Google’s local efforts have grown tremendously under the direction of Marissa Mayer, and now encompass a wide range of products, including Google Maps, Google Places, Zagat, Google Offers, and Get Online a new SMB initiative.

At ILM West this week in San Francisco, Head of Local Consumer Marketing Jeff Aguero provided a rich portrait of Google’s thinking on local. “We are ten percent of where we are and where we need to be,” says Aguero. “There is so much that needs to be done.” He adds that Google is eager to work “closely with partners to create a rich opportunity” for all.

“The local experience is mostly disconnected,” says Aguero. “It is not consistent across user experience,” whether people are engaged in researching, finding, experiencing, reviewing, or sharing. Google’s goals are ultimately to “get more local searches, more customers, more reviews, better content, higher engagement, and more businesses online.”

Local is obviously an important part of Google’s core search business – 20 percent of desktop search is now local- oriented. But local is “fundamentally about places. Any type of action; how does it get there; how do you share what I am doing about my experience (i.e. photos, check-in); how do I save money on a deal?”

Within Places, Place Pages is a major effort. Currently, there are 50 million, dynamically generated Place Pages worldwide. Of these, eight million have been claimed by the business themselves. “It is the greatest catalog of place data on the Web,” notes Aguero.

The big trend is the convergence of Place Pages and Host Pages. “They have the same type of audiences in different ways, “ he says. “The functionality of both entities are likely to converge.”

Expanding ratings and reviews is also clearly a major initiative. Google Places is now getting more than a million ratings per month.

Mobile, meanwhile, is in the middle of it all. “Fifty percent of maps usage is mobile,” Aguero points out. “Mobile search usage has surpasses desktop usage on holidays. “People are using mobile phones as guides to the real world on an ongoing basis. Recently, the company introduced TalkBin, which leverages mobile to provide real time customer feedback.

Google Latitudes, a check-in product, is also is getting a lot of attention, and already has 10 million users. “It is not just how many people are enjoying and sharing products,” says Aguero, noting that Latitudes has been greatly enhanced by the introduction of Google Plus social circles.

And then there is Google’s Get Online initiative, a partnership with Intuit that lets SMBs claim a place, update information and provides a free web site. Get Online started in Michigan and is now in 14 states. New tools will continue to be added, says Aguero. “We need better toolkits for businesses.” Recently, the company introduced Adwords Express, which lets businesses set up an AdWords program in ten minutes.

How many small businesses have done a deal at this point? 12 percent, according to a new survey of 2,500 SMBs by Merchant Circle. That’s about a third higher than Merchant Circle’s June survey.

The survey also found a lot of Facebook ad usage. About 23 percent of local merchants report having tried Facebook Ads to date, which is five percent higher than in June. Sixty-two percent said they would use Facebook Ads again, citing ease of use (again, 62 percent) and the ability to start and stop campaigns (55 percent). Those that won’t do it again say it didn’t do much for customer acquisition (66 percent) and the ads were too expensive (41 percent).

Despite the Internet horror stories of bagel stores and cupcake stores going under because they oversold on Groupon and other deals sites, deals generally work well for SMBs. About 75 percent of respondents say they would offer another deal in the future. Sixty-one percent cited customer acquisition as the best thing about deals. Thirty-seven percent also said that deal profitability was a major reason to do another deal, up from 24 percent in June.

It is not all rosy in Merchant Circle’s survey, however. Twenty-five percent of SMBs that have done a deal said they wouldn’t do it again. Of those, 42 percent said it was not effective for customer acquisition, 36 percent said it was too costly and 34 percent said they lost money on the deal.

When choosing a deals publisher, 64 percent of the SMBs cite costs (i.e. commissions) as their top consideration. Local targeting was cited by 57 percent, and local reach was cited by 52 percent.

What is especially surprising in the survey is how many deal-using SMBs report having tried Google Offers, which just launched this summer and is now past 30 markets. Nineteen percent of deal-using merchants have already tried Google Offers, compared to 26 percent for Groupon and 21 percent for Living Social. Forty-three percent have tried other deal providers. We know from experience that many SMBs don’t actually know what vendors they use for different things, so we’d suggest some room for margin of error here.

ILM West is shaping up to be one of the great ones. Taking place Dec. 12-14 in downtown San Francisco, ILM West really reflects a sea change in local marketing from advertising to the new hybrid model of advertising and commerce (i.e. prepaid deals, reputation management, mobile app sales etc.).

We’ve made some big additions since our last update, starting with Google and Facebook. These add to the existing lineup, including our “rock stars” (Clear Channel CEO and industry legend Bob Pittman AllThingsD’s Kara Swisher, Media News Group/Journal Register CEO John Paton and Deseret Media and former Harvard Business School Professor Clark Gilbert), and major sessions on deals, offers, verticals and the whole spectrum of local trends.

