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The recent changes to Yahoo! local were accompanied by a change to their rate sheet. The previous pricing was fixed fee based on cities and a graduating scale of fees from high traffic to low traffic areas. The lowest price city was, if memory serves, $15/mo. This sounds cheap until you figure that most service businesses serve counties not cities.

So let’s do the math on the old plan for Bergen County NJ. This county has about 70 towns, so under the old pricing plan this would have required me to plunk down over $1000/mo to play. For obvious reasons I did not advertise on Yahoo! local and am sure many other would- be-advertisers opted out for this reason..

Under the new plan, however, all that is changed… coverage in all of Bergen County is now $30/mo. plus the $9.95 monthly fee for the enhanced profile in my category. IMHO this takes Yahoo! Local from a no-buy to a must-buy for any service business. Joining superpages.com* as a great local search vehicle with a very low entrance fee. Cities like Manhattan can still be purchased and at $100/mo. (may vary by category) should represent a very good value.

Expect the set-up for your advertising on Yahoo! local to be frustrating. Remember it’s new and I would expect them to work on the usability of this soon. For instance I couldn’t figure out how to select the right category… admittedly a big issue. But I went ahead with the registration figuring it would allow me to change categories following an approval period of 5 days, which it did. All-in-all it took about a week to set up and get right but now it’s done and maybe the difficulty will dissuade your competition from signing up, which is even better for you.

*superpages.com does very well in the NY/NJ area, you may need to consider the IYP affiliated with your local telephone company before jumping right into superpages.com.

Yahoo! Local recently made some changes that other local portals are sure to follow:

The first is the ability to comment on reviews. Any local site that has reviews will certainly have to adopt this innovation. Yahoo is promoting it as a way to encourage more reviews:

Commenting on User Reviews – No longer will it feel like shouting into the wind when you write a review. Now the people who benefit from your tips can reply back. You’ll also be able to track comments on your reviews from your My Local page.

But I think is this more for the business owner. It offers the opportunity to discredit bad reviews - small business owners hate paying for advertising on sites where there are negative reviews. And answering good reviews gives prospective new customers the opportunity to “hear” the business owner interact with existing customers. And Yahoo! local gives gives plenty of incentive for SMBs to get the conversation started:

through a new, updated algorithm, we’re making sure that search results take your ratings and reviews into account. We want to make sure that people’s contributions to Yahoo! Local count in more ways than one.

I believe that G Maps has had reviews as part of the algo for awhile but it appears Yahoo! local has really turned up the juice. Check out this search for Pizza in Paramus NJ:

Yahoo will probably have to modify this because this isn’t a good result for users. The river is wide and made wider by traffic and a $6 toll to get into New York. So, nobody is going to make this trip for pizza even though in miles it’s not that far. But it is a good demonstration of just how big a role reviews are now playing in the local results.

The second cool innovation is a most popular feature:

Most Popular – Highlights the best of a city in the key categories of Restaurants, Health & Beauty, and Home & Garden.

This is a trick borrowed from local magazines that offer a “Best of” feature that works well in 2 ways. First, this will build up good will for Yahoo with the most popular businesses everywhere and encourage these businesses to advertise. Second, these same businesses will likely promote Yahoo! local on their site. I can see it out now on home pages across the country; “Voted Best Burgers in Timbuktu by Yahoo! local.

The third important change is taking local full speed into Web 2.0, with a ‘My Local’ feature.

My Local Improvements – A new “save for later” feature so you can quickly archive those hidden gems you uncover along with your recent reviews, tags, and collections.
So, make sure to update your profile with a picture or avatar, look up some local favorites, write a few reviews, and comment back on some helpful reviews you discovered along the way.

In some ways this is the coolest part of the new Yahoo! local, but I think that it will have the least impact. While insider pages and others have been able to build a community around local I have my doubts that Yahoo will be able to get it done.  People may feel like Yahoo is just too big to really be a part of.

Will Yahoo! Local Emerge as the Market Leader?

Eric Lander has a good post on on this and he believes Yahoo has a real opportunity. I’m not so sure. The last study I saw on this had Google and Yahoo in a dead heat, each with about 30% of the market. That was in September of 2006 and Google has increased it’s share of search since then; so it’s likely they have gained a bit in local as well. Which is probably a contributing factor to Yahoo doing this overhaul in the first place. And as much as I love the changes they made, I also believe they are easily too easily imitated by the other local portals.

So speed will be a factor and this is a hard thing to get done in local because the users are not often hard-core internet users and will discover these features slowly and by the time they do, if they ever do, they will already be a part of most local portals and Yahoo will lose it’s advantage.

With that said Yahoo’s overhaul will improve local search for business owners and end- users as well as being copied by the competition. So, in a sector that generally moves slower than the rest of the internet, this qualifies as a revolution.

It was also enough to convince me to advertise. I will take you through that experience in my next post.