san francisco -- When it comes to finding local products and services, consumers are increasingly letting their fingers do the clicking.
Locally targeted search engines have replaced thick phone books as the starting point for millions of people seeking plumbers, personal injury lawyers or hair stylists. That trend is creating a big business opportunity for a slew of online players, including advertising start-ups, Internet giants and traditional yellow-pages publishers.
One Woodland Hills company, ReachLocal Inc., just landed $55.2 million in venture funding to bulk up as it tackles the local-search market.
Welcome to the next big front in the battle for online advertising dollars. Kelsey Group, a research firm based in Princeton, N.J., predicts that local search and Internet yellow-pages ad spending will grow to $4.9 billion in 2011 from $1.9 billion this year.
"It's a huge growth opportunity," said Warren Kay, Yahoo Inc.'s managing director of strategic alliances. "We are very interested in small businesses. They provide meaningful content consumers are looking for."
Search engines are investing in initiatives to create virtual neighborhoods where people can find detailed information on local businesses, including consumer reviews and such basics as the hours of operation.
Google Inc., for example, recently launched a pilot program to send contractors into local businesses to collect such information. ReachLocal is using some of the money it raised to take a similar approach, sending salespeople into small businesses across the country to offer to manage their search-engine advertising campaigns.
Those "feet on the street" efforts reflect how hard it is to reach the country's millions of small-business proprietors, who tend to rely on more traditional forms of advertising, and teach them about the benefits of online search, analysts say.
To wit: Businesses with fewer than 100 employees spent less than 5% of the nearly $72 billion spent on all forms of advertising in the U.S. in 2006, according to Borrell Associates Inc., a media research and consulting firm in Williamsburg, Va.
Companies such as ReachLocal, Irvine-based WebVisible Inc. and New York-based Yodle Inc. -- as well as the digital arms of huge directory publishers such as AT&T Inc. and R.H. Donnelley Corp. -- are preaching that the Internet can be the great equalizer for small merchants struggling to get noticed. They tout simple text ads alongside search results as one of the most effective strategies to land new customers.
