Yahoo! Offers Free Sites to Small Businesses

Yahoo is offering every small business with a physical U.S. address a free, five-page Web site, the company announced today. Those sites will automatically be integrated into Yahoo Local search results.

“As more and more consumers rely on the Internet for information about their neighborhood — from finding restaurants to plumbers to dry cleaners — local businesses are realizing the value of reaching potential customers online,” said Paul Levine, general manager of Yahoo Local.

Benefits go both ways, Levine said, noting the free sites will also improve the quality of Yahoo’s local search results. These sites are automatically integrated into Yahoo Local, extending businesses’ reach to consumers who use search engines to find information about local products and services.

The burgeoning local search market has been limited by the difficulty in convincing local businesses to opt in to the programs. Search providers face stiff competition from yellow pages providers, who generally have large, on-the-ground sales forces and existing relationships with local merchants.

“It’s too expensive today for search engines to develop a sales force to sell to the local community,” John Kelsey, president and CEO of The Kelsey Group, told ClickZ News recently. “The search guys have a real problem. Either they have to do agreements with the yellow pages guys or figure out a way to make it happen on their own.”

According to Kelsey Group research, over half of the U.S.’s 20 million small businesses don’t yet have Web sites. Yahoo is providing these businesses a simple interface and a template that allows them to create a basic site in minutes.

Yahoo Local already offers businesses free basic listings, which can be upgraded to an enhanced listing for a small fee. Enhanced listings let advertisers add and edit content about their business on Yahoo Local. This new service is offered in tandem with Yahoo Small Business, which provides more advanced Web site services, such as domain name, email, enhanced Web hosting, and e-commerce solutions.

The local search battle has been heating up, with Google and Yahoo going head-to-head to win consumers’ hearts and business owners’ dollars. Joining the fray are smaller players, such as Kanoodle, and online yellow pages providers.