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).

One potential pot of gold is the $15 billion that advertisers now annually spend on print yellow pages. But to get a piece of that, Google and the other companies have to get people in the habit of turning to the Internet, not the phone book, when they're looking for listings like a local plumber or carpeting retailer.

They've also got to lure the advertisers, too, after several less-than-successful attempts over the past few years to crack open the local market.

Though Google is privately held, its revenue prospects should be of key interest to investors. Not only is it battling Yahoo! for supremacy in the search engine and pay-per-click ad business, Google is also widely expected to file to go public this year. Google's revenue -- derived from its AdWords program enabling companies to key their advertisements to words typed into a search engine or editorial content on a Web page -- hasn't been publicly disclosed.

Like the flagship Google search, the Google Local Search page presents a simple box for users to type in what they're looking for. But, with the help of another box for indicating the relevant address, city or ZIP code, Google returns relevant business directory listings in that area, along with Web sites that its computers deem relevant to those listings.

In addition, a mapping option lets users see where one or several businesses fall in a particular geographic area.

A recent noteworthy development on the local front at Yahoo!, says Sterling, is its introduction, announced earlier this month, of maps with what Yahoo! calls Smart View. Among other features, that enables users to see points of interest pop up on a map when they pass their cursor over a relevant area.

With Yahoo!, Google and other companies providing local information online, says Sterling, consumer use should increase. "All of these sources should cause more local searches to happen on the Internet, because now people know you can do local searching on the Internet," he says. "You can find local information on the Internet."

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