Yahoo! Navigates Local Search Deal

Google(GOOG - Cramer's Take - Stockpickr) may be the online search king, but Yahoo!(YHOO - Cramer's Take - Stockpickr) is getting the first-mover advantage in at least one emerging business: portable car navigation systems.

Yahoo! has partnered with Mountain View, Calif., startup Dash Navigation to bundle its Yahoo! Local search into Dash's navigation offering to let users search for services or businesses from their cars.

"It makes sense for Yahoo! to find some territory where it has the high ground," says Roger Kay, founder and president of IT market research and consulting firm Endpoint Technologies Associates. "We are still in the early stages of GPS-based services and products, and this is Yahoo! trying to stake a claim in a market that is fast-developing."

Shares of Yahoo! were recently off 13 cents to to $25.41.

So-called location-aware services have captured the attention of cell phone service providers. But the GPS industry remains an open ground with few add-on services currently being offered.

With the combination of Yahoo! Local and Dash, local search in the car would become a reality. Users could enter a search term into their Dash navigation system, and the device would wirelessly conduct a Yahoo! Local search on the web and present results to the users.

The idea clearly could capture user attention. For instance, a Dash user on the road looking for a Chinese restaurant only has to key in the term on the system to find a list in the area. In many cases, users will also get Yahoo! Local ratings and reviews presented.