Now Michelle Fitzgerald, ad solutions manager for Yahoo Local Network and Small Business, has pointed out to me that the Yahoo Directory "is virtually gone" and has been replaced by Y! Local. At first glance, Y! Local strongly resembles Yelp in that it includes the same five-star rating system, the same ability to create a profile, and the same capsule reviews. And that's not necessarily a bad thing -- reviews by local people for local companies, in theory, is a great way to promote smaller companies that don't necessarily have the big bucks to advertise and compete with larger enterprises.
Fitzgerald said that she suggests businesses start with Y! Local first with a free or paid listing to ensure they're getting picked up in search engines. "That same listing on Yahoo Local will get picked up in Y! Maps, Y! Travel, Y! Real Estate, etc.," she said. "Wherever and whenever a listing/business category is being queried."
As I said, customer-generated review sites like Yelp and Y! Local are good in theory -- let's not forget that Yelp has been weathering controversy with allegations of extortionist tactics by sales reps to get smaller businesses to buy ads and improve their profiles, which they can't always afford.
While there have been calls to boycott Yelp and for customers to instead rely on professional reviews, I think there's definitely a place for local, homegrown marketing. The best a business owner can do is pay attention to the needs of his or her customers and cater to them -- good customer service should keep 'em coming back.