After a trial run in four markets, Yahoo has just launched Neighbors nationwide. Neighbors is an interesting and potentially very strong addition to Yahoo Local’s offerings. It’s been around since November 2007, when it debuted in two California markets. More recently, it’s been available in the San Francisco area, New York, Chicago, and Dallas. There’s no formal announcement of the service yet, just a lone tweet posted earlier tonight from the Yahoo Real Estate account. But don’t let that distract you from what could become a successful local effort, particularly in larger cities with a larger concentration of users.

Neighbors exists as a new, fourth tab on Yahoo Local. It’s essentially a local bulletin board for every community in the U.S. On the surface, it looks like a combination of Yahoo Answers and Yahoo Local, and it could serve to cover up one of the main shortcomings of Yahoo Answers: a lack of local question-and-answer opportunities outside of major cities. (Answers has a Local Businesses category, but it only covers 30 U.S. cities.)

Yahoo has developed Neighbors with a number of smart features. It has all the basics such as categories — like “Business Recommendations,” “Environment,” and “Kids and Schools” — and a topic search engine. Topics can be filtered by location and sorted by either Most Recent or Most Active. But there are also a number of smaller features that should help make Neighbors more “sticky.” Even without participating, users can sign up for email updates of all activity in their area. There’s also a comprehensive RSS feed for each area, separate feeds for each category, and even RSS for each topic. You can also send any topic to a friend via email. About the only things missing are the almost obligatory “Tweet this” and “Send to Facebook” tools. But instead of those, Yahoo is focusing for now on offline marketing — Neighbors offers a print-quality, PDF “flyer” customized for every town that can be downloaded and shared around the neighborhood. (image at right)

I should also mention one more similarity with Yahoo Answers: The topic pages are obviously built with SEO considerations in mind. The content in active threads on Yahoo Neighbors could quickly rank highly in search results for local businesses, local events, and a lot of other local keywords. Yahoo Answers is an SEO powerhouse and ranks very well; I won’t be surprised if Neighbors follows suit.

Will Neighbors Become A Spam Magnet?

Yahoo positions Neighbors as a tool for community improvement, but by placing it inside the Yahoo Local environment, its primary use may be for Q&A about local businesses, recommendations from neighbors, and the like. That means spam — or at least business owners and marketers trying to get local visibility — is sure to follow. Questions like this, for example, are just begging for replies from hair stylists all over San Francisco:

The Yahoo Neighbors posting policy begins with a warning that “unsolicited commercial postings (including those from local small businesses) are NOT allowed,” and a similar message appears in a pop-up window when you click to create a new topic. Yahoo says comments are moderated (how will that scale if Neighbors takes off?), but — and this is very similar to the way Yahoo Answers works — it’s okay to include helpful links in replies:

“Links of value to readers are welcome, but please use them sparingly — distribute spam and you’re banished forever.”

If something slips through the cracks, there are also “Report Abuse” links on each topic and all replies.

Final Thoughts

Yahoo Local has been relatively stagnant for a while now. Sure, there have been a few minor improvements here and there, but it’s been a while since they’ve rolled out anything as innovative as Yahoo Neighbors.

Yahoo is promoting Neighbors right on the main city guide/home pages — see the right column on the San Francisco page, for example. As usage increases, Neighbors will surely be promoted elsewhere as part of the company’s effort to bring its properties together and “create community from isolated sites.”

Will it work? I think Neighbors has more potential for wide success than many of Yahoo’s recent products. It taps into Yahoo’s biggest strength — its millions of users — and shouldn’t be impacted by any search-related changes that arise if the Yahoo-Microsoft deal is approved. There’s no question that local and social are colliding, and Yahoo Neighbors could become one of the more interesting hybrids in that space.

As the dust begins to settle on the Microsoft-Yahoo search deal, we’re finding that this week’s announcement raised as many questions as it answered. The companies told Danny and Greg that the agreement covers “web, image, and video search.” But what about the many search verticals that Yahoo and Microsoft are involved in? These are areas that, if not technically covered by the “web, image, and video search” label, are certainly highly connected to those products. And they’re likely to feel the impact of Micro-Hoo’s plans in some way, at some point.

One of those verticals is the Local/Maps space. Below are my thoughts on what the Microsoft-Yahoo deal could mean for local search, but first something of a disclaimer: I have no insider knowledge on what will happen, only speculation and even a wish list of what I’d like to see happen. At the same time, I think it might be fair to say that many inside the walls at Microsoft and Yahoo also don’t know what will happen with local and other search verticals. The two companies only referred to having “options” on Wednesday, which suggests that many details are still TBD.