We will pursue three unique angles on Google at ILM West:

1- The local efforts, under Marissa Mayer’s local team. Jeff Aguero, head of local marketing, will present on everything local, from Zagat, to Google Places, to the Big G’s new “Get Online” program for SMBs. These strategies have really developed since this summer.

2- The global reseller effort. Global Channels head Todd Rowe will engage in an in-depth conversation with BIA/Kelsey President Neal Polachek on all his efforts.

3- Google Mobile. Mobile and Local Search exec Surojit Chatterjee will provide insights into this critical area for Google as part of our All SoLoMo morning on Day 3.

We’re also going deep with Facebook at ILM West. Facebook’s new local leader Matt Idema is our afternoon keynote on Day 2, with a lot of new details and a progress report on the local and vertical strategies. On Day 1, we are also taking a special look at working with Facebook’s platform with execs from Trada, Oodle and Kenshoo Local/Social weighing in. Eager but not sure how to play with Facebook? You will be when ILM West is done.

The SoLoMo event on Day 3 itself is going to be quite the cornerstone for ILM West. Curated by the research teams from our Social Local Media and Mobile Local Media programs, SoLoMo features top line data; and indepth and fresh looks at SoLoMo implementations from leaders at Google, AT&T Interactive, Zaarly, PayPal, XAd, JiWire and AppStack (Steve Espinosa’s new project.)

You can see the full agenda here. And register here.

Remember: We are making a donation to the SF/Marin County Food Bank for all registrations that come in by Thanksgiving.

Yelp’s S1, which was issued last week as a run-up to a $100 million IPO, reveals a lot of new data about the reviews leader. The big question about Yelp has been whether it can grow against increased pressure from Google, and also begin to take market share away from traditional media players such as Yellow Pages.

Yelp’s plan for growth relies heavily on overseas growth. It is now in 22 international cities on top of 43 domestic markets. But it would also grow its primary business via local and brand advertising; monetizing mobile services that now make up 40 percent of its searches; boosting revenue from deals (where it has lowered expectations); and more revenue sharing dollars from restaurant reservations and travel.

Launched in 2004, Yelp had initially risen to the top of the heap among service and city guide leaders by dominating Google’s organic local search. After Google’s effort to acquire Yelp for $500 million ended under murky circumstances, Yelp has seen its prior dominance of Google search fade away. Moreover, Google Places – enhanced by Google’s purchase of Zagat — now looms as a competitor in its own right for reviews and advertising.

“Our success depends on our ability to maintain a prominent presence in search results for queries regarding local businesses on Google,” notes the S1.

Yet, Yelp is growing splendidly, even with the apparent Google woes. Yelp earned $47.7 million in 2010 and $58.4 million in net revenue in the first nine months of 2011, representing 80 percent growth over the first nine months of 2010.

During the nine months of 2011, the company claimed 19,000 paid accounts – up 75 percent from the same period in 2010, And 529,000 claimed pages –up 114 percent. And in a business where the number of current reviews is its currency, it has an archive of 22 million reviews, up 66 percent from the same period in 2010. Overall, it sees 61 million monthly users.

Yelp is primarily known for its restaurant reviews. That is still its primary image, and what has made “to yelp” a verb. But Yelp is also more diversified than generally perceived, and resembles a combination city magazine/Yellow Pages.

Restaurants and dining now make up 23 percent. Other major segments include shopping (22 percent), services (10 percent); beauty (9 percent); arts and entertainment (8 percent); Health (5 percent) Night Life (4 percent) and Travel and Hotel (4 percent). It also has a broad demographic, with 42 percent between the ages of 18-34, and 33 percent between the ages of 35-49.

What investors will be looking at is not only Yelp’s ability to grow and move into new areas, but also it’s potential for profits. The company has accumulated a deficit of $32.1 million since its launch, and lost roughly $7.6 million in the first 9 months of 2011. Sales and marketing costs have been especially heavy, eating up $38.5 million for the first nine months of 2011.

Business Insider suggests that “Yelp is Groupon without the cash flow,” basing its comment on Yelp’s increasing marketing costs for customer acquisitions. But to us, Yelp is working to get over a tipping point. And unlike Groupon’s one-time relationship with local businesses, Yelp is working on Yellow Pages-like renewal rates.

In fact, the key to Yelp is to continue its ability to maintain and leverage its huge user base; satisfy advertisers; and stay abreast of social media trends that help match users with establishments based on their interests. It won’t be easy and is not a sure thing. But Yelp’s trajectory to date has been an impressive one.

