MerchantCircle is a small business community site with 1.6 million members. It’s actually touted as “the largest online network of local business owners in the nation.”

MerchantCircle has been tasked with curating the “/smallbusiness” hashtag on Blekko. Blekko says this will help it return results from trusted resources that are “free of spam.”

“The MerchantCircle community can help ensure that small business searches on blekko deliver the best of what’s available on the web, no small feat today given the explosion of spam across almost every search category,” said Blekko CEO Rich Skrenta. “This collaboration allows blekko to tap into the knowledge of small business owners, who are forced to compete in search with professional SEO wizards who want to get in the way of good information.”

“This partnership supports our commitment of ensuring our members and our organization are offering the highest quality local content across the Web and to all our customers,” said Darren Waddell, VP of marketing at MerchantCircle. “We are excited to partner with blekko — a recognized leader in search quality — to provide the best platform for merchants to share high-quality, original and trusted content.”

“I’m excited to hear that we can contribute to helping other small businesses find the right search results on blekko,” added Michele Gorham, a Small business owner and MerchantCircle member. “I love that MerchantCircle is always looking for ways to help make the lives of local business owners more productive and successful.”

Blekko has banned 1.1 million domains it has identified as spam, as the 20 sites most often identified as spam by users.

It’s quite interesting to see the differences in Google’s and Blekko’s methods of determining search quality, and even more so when looking at the sites that are actually deemed to be quality. For example, Blekko blocked eHow, but allows MerchantCircle – even has it curating a major slashtag. Google’s update impacted MerchantCircle negatively (at least according to the Sistrix report, which is most often cited in discussions on the subject), while eHow actually flourished.

The survey, conducted with 8,500 random small and local business owners across the U.S, revealed that 70% of these business owners are actively marketing their business through Facebook. This represents a 20% increase over 2010.

Most small businesses running on limited budgets (less than $2,500 annually) and 60% of survey respondents do not plan to raise their budget this year. This makes Facebook an attractive and cost-effective marketing tool for most local business owners.

Darren Waddell, Vice President of marketing at MerchantCircle said:

Online marketing continues to be a challenge for most local businesses, and many merchants are working with very small budgets and almost no marketing resources. The marketing methods we see gaining the most traction are therefore the ones that offer merchants simplicity, low costs and immediate results.

Facebook’s location check-in also seems to have been adopted quite well by small businesses. According to the survey results, 32% of small businesses saying they use the feature, compared with just 9% who have tried Foursquare.

An interesting statistic I came across recently indicated that a Facebook page or status update is 3 times more effective than a twitter “tweet” when trying to reach online consumers.

With Facebook now becoming more than just a social networking site and proving itself as the latest channel of online marketing its not too late for you to get your very own Facebook page.

We recently highlighted the need for small businesses to create a Facebook page including details on how it can stand out from the rest.

Originally published at iNeedHits

To sort of set the stage: the Merchant Confidence Index survey involved 8,456 U.S. local business owners, and was conducted between January 22nd and February 3rd.  So the results aren’t especially subjective or dated.

Otherwise, we’ll just note that the answers we’re focusing on came in response to the question, "Are you promoting your business with the following websites/services?"

As the above graph shows, the vast majority of small business owners are already making use of Facebook, and about one-third of the holdouts have plans to follow suit.  Not many people have either turned their back on Facebook or somehow altogether missed the phenomenon.

Meanwhile, Facebook Places is well ahead of Foursquare, Groupon, and Gowalla, despite all the hubbub (including a rumored $6 billion acquisition offer from Google) surrounding them in recent days.

Hat tip goes to Chris Nuttall, in any event.

"Our recent survey reflects continued uncertainty among merchants. Economic outlook has decreased to roughly the same level as November 2009, with most business owners continuing to think the worst is yet to come," said Darren Waddell, vice president of marketing for MerchantCircle. "However, we were pleased to see that most aren’t planning for layoffs or pay cuts for employees. Small business owners are continuing to become web savvy in their marketing by increasingly augmenting traditional advertising with free methods like social networking to generate additional business."

Among the findings of the survey were the following numbers for how people are promoting their businesses with various tools. It is interesting to see how little respondents are using some of the services attracting the most attention these days (mainly the ones furthest to the right):

Still, awareness of location-based services is on the rise. For example, MerchantCircle says today, 16% of merchants are familiar with Foursquare, whereas in Q1 of 2010, the number was only 8%. Likewise, 32% of merchants that are aware of Foursquare are using it to promote their business, compared to 25% in Q1.