What We Know

As explained on Wednesday, Yahoo’s crawled search results will come from Bing (assuming the deal goes through), but Yahoo will “own the user experience” and can present those search results however it wants on Yahoo search. But, to answer a local search query, search engines rely on a lot more than just crawled search results. They use maps, business listings (their own and from other sources), ratings and reviews (ditto), and more. When Danny and Greg asked about local and mobile, Yahoo EVP Hilary Schneider said that Yahoo has an option to use Microsoft technology/products beyond crawled search results, but isn’t required to do so.

Both companies have a variety of local search assets. Among them: Yahoo Maps and a separate Yahoo Local, and there’s also Yahoo Yellow Pages. Likewise, Microsoft has Bing Maps and Bing Local – the latter defaults to a YellowPages.com-powered directory, but eventually brings you back to the same business listings as you’ll find when doing a local search on the main Bing.com search engine.

Both Yahoo and Microsoft also run their own databases for small/local business listings: the Bing Local Listings Center and the Yahoo Local Listings Center. Both companies also offer local search advertising, but if the deal is approved, Microsoft will apparently take over all non-premium advertising, which would seem to include most small/local businesses.

As I see it, there are two local aspects to this deal — the consumer side and the small/local business side. Keeping the above in mind, let’s look at those in more depth.

Consumer Search Impact

On the consumer side of local/maps, Bing and Yahoo have a loooong way to go before they’ll make any noise. According to Hitwise traffic numbers provided specifically to Search Engine Land, the two companies — even when their shares of traffic are combined — are a distant third behind Google Maps and MapQuest.

The chart reflects combined traffic; i.e., Yahoo’s numbers reflect Yahoo Maps, Yahoo Local, and so forth. Add up Yahoo and MSN/Bing properties, and you have about 11% reach … compared to 42%+ for Google. So, in local search, Microsoft’s and Yahoo’s properties are in an even bigger hole than Yahoo Search and Bing are when compared to Google.

Most local search happens not on the specific local and maps properties, but on the main search engines. Yahoo and Bing differ — sometimes substantially — in how they present local search results. Bing is much more consistent in showing a list of local businesses plotted on a map when showing results for an obviously local query, and will typically show up to eight listings.

Yahoo, on the other hand, shows business listings and a map less often. The first two screenshots below show queries like “richland wa real estate” and “seattle restaurants” that are not producing a map with business listings, unlike the Bing screenshots above. When Yahoo does show a map (see third screenshot below), there are typically only 1-3 businesses listed.

Since Yahoo will continue to control its own interface, it’s very plausible that consumers will continue to have different experiences when doing local searches on Bing vs. Yahoo. It seems logical that Yahoo will want to separate its user experience as much as possible from Bing, so improvements like yesterday’s announcement of more business information in local search results should remain in place after the deal.

But with the local results themselves coming from Bing, and with redundancies in other area like maps and business listings, we don’t know what Yahoo local search results will really look like. Does the agreement allow Yahoo to maintain the Yahoo Maps and Yahoo Local products and continue showing them in search results? Would Yahoo want to? Greg wondered earlier this week on his blog if Yahoo should just start using Bing Maps (AKA Microsoft’s Virtual Earth). These are some of the many questions yet to be answered about what local search will look like after the deal is done.

Small/Local Business Impact

As mentioned above, both Yahoo and Bing offer local business listing services for small businesses. The process of creating a listing isn’t much different from Bing to Yahoo, but if I recall correctly, Yahoo’s business center offers a few more data fields to make a business listing/profile more complete.

From my experience, both systems have their strengths. Bing, for example, offers a generally painless method for editing listings. After submitting the changes you want, Bing’s system places an automated phone call at the time of your choice: immediately, or within 5, 15, or 30 minutes. Entering a PIN number is all it takes to confirm the changes you’ve made.

One of the strengths of Yahoo’s local business listings service is the availability of human tech support; it wasn’t long ago that I accidentally uploaded the wrong photo to a client’s Yahoo business listing. While I couldn’t remove it myself (a feature Yahoo should add), I contacted Yahoo and the image was removed for me in less than an hour. Given Google’s poor track record of providing support to local businesses, this is an area of great opportunity for Bing or Yahoo to beat Google in local business listings. But we don’t know if Yahoo and Bing will continue to maintain separate listing services for local businesses, or if that’ll be considered redundant.

The business profile pages offered by both Bing and Yahoo are quite similar. You could argue that there’s not much room for innovation when it comes to presenting basic business profile information, and you might be right.

