Yahoo is offering free websites to small businesses. At least, that’s what the announcement says.

However, what Yahoo offers for free is more akin to a multi-page “listing” in the Yahoo Local section. You also can upgrade and get a template-based site for a monthly fee.

Of course, free sites that hang off a main website somewhere, and even low-cost sites that are based on templates, are nothing new. They’ve been around since the Internet went mainstream in the 1990’s. Most small businesses quickly realize they need something more than a listing and go for a customizable site.

What the Yahoo announcement really says is two things:

(1) Local search is the future. Its importance can’t be overstated. Local search is getting an increasing share of attention, not only from Yahoo, but from Google, which just last week announced that it was implementing keyhole map search into its local search, and that it is making local search available to mobile phones.

(2) Everyone wants to get at the small business market. Even though it already offers a Small Business section, Yahoo still looks for new ways to get the attention of small businesses. Whether the free listings in its Local section catch on remains to be seen.

For more, read this article in InformationWeek (try our free magazines: subscribe and get the hardcopy version of InformationWeek free!). The article has some excellent insights into the strategies of big search players about local search and how it plays into the small business market. It cites an interesting statistic that 70% of U.S. households use the Internet to shop locally for products and services.

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