eMarketer has an interesting study today of the shift of local ad dollars away from traditional offline yellow pages to search engines in the United States. The argument goes as follows:

• Local offline yellow pages directories are a big market ($12.4 billion), particularly compared to national offline yellow page markets ($2.2 billion).
• Internet yells page directories (IYPs) don’t function as well, because people searching in a phone book go to the business categories as determined by the book’s index. People on the Internet go to search engines and do keyword searches.
• If only 20% of the ad dollars from offline classifieds and directories (a combined $37 billion market in the US) to online classifieds and search engines that would add up to $7 billion of additional local online ad spending in the US alone.

The following chart demonstrates both the current power and future potential of online classifieds and local search markets in the US.

Internet Yellow Pages sites, on the other hand, are expected by most analysts to grow a lot more slowly.

eMarketer notes that not every analyst supports the conclusion that local search will grow more quickly than Internet Yellow Pages.

But it appears to be clear that, regardless of to which destination they might go, people are moving online to find out more information about local businesses, whether in the form of Internet yellow pages, local search, local directories or newspapers online.

It’d be interesting to see the relevant numbers for Europe.