Google Comes Knocking

Google (Nasdaq: GOOG  ) came knocking on my digital door this morning. Again. This time, it was news of an enhancement that embeds ads into Google Local searches. So, for example, if you look up bookstores in New York, N.Y., the map reveals two highlighted Barnes & Noble (NYSE: BKS  ) shops alongside The Strand (a wonderful bookstore that reminds me of the equally wonderful Tattered Cover here in Denver).

The service is part of Google's AdWords offering, which allows advertisers to buy keywords and then tie those words to certain searches. In the example above, Barnes & Noble has bought the right to have its ads appear when you search for bookstores in New York.

Google's pitch to me doesn't say so, but some cursory browsing suggests the service is confined to a few major metropolitan areas at the moment. For example, I repeated the bookstore search in San Francisco, Denver, Kansas City, and Miami. None of the new ads came up in those searches.

Regardless, it's an interesting development, and it sets Google Local apart from the rival service hosted by Yahoo! (Nasdaq: YHOO  ) . Indeed, Yahoo! Local reads much more like a classic Yellow Pages, where you click through categories to find what you want. That's not necessarily bad, either. For example, the page that shows Denver-area bookstores embeds user ratings. (A shame the Tattered Cover isn't near the top, though. It's the oldest and best-known indie bookstore chain in the area.)

That's why I don't see this move doing much to hurt Yahoo! But classic Yellow Pages? That's another story. Year-old research from The Kelsey Group says that 70% of U.S. households use the Internet as an information source when shopping locally for products and services. I'd normally discount this stat because of its age and source (Google's PR team sent it to me). There's just one problem: You can count me among the 70%. Not long ago our washer and dryer went on the fritz. Google Local helped us find a good repairman. And I may never go back to old the Yellow Pages again.

Bye-bye, RH Donnelley (NYSE: RHD  ) . Hello, Google.

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Fool contributorTim Beyersmay own shares in Barnes & Noble, but he still loves indie bookstores like the Tattered Cover. You can find out what else is in his portfolio by checking Tim's Foolprofile. The Motley Fool has an ironcladdisclosure policy.

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