- These smaller players are drilling down into communities with so-called "hyper-local" destination sites that supply ZIP-code level news, business listings, blogging, social networking and citizen journalism.
Their goal is to corral the huge but fragmented market for local advertising, which is estimated at more than $100 billion annually. Many small businesses have never advertised online and don't have Web sites.
"It's an untapped opportunity with so many local ad dollars and no clear winner," said Mike Boland, a senior analyst with the Kelsey Group.
All the online firms are going up against newspapers and traditional yellow pages directories that have huge sales forces and strong relationships with local merchants.
"Newspapers and yellow pages have succeeded at this for decades, but they have lots of heavy overhead," said Hal Rucker, CEO of Smalltown, which has set up sites for San Francisco Bay Area communities such as Millbrae and San Mateo. "Our overhead is really, really low."