The local paid-search market is expected to reach nearly $1 billion ($987 million) this year, up from $418 million in 2005, and continue to grow rapidly to 1.7 billion in 2007 and reach $4 billion in 2010, when it will account for 47 percent of local online advertising, writes MediaPost, citing a new Borrell Associates report, "2006 Local Search Advertising."

However, local advertisers are expected to decrease spending on online display ads and listings by 2010, with spending peaking at $5.7 billion in 2008 and coming back down to $4.5 billion in 2010 - nearer to the 2005 level of $4 billion.

Local businesses have begun to take to local paid search, notes ClickZ, reporting that according to Borrell just 5.6 percent of sponsored links on the major search engines were bought by local advertisers 18 months ago, but the proportion is now 36 percent.