Shares of Yelp Searches

The walled garden approach may be history, as too many consumers are cut off from access. But companies still want to control customer activity, and will now pursue more of an “open garden” approach, suggests Halogen Media’s Peter Horan, a former leader at IAC and GoodMail.

Horan, who was speaking last week at DMS ’11 in Denver, says that the trend is perfectly clear in Zagat’s passage from a standalone premium product to a Google property, where Google will seek to open it up and grab more diners as they shop for restaurants. “Increasingly, we ‘re seeing people point to a place,” says Horan.

Google, Amazon, eBay and Apple will all be eagerly seeking such open garden opportunities, Horan adds. The first click represents “upstream control of the customer.”

Horan notes that the battle for local itself will be differentiated between “efficient” local and “effective” local. Efficient local has been the common approach but it has just two percent penetration, he says. Citysearch, with its huge sales force, was probably an example of this. But effective local is a guy going down the street and swaying: ‘Mr. Florist, do you want to work with us?’”

Merchant Circle might be more typical of effective local, even with a small staff of 25 people. The Reply.com property has 1.6 million SMB accounts. Horan, who invested in MerchantCircle when he was at IAC, appeared on the DMS panel with MerchantCircle co-founder Ben T. Smith IV and Reply.com CEO Payam Zamani.

Google’s march into local reached another milestone today with the acquisition of Zagat, a major, international provider of high end restaurant and lifestyle reviews in 100+ cities.

Zagat remains a major player in a reviews space it pioneered in 1979. In addition to hosting its patented “30 point” reviews from some 350,000 “surveyors.” Zagat has a print, pocket-sized restaurant directory product that is often sold as a sponsored corporate giveaway. Online, it provides “Zagat Exclusives” deals using the Reach Deals platform, and also, widely integrates its reviews with key players for more traffic, including UrbanSpoon, OpenTable and New York Magazine.

While Zagat is protective of its premium firewall, a February relaunch included more free content. The company also has very active smartphone apps. In 2009, the company also started expanding its platform to medical reviews via Wellpoint/Anthem Insurance; part of a broader licensing effort that also included Priceline, Diageo liquor…and Google.

In truth, however, the closely held, 110 employee company was slow to react to the Web, and has basically underperformed, opening doors for companies such as Yelp and UrbanSpoon to gain a foothold, especially among younger audiences and with more mainstream restaurants. Zagat had tried and failed to sell itself for $200 million in early 2008, but apparently did not find real interest at that price point.

Google’s failed effort to acquire Yelp in 2009, in fact, probably set the Zagat acquisition in play – as did the retirement age of founders Tim and Nina Zagat. We believe Google will focus on the reviews platform, and the archive of reviews, and probably de-emphasize the premium products.

Groupon has postponed its IPO roadshow and is re-evaluating the timing of its IPO on a “week by week” basis, according to The Wall Street Journal. To us, the delay is not really a surprise. The company has been hit by a rash of questions about its accounting methods, recent sales trends, and its overall prospects for profitability. The stock market itself is very volatile.

In our view, the delay could work to Groupon’s advantage. Specifically, a delay might allow Groupon to add heft from new programs that are important to the company’s future, such as Groupon Getaways travel, and the GrouponNow “instant deals” program. GrouponNow uses the same customer base as Groupon, but adds a new dimension by enlisting a comprehensive set of local businesses for promotional discounts, rather than just a few businesses at a time for daily deals.

But there could also be a backlash if products like GrouponNow don’t work; Groupon’s overall results were to fade; or if new rivals such as GoogleOffers were to show that they will seriously cut into market share. If the IPO were not to get out, of course, there would obviously be negative implications for companies such as Living Social, which are basically waiting on deck for their own IPO.

Should we be mentioning Amazon Local in the same list of erstwhile “Groupon killers” as Facebook Deals, Google Offers , AT&T offers and others?

As the online retail giant launches its 30th local site – starting in Boise in June and now heading into NYC — we’re certainly watching carefully. What we’ve seen is that Amazon has assembled the building blocks very carefully, buying Woot, the electronics deal provider; investing $175 million in Living Social, which presumably gives it some syndication advantages and international play; and building in some very interesting and valuable network effects.

For instance, we like that Amazon automatically IDs your user name (and location). Like Facebook.
Moreover, you get extra points towards an Amazon gift certificate –5, instead of 3 — when the Amazon credit card is used for buying local offers. There is even some potential advertising on the new edition of the Kindle that requires you to accept advertising in return for a subsidized price

Out of the box, Amazon Local is relying on syndicated deals from the likes of Living Social and 6pm – a strategy also deployed by FaceBook and New York Magazine. It is also adding some deals directly from the Amazon site, for watches and other goods (per Mashable).