One area that Yahoo has separated itself a bit from Bing (and Google, for that matter) is in the search advertising products that it offers. Yahoo is the only one of the major search engines to offer fixed price search advertising via its Local Featured Listings service. What makes Yahoo’s LFL service stand out is that mirrors the familiar yellow pages type of advertising that small businesses already know: Placement is guaranteed, and the price is pre-determined — as low as $25/month. The question is, with Bing taking over the non-premium advertising products, what will happen to a small business-friendly ad product like this?

Final Thoughts

It’s anyone’s guess what local search will look like if and when the Microsoft-Yahoo deal is approved. All we know is that Yahoo has committed to showing crawler-based organic results from Bing, and that Yahoo has promised to continue to innovate (their word) on the user experience side of search. In their current incarnations, both Yahoo and Bing have certain strengths in local search. The questions now are whether and how they’ll use those strengths to take on Google (and MapQuest, to a degree), and if it’ll be enough.

Yahoo has announced a nice change to the way it shows local search results for businesses. The Local Shortcut, which has always indicated things like how many reviews/ratings a business has, is now expanded to include the actual text of those reviews and other information like photos and driving directions. All of this is available right inside the shortcut.

As you see above, the new options appear as tabs below the business entry. Clicking any tab opens up a new layer of content so users can see the photos, read the reviews, or get driving directions with no extra clicks needed.

Yahoo says the added information is available on searches for specific businesses, as shown above, as well as on categorical searches such as “san francisco diners.” If the Microsoft/Yahoo deal is approved and the two companies sit down to figure out how to integrate their search results display, this would be a good feature to save.

These days it’s hard to remember that at one time Yahoo was the pioneer in dynamic mapping. It introduced enhanced local search features and capabilities into the map before Google, Microsoft and MapQuest. At a certain point, however, Yahoo opted out of the map feature wars that erupted between Google and Microsoft (StreetView, 3D, aerial, UGC). Since that time there have been a range of incremental improvements for Yahoo Maps.

Accordingly the company said that it has given Yahoo Maps a “face lift” in the UK, and in France. There are a range of improvements discussed. While these ongoing improvements are critical and help boost quality, the larger question in my mind is how committed is Yahoo to its mapping product and to Yahoo Local more broadly?

While Yahoo Maps remains a solid product, absent ongoing effort and investment, it will continue to lose share and fade. MapQuest’s complacency until recently is one of the factors that allowed Google to overtake it. The chart below shows a relatively stable market share for Yahoo Maps, albeit one that is on a gradual downward trend.

Source: Compete

Yahoo CEO Carol Bartz has said that the company is increasingly focused on local. Indeed, Yahoo Local was similarly a market-leading product that has lost some luster and traction, amid the many reorgs, and now seems to be in maintenance mode. Given Yahoo’s focus on Mobile and its parallel effort to move from a “web of pages to a web of objects” in search, the company should see its local and mapping assets as strategic in that broader context.

I agree with Bartz that it’s critical for Yahoo to get its managerial house in order. But now, as that objective seems to be nearing an end, the company should refocus on its products. And with Bing seeming to gain some momentum, Yahoo cannot take user loyalty for granted.

Yesterday Yahoo spoke about taking search much more into the real world by turning “web pages” into “web objects.” Today there were a couple of announcements at the Where 2.0 conference related to identifying unstructured data online and linking it according to places and locations — in other words made geo-relevant.

Tyler Bell of Yahoo gave the talk at Where about a “geo-enriched location-aware internet.” Where is a very developer-focused event. Bell’s talk was essentially about building the location “infrastructure” that will help support the vision articulated at the Yahoo Search event yesterday. The first aspect of the talk was about  Yahoo GeoPlanet (which provides layers of geographic identifiers and place-based information to developers). Bell announced that in addition to offering an API, GeoPlanet will now allow developers to download all the data for free (with attribution to Yahoo) and host the data themselves.

Yahoo also announced Placemaker. Placemaker is an API that enables developers to pass unstructured data in documents to the service. It extracts the location information in those documents and allows the information to be associated with one or more locations (publishers/developers need to decide which places are most important). MetaCarta offers a similar capability.

Absent my attendance at the Yahoo Search event yesterday these would have seemed fairly map-geeky announcements. But in the context of Yahoo’s larger project to more directly tie search and the internet to the physical world this was quite interesting.

Here’s more information from the Yahoo Geo Blog.

