Is there still a massive opportunity in local online?

Several hundred people at a Hyatt in LA think so.

And if you follow the local online business segment at all, there are a couple of bedrock beliefs that power much of the discussions in this space:

1. There is still tons of opportunity to connect local businesses to local consumers through digital publishing and marketing

2. Google is the 10,000-pound gorilla and you’re probably better see it as a partner, not a competitor, if you want to have a future

I’m at the Interactive Local Media conference in Los Angeles through Friday, analyzing the state of local business marketing online. (One of Serra Media’s partners, Julia Scott of BargainBabeLA.com, will be presenting on Friday, too.)

I’ll be posting updates to Twitter and you can find the conference stream by searching the hashtag #ILM09. If the morning sessions are any indication, there will be loads of good information presented here.

Already this morning, we heard about data that says that still only 42% of local businesses have a website, only 7% advertise online and only 14% have claimed their free profile page on Google. Clearly, there is opportunity here to connect buyers and sellers online. (And don’t even get us started on mobile.)

A number of companies are raising capital and funding business models to try to crack this nut. I’ll be looking for a few of the more interesting ones to profile here. On the radar from this morning are Kenshoo and Palore.

Kenshoo’s CEO asked for a show of hands this morning on how many people had heard of his company. A small smattering of hands went up. Which begs the 64,000 question: if Google can only get 14% of local businesses to interact with it for free, how will these new-age companies break through?

- Mark Briggs