In some cases a directory search is a good thing. Local is one of those cases, and something that is tremendously broken on the web. I'd much rather go to a directory of pizza places in my area than do a keyword search of pizza. Yes this is Yahoo, but local/SMB is a huge untapped market that is not served by the current web.

The only local business I find with websites are the ones that pay some fly by night "web designer" to put up some BS templated site with little info for $2k. Here businesses can do the same thing, but also control their site, get SEO, advertise, and get analytics for less.

This is probably referring to local business directories, which Google uses in part to drive their local search listings (the results with the map & location pins).

That being said it's ironic that Yahoo is providing a service to help people rank higher on Google.