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"Webwork, Cooking and Bottle Washing Services, 123 Main Street, Anytown, USA ######. Phone = Anytown's area code and local exchange #."
Makes sense, to whatever degree one is attempting to associate one's business with a location. Seems a perfect candidate for "fixing" in a future semantic web with a new version of semantic markup. For now, it's likely a matter of proximity of keywords, address info on websites, address info in WhoIs records, address info provided to any of the various data aggregators and data cleansers, local reviews that mention a business name on a local website, etc.
So far as optimizing "for local" methinks Google offers a better shortcut based upon "registering" your business name and address.
A directory listing is likely one small piece of the puzzle and, to whatever degree the directories fields allow for submitting localizing data (business address and phone) - go for it.
[edited by: Webwork at 5:30 pm (utc) on May 14, 2008]
One of the best pieces to optimize is the business name. Ideally, it could be optimized to begin with an earlier letter in the alphabet, and it should contain the primary business keyword associated with the business. Here's an example of a business name that could be made better:
Adding the business keyword could make it (and any page the biz name appears upon) more relevant for users seeking that type of business. Ex:
Zyman Inc. Plastic Molding
Cannot hurt to add the city name in:
Zyman Inc. Plastic Molding of Chicago
Now, the last prob is that on many internet directory pages, this business may appear nearly last or lowest in the listings. How about:
A Zyman Inc. Plastic Molding of Chicago
There are other, ridiculously harder optimizations which might further improve performance, including moving the business address closer to the city centroid, having one's address street renamed, etc. I'd call these "extreme local search optimizations".