When the Yahoo-Newspaper consortium was announced in early 2007 both Yahoo and the newspaper industry were stronger and in better shape than they are today. (That’s certainly true for newspapers.) Since that time Yahoo has suffered through the MicroHoo episode, gone through a couple reorgs, laid off a meaningful chunk of its workforce and gained a new CEO. The newspapers, for their part are mired in a well-publicized crisis, with ad revenues falling precipitously and major publishers making dramatic newsroom cuts, some declaring bankruptcy and even shutting down publications entirely.

Now comes a bit of good news for both Yahoo and its newspaper partners; the consortium deal appears to be going well according to an update in the NY Times on Sunday. It’s being managed by Lem Lloyd and Hilary Schneider, both at Yahoo and both former Knight Ridder executives. Lloyd manages the initiative directly while Schneider has a larger role at Yahoo (as you know) and reports directly to Yahoo CEO Carol Bartz. She is now in charge of Yahoo’s new North American division.

The newspapers participating in the consortium program, which is most of the major publishers in the US, are using Yahoo’s new ad platform, APT, to do a range of different types of targeting on their own sites and boost CPM rates accordingly:

One is a new ad system from Yahoo, currently installed at about 100 newspapers, that allows them to sell graphical ads on their sites that are aimed at specific audiences, like car buyers or sports enthusiasts. The system puts users into those groups based on the pages they visit online, a technique known as behavioral targeting.

This allows publishers to sell, say, high-priced travel ads not only on travel pages but also on any page visited by a user interested in travel. An advertiser may have paid 50 cents to reach every thousand visitors to a high school sports page, for example, said Leon Levitt, vice president for digital at Cox Newspapers. “Now it doesn’t matter where the page is on the site,” Mr. Levitt said. “All of a sudden we can sell that page for $15” for every 1,000 visitors who are interested in travel, he said.

They’re also able to sell into the Yahoo network, which gives them much greater online reach than they would have using their sites alone. Local ad targeting through APT and related capabilities allows them to reach Yahoo users in specific markets.

The anecdotes in the NY Times article suggest that the newspapers are doing well with the program:

A similar sales blitz at The Ventura County Star, a small daily north of Los Angeles, netted nearly $1 million in sales in the run-up to Christmas, or roughly 40 percent of what the paper sold in online ads in 2008. The Naples Daily News in Florida did even better: The late-January blitz generated $2 million in sales, or more than half what the paper sold online in 2008. Some larger newspapers have had similar successes.

Yahoo says that the revenue contribution from its point of view is not “material” but the company is optimistic that the relationship will generate increasing revenues over time. It also values the local sales channel that the newspapers provide and corresponding reach into local markets, which Yahoo would probably not otherwise have.

The Yahoo-consortium program is online only and doesn’t affect print newspaper ad sales. Google recently shuttered its print newspaper advertising program citing disappointment with demand and revenues.

The Yahoo Search Blog announced that Yahoo oneSearch shortcut has been improved and expanded.

• A new auto-locate feature will detect your location on some mobile devices
• Enhanced Search Assist that incorporates the user’s recent search history was added and
• Expanded availability on Windows Mobile client including the latest latest Nokia and BlackBerry

This service also has voice search features. To give it a try on your mobile device, go to http://m.yahoo.com/voice.

A lawsuit over a Yelp.com review has been settled, but the larger issue of how business owners, customers, and review sites will co-exist online remains wide open.

CNET is reporting that a San Francisco chiropractor and his disgruntled patient have settled their differences over a negative review that the patient posted on Yelp. Dr. Steven Biegel sued Christopher Norberg for defamation when Norberg questioned the chiropractor’s billing practices in his Yelp review. Neither side is discussing the terms of their settlement, but Norberg has updated his review on Biegel’s Yelp business listing:

A misunderstanding between both parties led us to act out of hand. I chose to ignore Dr. Biegel’s initial request to discuss my posting. In hindsight, I should have remained open to his concerns. Both Dr. Biegel and I strongly believe in a person’s right to express their opinions in a public forum.

We both encourage the internet community to act responsibly.

Online reviews are a primary element of local search and small business marketing. In addition to sites like Yelp, Citysearch, and Insider Pages, you have Google Maps, Yahoo Local, and Live Search Maps all encouraging users to leave business reviews in the local search listings.

There’s no question that consumers value reviews online, but business owners often struggle with handling negative reviews. Some sites let business owners reply to negative reviews, but Yelp has had to remove some business accounts for trading positive reviews. And users themselves aren’t innocent, either; some have walked into restaurants, demanded free meals, and threatened to leave negative reviews if their demands aren’t met.

