MerchantCircle is joining the ranks of companies creating local and vertical content, including Demand Media, Associated Content, Examiner.com, AOL’s Seed and Patch, Perfect Market, Helium, Brafton Media and others. MerchantCircle’s new Local Content Studio is being led by Andy Halliday, who many of us remember as former head of e-commerce at Excite@Home and who has since been engaged in several entrepreneurial efforts.

The basic idea for MerchantCircle’s Local Content Studio, and the others, is to create optimized content that can be used to economically and efficiently spur local traffic to its directories and profiles, while driving ad impressions. Presumably, MerchantCircle will have an edge over rivals via 1.3 million SMBs that have claimed profiles on the service, covering 95 percent of U.S. communities.

The SMBs may be seeking to build attention for themselves (i.e., real estate agents), and/or earn awards or make a little cash — $1 or $2 per article. The cash can eventually add up: Some SMBs, in early testing, are already being sent checks for $300 and up.

The Studio, in fact, may be seen as an extension of MerchantCircle’s Answers division, launched last September, in which members are encouraged to provide their expertise on a wide range of subjects (where to fix, how to fix, etc.). Both efforts are part of a broader effort to broaden MerchantCircle’s identity and engagement with consumers and businesses beyond the core directory.

At the heart of the Studio is an online authoring and publishing system which can support thousands of simultaneous content development projects. The projects can be claimed by local merchant members or other writers remotely, submitted, reviewed for approval or corrections, and published to local and topical “Expert Pages.”

MerchantCircle VP Darren Waddell says the creation of the Studio does not alter the company’s extensive and successful relationship with Demand Media, which includes syndication of MC’s Answers, domain registration for MC members, and expert articles and other content to MC profiles for $9.95 per month, among other activities.

MerchantCircle’s efforts to launch more local content is not occurring in a vacuum. We have watched with interest as Yahoo has been developing local news and information via the hiring of writers in New York and San Francisco, and recruitment of writer/editors in San Jose, Chicago and Denver, per reporting in paidContent. Their written and edited material will likely be paired with material from Associated Content, which Yahoo purchased this spring. It represents a very different take from Patch.com, which is hiring journalists for hyperlocal reporting in up to 500 communities.