Today, AutoTrader.com announced its new vertical search feature – called "Find Your Dealer." An analyst from the Kelsey Group, Matt Booth, has an interesting take on this.

No doubt, the online/offline classifieds business is massive – with about $5.2 billion in revenues for 2005. Well, companies like Google and Yahoo! want a piece of the action.  According to Kelsey, auto dealers are upping their ad spend for online – from 6.7% to 8% during the past year.

Yet, success in local search is quite different than national search.  National search can be done with sophisticated automation techniques.

However, with local search, there really needs to be a sales force that meets with local businesses.

I had a chance to talk to Booth, who said:  "For a vertical like automotive, having a deployed sales force is an enormous advantage.  Dealerships are a handshake business."

Thus, the local strategy for Google is likely to partner with companies like AutoTrader.com.  According to Booth:  "Google will build the Base product to collect this data from user submissions and partner for the rest. Then they'll run AdWords around the 3rd party content."

Actually, Google's move into autos – and other verticals – can pose a big threat to eBay.  After all, eBay derives a lot of revenue from autos.

You can see my full interview with Booth at my blog:

Booth interview

Booth's blog entry