Google Makes a Splash in Local Search

Google has launched a beta version of a local-information search engine, highlighting growing interest in the still-nascent local search market.

The local service started up last Tuesday at the Web address , after a few months of semipublic experimentation.

The search engine -- which combines local business listings, maps and Web sites related to the local listings -- represents Google's most advanced effort so far to capture advertising dollars that might be spent by small, local businesses online.

Though Google Local is officially listed as a "beta," one Google executive indicates that local search isn't simply an experiment for the company. "I think we see local as a core component of search," says Sukhinder Singh, general manager of local search for Google.

And while there's no advertising on Google Local, that's only a temporary condition, Singh says. "We do envision over time using AdWords," she says.

Google and other companies are addressing a real consumer demand for local information online, says Greg Sterling, a program manager with the Kelsey Group research firm, which studies yellow pages, electronic directories and other local media. In a survey of online buyers announced last month by the Kelsey Group and, one in four online searches were an effort to find a merchant near the searcher's home or work. Some 44% of respondents said they were doing more local commercial searches than they were a year earlier.

"My initial reaction is, it's a strong entry into this market," says Sterling of Google Local. "There are bugs. There are quirks. They're going to need to address those on an ongoing basis. But it's something many users will find valuable."


Like Yahoo! ( YHOO) and other companies in the paid-search business, Google sees local search as a potentially huge opportunity. Piper Jaffray last year estimated that the market would amount to $4 billion in 2007. The market likes the Net search business too, judging by the recent surges in stocks such as AskJeeves ( ASKJ) and ( MAMA).

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