Yahoo to Offer Free Websites to Small Firms

Yahoo Inc. said Wednesday that it would help local businesses such as diners and plumbers set up websites as the company seeks to win a bigger share of the Web-advertising market.

Small companies will be able to set up five-page websites for free using a Yahoo template, the Sunnyvale, Calif.-based company said. Yahoo will include advertisements for its own products on the sites, spokeswoman Diana Vincent said.

Yahoo is adding services as it battles Google Inc., owner of the No. 1 search engine, for a growing amount of advertising on the Web. Internet ad sales will jump 25% this year to $8.3 billion, the biggest gain of any media, according to advertising firm Universal McCann.

Shares of Yahoo slipped 68 cents to $33.60 on Nasdaq.

More than half of the 20 million small businesses in the U.S. don’t have websites, Yahoo said, citing consulting firm Kelsey Group. The free websites will be included in the local-listings area of Yahoo, the company said.

Yahoo will sell other services to small businesses that sign up, such as local advertisements for $9.95 a month or online stores for $39.95 a month, the firm said.