywhere from 17% to 28%.

Churn rates look to be at least 50% for some of the best, and close to 90% for many. Advertisers are dropping like flies because they’re being sold clicks, not results, or aren’t getting the level of care they need. If the industry doesn’t take this bull by the horns and force some reform, the resellers could ruin an otherwise viable lead-generation channel.

The news last week that WYOU-TV in Wilkes-Barre, Pa., shut down its local newscast underscores the fact that the real problem in local markets is that media outlets are oversupplying their communities with local “news.” The deluge of edited, polished local news is causing newspapers to shut down or cut back, and is now beginning to cause some of the third-rated TV newscast in many markets to fade to black while people’s attention is diverted toward a more interesting “W-YOU” – things like YouTube, Facebook and Myspace.

Don’t get me wrong — local news has its followers, and the audience is massive for newspapers and TV stations. In fact, the Internet’s hasn’t put a dent in people’s preference for getting local news from TV and newspapers. TV still remains the #1 source, and newspapers the #2, according to Pew Research. The percentage of adults getting news from those two legacy sources hasn’t changed much since the Internet came along. It’s just that people only want so much local news. A second major newspaper or a third TV station offering local news is about as useful as the left back pocket on your pants.

I’m still amused at the rush to put local news online, and the saber-rattling from publishers who threaten to charge for access to local news. Go ahead, charge for access to those stories. You’ll soon find what WYOU found – that there are many other (free) outlets for local news, and that someone else has already figured out that it’s not about YOU, it’s about THEM.

(See the story in Broadcasting & Cable )

On Wednesday, April 1, real estate Web site Zillow.com announced plans to launch co-branded real estate Web sites with 180 newspapers. The Zillow-powered Web sites will feature Zillow’s search functionality and feature content from Zillow such as advice, mortgage rates and other information. Newspaper sales teams will sell featured listings and premiere advertising inventory on the co-branded sites powered by Zillow.

I applaud the partnership, but it should have happened years ago. I’ve been watching the real estate vertical for over 10 years and launched the first newspaper/MLS partnership online back in 1999. Even back then I realized that of all the verticals this was the one that was going to get away from newspapers — even the newspapers online offerings were not going to be of much use. The vertical is too complex, extremely sophisticated and tightly controlled for anyone but pure-play operations to succeed. For a real estate site to thrive it needs a national presence, deep pockets and the very best of technology. And a damn good hook.

Both Zillow and Trulia have been able to leap forward in the vertical due to technological achievements and clever user-tools. They first and foremost built sites that were consumer focused. The ad model is now evolving and growing as newspapers realize they don’t own the verticals anymore.