With local search expected to reach $81 billion by 2011, a lot of new competition and technologies are being attracted to the marketplace. After all, mobile web devices are paving the way for higher demand. Consequently, former near-monopolies such as the Yellow Pages are facing some of the fiercest competition imaginable. Rather than trying to beat them, however, the Yellow Pages is joining forces with the largest of search players: Google. The result promises to be a considerably rise in the PPC market.

The local search market has seen some interesting newcomers in the last year along. At the beginning of March, Search Big Daddy launched 337 local portals, and offered $500 of free advertising to new advertisers. Later that same month, ZipLocal relaunched with web 2.0 functionality such as an AJAX interface and personalization options. At the end of July, Google Maps added microformat support to their results, meaning that users could now email a single file containing a map of business listings.

The month of October alone, moreover, has seen a considerable rise in the, er, rise of local search. At the beginning of the month, the internet dinosaur (in both size and age) Network Solutions launched their ThinkLocal.com portals that feature maps, weather, a yellow pages like search for businesses, and user review features. One week later, HelloMetro added another 750 portals to its roster, and added 1,400 dotMobi websites.

With such heavy competition, it looked that the Internet Yellow Pages' (IYP) only wild card was that its listings are great for SEO. Basically, the business directory enjoys so much authority from the search engines that on a Google search for a local business, tat business' IYP listing was likely to rank higher than their own website. Consequently, the future of the IYP looked much like that of a middle man between those local search engines and business websites. Granted, this is not a position to pass up, but it does fall rather short of the near-monopoly status that the company once enjoyed with impunity.

Well, the Canadian arm of the Yellow Pages (YPG), seems to have not only recognized its position as a middle man, but embraced it, taking it to the next logical level. Essentially, the local businesses whose names for which the IYP listing often ranks better are the IYP's advertisers. Rather than just middle man the user and the advertiser, then, the Canadian YPG has decided to middle man Google as well. As Search Engine Journal reports:

Yellow Pages Group has entered into a new strategic agreement with Google to become the first Canadian based reseller of Google AdWords. Under the agreement, Yellow Pages Group will be able to provide its 425,000+ advertisers with setup and consulting on Google AdWords campaigns.
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“Small and medium-sized businesses need to be where their customers are, and increasingly, that’s online,” said Eric Stein, Director of Local Markets at Google. “Our collaboration with Yellow Pages Group gives local businesses an efficient, cost-effective way to reach customers and provides users with better local information through relevant ads.”

Considering the number of advertisers that YPG has, this is going to be huge for both them and local search. Basically, a slew of local businesses that would have otherwise taken a decade or generation to embrace PPC advertising now have an adserver that they have a longstanding relationship with to coax them into the online advertising market.

Once these companies have become more comfortable with both search engine marketing (at the local level) and PPC advertising, they will be more receptive to alternative to Google and its Adwords products. Consequently, a trickle down will occur, and the entire second-tier PPC industry will be able to ride on the tail of the growing local search market. Who would've have ever guessed that the Yellow Pages, of all advertising giants, would be the one to help bridge the gap between PPC and local search?