Meanwhile, search engines are also struggling with reviews, but in a different way: The power of reviews on local search listings, and in the algorithms that determine rankings, have created long-running spam problems. I wrote on Small Business Search Marketing about Google Maps review spam that survived 10 months before anyone noticed. Florist Detective has written about similar review spam on Yahoo Local.

So, while this one case may be over, there are bigger issues still to be solved when it comes to online reviews, search engines, small businesses, and local search.

India is something of a parallel universe in terms of search and internet activity. It’s a massive and incredibly dynamic market but distinct from the US and Europe in important ways. All the major engines are competing there and it’s also often a testing ground for new products. For example Yahoo’s “Glue Pages” were released and tried there before coming to the US. Now Yahoo has bought a 30 percent stake in a local information database and directory assistance provider in the market: Info Network Management Company, which runs the Call Ezee service. Seen as a way to secure local data and provide a “voice search” (mobile) capability in the Indian market it makes sense.

Separately, Microsoft has chosen Nokia-owned NAVTEQ to provide the underlying data for its Live Seach Maps offering in India.

Microsoft also works with NAVTEQ in the US and Europe. Yahoo also gets its mapping data from NAVTEQ. Google, for its part, is now only working with TomTom-owned TeleAtlas.

As Google Maps continues to roll out new features that competing map services don’t have, web users are rewarding it with big gains in traffic. A recent analyst report says Google is the number one maps site in terms of features and usability, and new Hitwise.com traffic data just shared this week with Search Engine Land shows Google Maps pulling much closer to category leader MapQuest.

In a report issued this week, the boutique investment bank Cowen and Company says Google is the clear leader with the most user-friendly features among the four major mapping sites. “Google Maps has meaningfully expanded its lead in features and functionality over its competitors,” Cowen analysts say in their report.

As for those three competitors, the Cowen report isn’t very kind: “Since our initial survey in July 2007, innovation at MapQuest (AOL) and Yahoo Maps has stagnated. Microsoft Live Search Maps, which is the least popular of the four, ranks a distant second, but has launched a couple unique features over the past two years.”

The report includes a case study using all four mapping sites to get directions using the phrase, [South Orange community center to Yankee Stadium]. The report praises Google Maps for its “unified search box” because it converted the phrase into “Point A to Point B” directions while allowing the user to choose exact start/end points. The three other services, Cowen analysts say, all failed to provide such a user-friendly experience; Yahoo! Maps and Microsoft Live Search Maps were dinged for requiring the user to provide the exact address of the South Orange Community Center. The report’s analysis of MapQuest says “text and display ads clutter MapQuest pages to the point that it is difficult to find where to click to continue the process of getting directions.”

Google Maps also gets credit in the report for providing easy access to street-level photos, public transit directions, and other features:

Since our last report in July 2007, Google has added a number of unique new features, such as My Location, which pinpoints the location of mobile users to within around 500 meters using cell tower triangulation. In addition, Google has dramatically increased its database of street level imagery and public transportation directions; none of the other online maps sites offer ’street view’ or public transportation directions.

What About Market Share?

Innovation and user-friendly features aside, Google Maps remains second behind MapQuest in terms of market share — but is gaining ground quickly, according to new traffic data from Hitwise analyst Heather Hopkins.

The image above shows U.S. market share in the Travel-Maps category. Over the last nine months, Google Maps has seen a traffic increase of about 45%. Hitwise stats show Google currently having just over 32% market share among mapping sites. MapQuest, meanwhile, has fallen from above 50% to 44.4% market share at the moment — that’s down about 15% so far in 2008.

Longer trending of these same numbers can be seen by looking at Hitwise stats published earlier this year. At the start of 2007, Google Maps market share was only about 10%, a distant third behind MapQuest and Yahoo! Maps.

Stepping outside the Maps category to overall U.S. web traffic shows similar numbers:

The image above not only casts a wider net, but also shows combined numbers for Yahoo! Local and Yahoo! Maps, as well as combined numbers for MSN Live Local and Ask City (which uses Microsoft Virtual Earth mapping). Heather Hopkins shares more about these charts on the Hitwise blog today.

We’ve noted on Search Engine Land that two factors likely began to change the traffic trends for map sites: First, when Google stopped linking to MapQuest and Yahoo! Maps; second, when Google Maps began to be featured prominently in Universal Search results.

Cowen and Company expects this trend to continue, and to pave the way for success in mobile search: “Google’s aggressive investment in maps positions the company to achieve a dominant share of search in the mobile Internet.”