Although unannounced publicly, Google appears to be testing its Yellow Pages killer, maps based advertising.
If you do a search for Hotels in New York on Google Local, you get something that you don’t get for a search for ‘hotels in San Francisco’ – ads. Right there as little blue map balloons rather the red, algorithmic, local search results.
Not only are the ads local, but they are contextual i.e. hotel searches bring up sponsored results for local hotels.
In some ways this is a relatively obvious move, however its big news considering that:
1. The Yellow Pages advertising market is bigger than the entire existing online search advertising market.
2. Offline Yellow Pages directories will clearly be replaced, over time, by online products, and it looks like maps are how this plays out.
3. Ad products are where Google makes the money that justifies its gargantuan Market Cap. so a new ad product is a big deal. Now, alongside Adwords and Adsense it has a third revenue source that is in a bigger marketplace.