Via Jeremy Z & John B - Yahoo! has launched a Local Yahoo! beta search product. Google also have a local search beta and Ask today announced a partnership with Citysearch to provide a local search component to ask.com.
John Battelle likes the new Yahoo! offering, Jeremy Zawodny (of Yahoo!) thinks it, "beat[s] the pants off "similar" services." As usual, the 'local' applies only if you happen to live in the U.S., cities such as Edinburgh or London just don't exist. Chris Sherman of SEW reviews it and concludes that Yahoo! local beta is an impressive debut with a clean intuitive interface. I prefer the look of Google's offering, but haven't used either sufficiently to comment on their respective pro's and con's.
Local Search is an important development in bringing users to the results they want with minimum clickage and Yahoo! are well positioned to leverage the huge amount of information they have garnered through customer relationships to this end. If Yahoo! additionally have a superior product, as initial anecdotal evidence suggests, then Google have another fight with Google on their hands.
Update: I notice there's an Australia & NZ Yahoo! Local Search. I'm not sure if it is the same offering, it doesn't shout 'beta' anywhere, but maybe there is hope for the UK yet...