How to strike a balance between the global reach the web can enable, and the local marketing the old-fashioned Yellow Pages facilitate. For a small business trying to decide on a marketing channel, the choice between a search engine and the Yellow Pages might not be mutually-exclusive anymore.

Partnerships between search engines and yellow pages publishers are already occurring. Recently, Verizon teamed with FindWhat.com, while BellSouth signed a deal with LookSmart.

The cost effectiveness of local search is so powerful that it ultimately could compete with other forms of advertising used by local businesses and services, including local yellow pages, direct mail, newspapers and radio.

The Kelsey Group, a provider of competitive analysis of the Yellow Pages business, estimates there are some 200,000 to 250,000 paid search advertisers globally right now and 10 million small and medium-sized enterprises in the U.S.

Percentage Of Search Traffic That Is ‘Local’

Search Provider Traffic From Users Explicitly or Implicitly Seeking Local Content
AOL 15% to 30%
Google Up to 60%
InfoSpace 10% to 30%
LookSmart 8% to 12%
Lycos 10%
Overture 12% to 40%
Yahoo! 5% to 30%
WebFinder (U.K.) 10% to 15%

Source: The Kelsey Group, compiled from 2003 data in company reports.