Yahoo offers free web space to small businesses

Yahoo is giving away web page hosting services to small businesses, in a bid to bolster its search and related advertising business.

The company yesterday introduced a new service that lets any small business sign up for a free web page to appear in Yahoo's local directory. The move will help otherwise unwired small businesses come online, said Paul Levine, Yahoo's general manager of local services, as well as help consumers find more local information.

"Our hope is over time that certainly Yahoo will be top of mind as they think of promoting their site," or for other services, Levine said in an interview.

Search-engine marketing is a multibillion-dollar sector of the online-advertising business, and web providers have earmarked local searches as healthy ground for future growth. Still, many small businesses have yet to operate a website to be found in a search engine. More than half of the 20 million small businesses in the US are without a website, according to estimates from the Kelsey Group.

If Yahoo can encourage adoption among business owners, it can simultaneously improve local searches and promote advertising services, among other things. Gary Stein, an analyst at Jupiter Research, said Yahoo could eventually sell its premium web hosting services or domain names to its free subscribers.

"In local, the big hurdle is to get businesses a website so they can do something with a click," Stein said. "For Yahoo, server space is an easy thing, and if it means they've established a relationship, they have multiple services to offer these guys down the road."

Stefanie Olsen writes for CNET News.com