Overture Services Inc., a unit of Yahoo Inc., on Monday launched a local version of its Web search advertising service, taking its battle with search rival Google Inc. into a new market.

Called "Local Match," the service allows small and regional businesses such as dentists, dry cleaners and auto dealers to advertise on Web search engines by paying to link their ads to key words, with prime rankings on a user's search commanding higher prices.

The new service is an extension of the booming Web search advertising business, also known as paid search, that has been driving sales for advertisers and revenue growth at search providers like Google and Yahoo.

Overture said its Local Match listings are now available on Yahoo and MyCity.com (http://www.mycity.com). They also will be displayed on other sites including Microsoft Corp.'s MSN, ESPN.com and certain sites within the InfoSpace network.

The service is available to advertisers regardless of whether they operate a Web site.

It also allows advertisers to pinpoint a geographic area - from 0.5 miles to 100 miles - in which they would like their ads to be shown, said Geoff Stevens, general manager of local for Overture.

Overture, which was acquired by Yahoo last year, pioneered selling ad space linked to Web search results, but had not offered a specific product targeting local listings -- a growing battleground for advertising revenue.

Google, the No. 1 search engine that has filed to sell shares in an initial public offering, rolled out the test version of its local product in April.

"Our research shows that slightly more than 25 percent of commercial searches performed by online buyers today are local, and we expect that figure to grow over time as local search capabilities continue to improve," said Greg Sterling, program director for the Kelsey Group.

Other rivals in the local Web search advertising market include Verizon, which in March relaunched its SuperPages.com online Yellow Pages site with paid search ads from FindWhat.com.

Shares of Yahoo were trading at $36.10, up 3.4 percent, in Nasdaq trade after hitting a session high of $36.27, a level unseen since late 2000.