It is worth noting that this is the first time social networking has eclipsed all other marketing channels to become the most popular among survey participants since MerchantCircle has been doing the survey.

"As you know, local players who focus on the consumer space have introduced gaming elements, like check-ins and badges, to add fun and interest and drive traffic to their local networks.," a representative for MerchantCircle tells WebProNews. "Yet none of those players have turned the model around and made local social networking into a game for merchants…until now."

"The project was designed to make MerchantCircle more fun and engaging, and help drive new memberships," the rep says. "The numbers show that even in the early stages, it’s working."

After just two weeks of testing, MerchantCircle says it saw a 123% increase in overall merchant-to-merchant connections overall, and a 59% increase in invitations to join the network. Merchants who become ‘Mayor’ of their city through in-network activities are rewarded with free advertising around the MerchantCircle network.

"A running leaderboard keeps the competition from getting stale in 7500+ cities and towns around the U.S. Currently the point system is simple, and in the coming months, MerchantCircle will introduce new ways to earn points and climb the leaderboard and become Mayor," the company says.

MerchantCircle has been doing some interesting things with local businesses. A while back they announced a partnership with Demand Media on local business Q&A search.

We recently looked at a partnership between MerchantCircle and Demand Media’s AnswerBag that presented some interesting opportunities for local businesses. However, a representative for MerchantCircle tells WebProNews the AnswerBag partnership "will not be live with international releases at this time. We need to build up our network of merchants internationally to help answer consumer questions."

Still, MerchantCircle was already getting a great deal of use before that partnership came along, and it will be interesting to see how it does in new territory.

"Our long term vision is to provide as many small businesses as possible worldwide, the same tools that millions of U.S. based merchants have been able to leverage," says chairman and co-founder Ben Smith. "Mom and pop businesses in other countries struggle with online marketing and its associated costs the same way American small business owners do. We have received a number of requests to expand MerchantCircle’s offering internationally, and we see significant potential to form partnerships in each country."

MerchantCircle helps small businesses network with one another and market their businesses with various tools. They must be doing something right, because they’re the largest local business social network in the U.S.

MerchantCircle has had a pre-existing partnership with Demand Media that functions in several capacities. For one, Demand’s domain registrar is used to give MerchantCircle businesses domains that MerchantCircle recommends based on their business profile. In addition, Demand Media content appears on merchant sites. For example, a plumber may have plumbing-related content from Demand Media on his site to make it more relevant and useful to users. Now, there is a new element to the partnership – Q&A.

Demand Media’s AnswerBag is a Q&A site, and the 122nd most popular site on the Internet, according to Merchant Circle. Now, AnswerBag questions will be routed to MerchantCircle businesses to answer when appropriate. This way, in theory, if a person asks a plumbing question, it will go to a plumber, and make for a more helpful and relevant answer. In turn, the MerchantCircle business (the plumber) will get more exposure, credit for answering (which can enhance the appearance of credibility), and even links – so businesses have an incentive to answer questions.

"The more you’re able to show off your expertise online the more likely you are to get more business," Waddell tells WebProNews. Through the partnership, MerchantCircle is basically providing greater distribution of the answer given. Plus there’s another perk: potential search engine traffic. "We’re a really good complement for SEO-savvy businesses to help people get more exposure on Google or other search engines," says Wadell. "A good complement that can help get them more traffic."

The AnswerBag deal isn’t the only piece of news. They also announced a partnership with HelloMetro, a company with hyperlocal sites for over 1,000 cities, serving between 4 and 5 million unique visitors a month. MerchantCircle will power its directories. 

MerchantCircle is also now leveraging the Yahoo Answers API to introduce even more questions to its merchants. They’re taking questions from Yahoo Answers and introducing them to merchants. They say they take only really relevant questions that pertain to categories that are strong in merchant’s circle, and again, merchants can get more links. If you go to a merchant’s listing page, you’ll see all the questions they’ve answered. You can see what they’re experts in, which can be a strong selling point for a business.

Q&A search is getting to be a big business these days. Even Google has recognized this, as evidenced by its recent acquisition of Aardvark. MerchantCircle has put an interesting spin on it that seemingly offers a fair amount of potential for businesses to capitalize on. With these partnerships, that potential should only grow.