Yahoo Local Listings Crushed by Merchant Circle Social Network
So what I think MerchantCircle offers that's going to crush Yahoo (and the YPs too, though I'll leave discussion of *that* industry to my esteemed colleagues) is the local business owner social network.

Because when local business owners invite others into their local networks they can put ads on *their* pages (sort of like comments in MySpace). In addition, a given local business page's site will also include all of that person's contacts within the local business community, giving their associates a little cross-linking boost and emphasizing their connections.

MerchantCircle makes it profitable (from a presence perspective) for business owners to invite other business owners into the fold - it becomes a sort of popularity game the way that MySpace is, which will drive their viral spread over Yahoo.

In fact, I think it will drive their viral spread even before MerchantCircle users start to notice an actual measurable return (through the redemption of coupons).