MerchantCircle is seeking to transform itself from a source of search engine leads for SMBs into more of a destination site that consumers and businesses will use over and over again.

The company reports 20 million unique visitors, which if calculated in a certain way, would make it the fifth-largest Internet Yellow Pages. It also has more than 900,000 small businesses that have “claimed” a page and may use the company’s robust tool sets and features.

While MerchantCircle already provides a number of features, such as Yelp reviews, just a small percentage use the site as a reference site, akin to an IYP. Company officials now hope to change that with two new programs: “Neighbors” and “Answers.”

Neighbors — not to be confused with Yahoo Neighbors, which also launches today — enables consumers to “follow” local businesses, Twitter style, for the latest promotions, coupons and announcements. Business owners can use the feed to communicate directly with their customer base and share information on deals and other things. Deals, especially, reflect one of MerchantCircle’s strengths, since its merchants use the service to publish thousands of coupons.

Answers is a consumer advice service, similar to ones we’ve seen with Yahoo Answers and vertical sites such as Avvo.com (lawyers) and Trulia (real estate). MerchantCircle’s idea is that small businesses will become more bonded to the service if they regularly communicate with potential customers. It says it has already had excellent response rate in a month of trials.

One would think that MerchantCircle may not be ideally positioned to provide such a core consumer service. But company officials note that its strength is not in the Yelp markets such as San Francisco and Los Angeles, but rather in small to medium-sized markets, perhaps up to 150,000 population, where it has achieved a viral effect of businesses recommending one another.