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The service pits Google against traditional local directory purveyors like yellow-pages providers as well as rivals like Yahoo Local. The move is potentially lucrative for Google. Local search represents less than 10% of marketers' search budget now, but is expected to rise rapidly to encompass one in five paid-search dollars, according to market research firm eMarketer. By 2010, local search ad spending is expected to reach more than $6 billion, according to consulting firm Kelsey Group.
White flags, red flags
When a user asks for information about a certain business, such as "New York Pizza," results appear containing red icons of the businesses listed bordered by a map of the area on the right of the page. With the new service, the maps now include white icons as well. When the user clicks on one of the white icons, which can be in the shape of, say, a flower or a coffee cup, a bubble appears containing the name and address of the business, along with the telephone number and a graphical representation of a logo or a photo.
The service, which is part of Google's AdWords program, charges advertisers on an auction-based, cost-per-click basis. Google already lists basic information about local businesses for free in Google Local.
Other than flagging the new service within its AdWords offering, Google is not planning to market it. “One of the nice things about being Google is that people tend to find out about it quickly,” said Dominic Preuss, product manager, local advertising, Google.