Not to be outdone by Google (NASDAQ:GOOG) and Microsoft (NASDAQ:MSFT), Yahoo! (NASDAQ:YHOO) last week introduced its revamped mapping product. Why all the fuss over mapping? Simple: It's a critical part of Yahoo!'s strategy to capitalize on the fast-growing new market for local search.
Even though Yahoo! is late to the game, its new mapping tools are impressive. For example, you can enter a list of two or more destinations and get the optimized route to drive to all of them. If you don't like the route, you can drag and drop the destinations to change their order.
You can easily keep track of your favorite destinations. Yahoo! even offers an auto-complete feature that will fill in the place you're looking for as you type it.
With the click of a button, you can get real-time traffic speeds, incident reports, and construction updates. The new tools also let you search for ratings and reviews of local businesses.
What's more, Yahoo! Maps lets programmers freely incorporate its technology in their own sites and applications. One example on Yahoo!'s site combines its maps with Flickr.com, the online photo-sharing service.
Yahoo! achieved this rich functionality by using Macromedia's (NASDAQ:MACR) Flex technology. It's just one of a new crop of Internet technologies that companies are using to enter the local search march. For example, InfoSpace's (NASDAQ:INSP) GPS-enabled Mobile Local Search lets mobile phone users find movies playing at local theaters, select a showtime, and get directions, among other uses.
Companies are pouring money into local search -- but how do they expect to profit from it? In my opinion, the initial investment and associated marketing will set the foundation to get Web users accustomed to local search. Companies will then strike deals to have merchants pay them for leads generated from local searches, perhaps via a "pay-per-call" model. Under this system, a local business would list a special phone number on a search company's website. At the end of the month, the business would pay a fee to the search company for each call made to that particular number.
Yahoo!'s new mapping service is an attempt to catch up with its fierce competitors. It's got a strong offering, but it's still not "killer" enough to make a big difference in the local search wars. That raises an important question: Who's going to win these wars?
Increasing competition in the local search realm only raises the stakes here, driving ad costs down. Competitors seem to be springing up on a daily basis, including small private sites like InsiderPages and JudysBook.com. Still, the larger sites, with their huge pre-existing audience, will likely capture the lion's share of users' attention. That's good news for Yahoo! It may be a bit late, but it's not out of the game.
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Fool contributor Tom Taulli does not own shares mentioned in this article.
