One large difficulty facing web startups relying on user-generated content is the chicken-and-egg problem of creating both the content and an audience. Without people creating/sharing material, there’s no reason for people to surf the site; without traffic, there’s little reason to contribute.

As I’ve written before, different content types require different levels of contribution before the offering as a whole delivers tangible value. Photo sharing sites, for example, don’t need a large number of contributors before the content contained within is worth viewing. On the other end of the spectrum, however, are local yellow pages and directories. These sites necessitate both a wide and deep contribution-level before the service is a go-to destination for such information. Once this magical level of “critical mass” is reached, a virtuous cycle of audience and content-generation follows.

So what’s a company stuck in this situation to do? One way to prime the pump is to in effect pay users to contribute. Judy’s Book rewards users with a $5 coffee card and for adding five posts and gives them an iPod Shuffle for writing 50 reviews and inviting ten friends (aiming at both sides of the equation). It’s appealing to explicit & external rather than the intrinsic rewards for creating material.

Unfortunately for startups, the large portals and established internet players have a leg up because they already posses an audience. (Yahoo Local just relaunched emphasizing user-generated content and already has some good user-written reviews of restaurants.)

But my favorite example of seeding user-generated local content just came last from Amazon. When I opened my inbox this morning, I found an email entitled, “Tell us about Masthead Venture Partners”:

Dear Amazon customer,

We want to introduce you to the new Amazon.com Yellow Pages!

We are sending you this email because you recently shipped an Amazon.com purchase to the location of Masthead Venture Partners. You will find Masthead Venture Partners listed in the Amazon.com Yellow Pages because we have provided a free business listing to them.

We are asking business owners, employees, and customers to submit more information about businesses free of charge, so we can help businesses and customers find each other. Last year tens of millions of customers conducted a shopping transaction on Amazon.com, so we know this will be a powerful tool for business owners and consumers alike.

You can help improve the information of Masthead Venture Partners now!

* Tell us more about the business:

* Upload your own custom pictures of Masthead Venture Partners:

* Write a review!

Check out the current free business listing and see how you can make it better!

By taking a moment to tell us more about Masthead Venture Partners you can make the business listing more attractive to potential customers.

Thank you for using Amazon.com Yellow Pages!

Sincerely,
The Amazon.com Yellow Pages Team

Specific, targeted, personalized direct marketing – now that’s a great way to seed user-generated content. I think Amazon was very clever in realizing and capitalizing on the asset list that it already owns.

(Yes, this communication could be construed as spam-like and alienate some customers. I hypothesize that a cross-functional e-mail like this one sparked internal debate in the company.)

As user-generated content continues to become increasingly important, I think we will continue to see new and innovative ways to spark both an audience and material for that audience.