Yahoo! recently redesigned their local search portal and made some significant improvements. (I find the user comments on the redesign entertaining. Users are always upset after a redesign – “I can’t find [insert the one thing you used] anymore.”

There are plenty of reviews (here and here) of the new site, so I won’t waste your time simply recapping what they’ve already said. Instead, I want to focus on the integration of “Neighborhood Groups”, which is easy to overlook. If you missed it, you can find this new feature near the bottom of the Yahoo! Local page after entering in your location info.

Neighborhood Groups

After a cursory review, the Neighborhood Groups feature looks to be somewhat of an afterthought (I’ll explain why shortly), but I think that it indicates the direction that they’re likely to take their product as local social networks blossom.

The idea is to get local people talking to each other about local business listings like restaurant reviews, vendor recommendations, etc. For example, one neighbor talking to another about the incredible (or not so incredible) restaurant that they ate at last night.

Why is this cool? Relevance and trust. My neighbor’s review about a restaurant is much more relevant to me than a review from someone I’ve never met. I know and trust my neighbor so when he says that the restaurant was great, I believe him. Or maybe I know that I have different tastes than my neighbor, which is also valuable to me, and I’ll be sure to avoid what he likes. Either way, the review is more valuable to me. And the same goes for my neighbors’ lawn care company, real estate agent, dog sitter, handy man, etc. 

But is this how it works? No, not today. Not yet.

If you visit http://local.yahoo.com/, under “Neighborhood Groups” the site asks, “Need a recommendation? Ask a neighbor in a local group”. So I clicked on “Search for groups near you”, you’ll get a list of groups, not neighborhoods, located in your area. When I did this, I typed in zip code 80027 as my location, and came up with the Louisville Runner’s Club, a group located in Louisville, Colorado.

Even though I didn’t get a list of neighborhoods, I was actually pretty excited at this point. I was expecting to find reviews from members of the Louisville Runner’s Club about the New Balance store nearby that has the cool machine that measures your foot for the perfect fit.

I didn’t find that review, which didn’t really surprise me, but what did surprise me is that I didn’t find any reviews from this group. Even more surprising was that there is no vehicle that allows me to do this.

So when Yahoo! asked me if I needed a recommendation and suggested that I ask a neighbor in a local group, what they’re really saying is, “hey, wouldn’t that be cool if you could do that?” Yes, it would. It would even be better if I could sort reviews by my friends, neighbors, and so on.

I’m pretty sure that Yahoo! has some of the data needed to accomplish this; they’re just not leveraging it yet. But it will be extremely valuable to businesses and consumers alike when this concept is further developed.