Helping Local Businesses to Quit the Yellow Pages

As more people opt for the internet for gathering information about local businesses rather than reaching for the yellow pages, a number of business models are moving in to help local businesses get found.

One particular method that seems to be attracting a good deal of attention (and money) is the development of Search Engine Marketing firms geared toward specifically toward the local business, like Yodle and Reach Local. While distinctions between these two business do exist, the idea behind them is to help take some of the mystery out of search engine advertising for the small business by offering a user-friendly interface that helps everyone from a limousine company to a nail salon start a search engine marketing campaign across all the major search engines for a fee of a few thousand dollars a mo

nth (media included). Yodle goes so far as to create a series of page templates for the business that are optimized to generate calls. The VC community has responded positively to these efforts, with Yodle picking up $12M in funding in late 2007 and ReachLocal picking up $55M a month earlier, valuing the company at a hefty $305M.

Another way in which business are reaching out to the community is by letting the community do the work for them. Yelp.com is a citysearch on steroids, allowing (and encouraging) users to rate note only their favorite restaurant and watering hole, but also their dry cleaner, hardware store and virtually every other category of business available. Personally, i've used it to find a good tailor. Yelp is free to the user and to the business, with display advertising seeming to make up the revenue stream for the site.

And of course Google is on the act as well, using an army of door-to-door salespeople to sign up local businesses in its 'Local Business Referral Program." While definitely has the advantage in this effort due it size and reach, it appears that the ingenuity of the start-ups may make it a fight. And besides, Yelp uses Google maps, and Yodle/ReachLocal direct businesses to buy ads on Google, so they are making money regardless.