Google Takes Local Angle

A radio-driven, pay-per-call model is especially appealing, given that businesses on average end up paying $22 for each call they receive by listing in local Yellow Pages, according to Kelsey Group. And customers who actually pick up a phone to make a call are much more likely to be serious -- and hence valuable to businesses -- than those clicking on a Web link.

Google isn't alone in seeing the market here. Yahoo! said recently said it expects local advertising to be worth three times more than national advertising over the long haul. The new Project Panama platform that Yahoo! plans to introduce early next year easily can be upgraded to include pay-per-call functionality.

And when it comes to local markets, Yahoo!'s myriad media-company relationships may give it an advantage over Google's much more automated approach, which has otherwise proved so successful in broad markets.

However, Google's stable of power hires could help close this gap and set the stage for an "extension" of the search king's worldwide dominance into each neighborhood.