This is a potentially big deal, although there were many such free Web site offerings as recently as 2000-2001. To my knowledge, all of them failed.

But none of them were Yahoo!, which can subsidize the service as something of a "loss leader." And the market is now ripe for this offering: http://local.yahoo.com/freesite.

Quick thoughts (again, because I'm on vacation):

• This helps provide content to Yahoo Local
• It provides a potentially better user experience (more content) to reinforce usage of Yahoo
• It provides an opportunity for Yahoo! to upsell those SMEs that adopt slews of services

This is purely anecdotal, but one Bay Area small business owner whom I spoke to about this offering in the abstract said that she would pursue this "in a heartbeat.'

At Drilling Down on day 1, we'll have Yahoo's GM of Small Business Rich Riley joined by:

Rich Cannon, Area VP, Strategy, Interland
Jim Collins, CMO, Affinity Internet
Warren Kay, SVP, Business Development, Vista.com

. . . on a panel entitled: SMEs and Sites: Crossing the 50% Threshold