Our regular readers know that the theme of this blog is Local 2.0: where local meets social. We strongly believe these two worlds who might seem so far apart today are quickly colliding. So, it’s always with great pleasure that I read an interview with someone from a large organization like Yahoo! confirming what we’ve been claiming all along.

AdAge.com has just published a Q&A with Frazier Miller, a new member of the Yahoo! Local team. I don’t know Frazier but I’ve had the chance to meet Paul Levine, head of Yahoo! Local, a couple of times over the years. Smart people.

Highlights of the interview:

• On the fact that Yahoo!’s local search is really social search: “…I very much feel like 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. … It’s more of a research and comparison shopping case. Moving forward there’s a lot more around discovery and exploration. You see it in terms of Flickr, YouTube, users going out there to explore and discover and be inspired. We’re look at our acquisition of Upcoming and how do events come to play in this. We are holistically helping users figure out what they want to do in planning their local lives.
• On how they make money with local search: “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”
• On who’s their biggest competitor: “Our strategy of focusing on user is certainly a big difference from Google, which takes a technical approach to these areas. We feel good about our leadership position. But there are also vertically specific players: neat services that really focus on one particular area. We look at what features are coming out from the smaller, more vertical players. Insiderpages, Judy’s Book, Angies’ List. These smaller, more vertical players are generally trying to tackle more specific demos. “

Greg Sterling comments on his blog that he “generally agrees with this viewpoint regarding the evolution of the product and the role of “online word of mouth” (user reviews and referrals). Traditional word of mouth remains a huge source leads for both consumers and local businesses, even as elements of that phenomenon move online.”

Related: Peter Krasilovsky tells us on the Kelsey Group’s blog that ” Insider Pages, whose ranks have fallen from roughly 30 employees to 10 since the departure of founder and CEO Stu McFarlane. (Andrew) Shotland’s departure, and others down the line, suggests a dramatic overhaul/downsizing is in the works under new CEO Mitch Galbraith”

What it means: Yahoo! is trying to differentiate themselves from Google by using the social search positioning. Obviously, this applies to Local as well and I really like the concept of “holistically helping users plan their local life” by combining structured business data with user-generated information from Yahoo! Local, Flickr, Upcoming.org or any other sites Yahoo! owns. In any case, they’ve clearly put a stake in the ground.

Harry says: Merchants don’t understand bidding? Maybe Google understands something that Yahoo doesn’t. What he should have said is merchants prefer a subscription fee (as long as it’s effective and provides tangible results)… IMHO, WOM is key. It’s also sometimes toxic. It’ll be interesting to see how Yahoo balances WOM and increasing merchant revenue.