Google responded to a Wall Street Journal story about local search that makes a number of assertions about how local search works at Google. In the article WSJ said:
"The Internet giant is displaying links to its own services-- such as local-business information or its Google Health service--above the links to other, non-Google content found by its search engine.
[…]Those companies say their links are being pushed lower on the results page to make room for the Google sites. Critics include executives at travel site TripAdvisor.com, health site WebMD.com and local-business reviews sites Yelp.com and Citysearch.com, among others."
Google says "When people come to Google looking for info about places like restaurants, shoe stores, parks or museums, our goal is to provide them with answers as quickly as possible and presented in a way that's easy to read and understand. Sometimes the most useful info is a direct link to a business--other times it's a map or a list of review sites. As Susan and Udi wrote just over a week ago:
Answering users' queries accurately and quickly is our number one goal. Sometimes the best, most relevant answer to a query is our traditional "ten blue links," and sometimes it is a news article, sports score, stock quote, video, or a map.
When someone searches for a place on Google, we still provide the usual web results linking to great sites; we simply organize those results around places to make it much faster to find what you're looking for.