Yahoo!'s Frazier Miller has commented that instant messenger is really the original social network. Miller had previously worked on Yahoo! Messenger and Yahoo! Mail; and has recently joined the Yahoo! Local team.
In an interview with Adage, he said that "Local is expanding from a look-up use case or the old Yellow Pages approach to a browse-type use case, where you want to bring in user-generated content elements to make a decision."
Flickr and YouTube are empowering local search in new radical ways. Now users can go deeper in terms of relevancy of their search engines.
They can post photos of the business or the service — photos of what the inside of the cafe looks like, for example. One recent example is a carpenter or cabinet maker — someone had taken a picture of the cabinet maker's work.
When asked how Yahoo! earned money from these services, he answered that:
The lion's share of the pot of gold is the search model done on the local basis. Merchants can bid on a featured placement like you'd imagine in Yahoo Search. They can bid by category and location, except you don't bid for it, it's a subscription fee, which is a lot easier for merchants to understand. They pay a certain price depending on how densely populated that category and population is.
He also claimed that the way Yahoo! focuses on user is different from the way Google does it. Whereas Google's approach is essentially technical, Yahoo! looks at smaller players in the market who serve specific needs of specific users. Read the whole interview here.