Yahoo! Local has rolled out some new features to increase the Web 2.0-ness of its local search product:

• RSS feeds. You can subscribe to feeds of all reviews near you. If you find a reviewer you like, you can stay up-to-date on his or her reviews.
• A “first reviewed by” designation to highlight contributors who are the first to review a place.
• Attribute drill down. You can narrow your search using filters such as “family friendly,” “casual” or “elegant.”

It’s been a few months since I last checked in on Yahoo! Local. Overall, it’s a huge improvement. It has a ways to go before catching category leader Yelp. (The metric being by my subjective opinion of product quality.)

Yelp has had the first two features for at least a year.

Among the local players, Yelp has had the best incentive system for contributors. Its “First to Review” designation is one of many things that Yelp does to encourage frequent participation. An “Elite” system rewards frequent contributors with a badge on their profile and invitations to parties. The front page of the site highlights a review of the day. Featured Yelpers also appear on the home page.

It may sound corny, but such incentives are important to keeping people engaged. Most social systems have some sort of perk system, including ODP’s edit-alls and metas and the Wikipedia cabal.

Although Yahoo’s design is more visually appealing than it used to be, it’s still cluttered.

Unlike Yelp, the map scrolls off the search results page, making it hard to see where results 3-10 are located unless you have a very large screen.

Getting reviews is more work than it should be. Yahoo! breaks its 69 reviews for The Italian Store across 29 pages, 3 at a time. Yelp shows all 42 of its reviews on one page, making it very easy to scan.

Then there’s the ads. I’m all for ads — I work in the Web space and like to get paid — when they’re relevant. The ads on Yahoo! Local are anything but. Here is an example of the ads that appeared above the listings for restaurants:

The top two ads are for services that compete with Yahoo! Local. Ads on the side (not shown) pitched “Watch mouth-watering videos of Oklahoma’s best restaurants” and one from Target offered “Find restaurant online. Shop & Save at Target.com Today.” (I’ll admit to clicking through on the Oklahoma ad just to see what would constitute a mouth-watering video of Okahoma restaurants. Unfortunately, they linked it to a video of a bad rendition of Rudolph the Red-Nosed Reindeer.)

I understand that local advertisers are scarce, especially outside the Bay Area. But Yelp takes the right approach.

More on: local search, yahoo, yelp

Disclosure: I used to work on local products for AOL.