We are, of course, expecting Amazon to be much more than a marketing channel. The company is apparently planning to hire a wide range of personnel in coming months, and has been advertising job positions.

Of course, when it comes to a local offering, Amazon has stumbled before. The A9 directory, was well executed, with an early version of street view. But ultimately, it was not supported by Amazon. Something tells us, however, that Amazon is going to dig deep with AmazonLocal. It seems to have made a strategic decision that it has to be part of the deals space, as it watches previously unrelated companies such as Google, Facebook and Groupon go for a leadership position.

Google has acquired Dealmap, a deals aggregator and exchange, and will presumably use it to complement its own sourcing of deals for Google Offers, the daily deal site now in New York, The Bay Area and Portland and coming soon to Austin, Boston, Denver, Seattle and Washington, DC. Terms were not disclosed.

Dealmap, a 15 person company, was launched 14 months ago at BIA/Kelsey’s Marketplaces conference in San Diego as a spinoff of Center’d, a women-oriented hyperlocal site that had focused on sophisticated mapping and sentiment analysis. Originally launched as FatDoor, Center’d has raised $8.9 million altogether. We estimate that roughly 50 percent, or $4.5 million, has now been spent on developing The Dealmap.

Currently, the site aggregates 400,000 deals, from 450 local and daily sources. It claims two million users, including one million mobile users. It also boasts a large distribution network of 50+ publishers, including such players as Superpages, CityGrid, Local.com, Bing.com, T-Mobile.com, MerchantCircle, American Towns, Reqall, Mypoints.com and Topix.com.

Google’s acquisition of Dealmap provides strong additional validation for the aggregator space, which includes such players as Analog Analytics, Tippr, Yipit, Local Offer Network, Adility, Monster Offers and 8Coupons.com. In the wake of this deal, it is hard to recall that it was only a few months ago when the space’s future was questioned by many in the wake of Living Social refusing to let its feeds be packaged with other daily deals on a level playing field.

Dealmap, however, has been among those exempted from such bans, presumably because it does more than simply list deals. Since then, we’ve seen new funding coming in. Yipit, for instance, recently raised $6 million.

CEO and Co-Founder Jennifer Dulski recently told us it was too easy to think that aggregators weren’t bringing real value to the table. The types of things that Dealmap does are “way more complicated than they’d do on their own,” she said, noting the site’s extensive geo-coding and other features. “We are getting comprehensive access to deals from the most number of sources, focusing on high quality deals, and distributing to as large an audience as we can.”

Will deal commissions continue to flow as deal exchanges become more the norm? Dulski has consistently said that the company hasn’t had trouble collecting commissions for deal referrals. Other sites have hinted at problems getting commissions, especially from the largest players that don’t need as much help. Aside from commissions, revenues also come from display and text advertising.

During a presentation at BIA/Kelsey’s Deals3D conference in San Francisco last month, VP Dan Visnick noted that aggregators have added value because they provide sourcing for a broad number of categories, rather than simply relying on Shopping and Dining to carry the day – even though those are the most searched for entities. Aggregators such as The Deal Map bring in hundreds of deals for valuable categories such as hotels, dental and services, he noted.

In the mean time, Dealmap’s competitors seem to look favorably upon Google’s acquisition — at least, in the short-term. “Aggregation thrives on fragmentation. So this is another validation of the aggregation model and the many competitors that it serves. It also throws some water on predictions that the industry will consolidate to the smallest handful of competitors,” says Local Offer Network CEO Dan Hess.

HopStop, a directions portal that competes in the segment against an ever-building Google Maps, today announced its plans to fight the Big G, including new markets, content partners and features. The 20 person site, which gets about 1/3 of its traffic from destination and SEO traffic, and 1/3 from affiliate partners, has added 20 markets and is now serving a total of 57 markets (including 4 markets outside of North America: London, Paris, Moscow and St. Petersburg).

The company’s partnerships – new and old — include hourly car rentals from Connect by Hertz with integrated driving directions; real time booking capability via Limos.com; daily deals from Groupon; local events from Zvents; and business reviews via Yelp.

According to CEO Joe Meyer, the revenue model with each partner varies, and includes CPM, CPC and affiliate sales. The company is operating profitably and not actively raising funds, he adds.

HopStop has also added new social media tools, including a feature that enables users to share travel plans with friends. Other features include walking directions and intercity travel via Amtrak and bus routes.

Meyer says that the company’s biggest defense against Google and other competitors is its passionate. social media- driven user base, with 37 percent of users using the site 25 times a month or more. Seventy-two percent used the site within 24 hours of their last use. (We provided a full profile of the company in May 2010.)