Tech Industry

Yahoo offers free hosting to small businesses

Service will let any small business sign up for a free Web page to appear in Yahoo's local directory.

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

The Internet company on Wednesday introduced a 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 search as healthy ground for future growth. Still, many small businesses have yet to operate a Web site to be found in a search engine. More than half of the 20 million U.S. small businesses are without a Web site, according to estimates from the Kelsey Group.

If Yahoo can encourage adoption among business owners, it can simultaneously improve local search 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 Web site 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."