A new service called Merchant Circle launched this week and has some potentially powerful tools for local small business owners, particularly those lacking a strong web presence already.

Merchant Circle has done something very unique in my opinion, they have taken some proven online advertising tools and married them with a local online network. When a business becomes a Merchant Circle member they get a mini web page and potentially higher Google and Yahoo rankings, but they are also have some tools to introduce other local business owners and create a linked network of mini web pages with blog like testimonial and ranking tools to add valuable commenting and content to each others pages – all in their town – further enhancing the value of the page and the network.

The service also comes with some basic list building and email marketing tools as well as the ability to place paid ads on the network. There is a free listing option and several paid levels with enhanced services.

I would love to see a small business in a small community dive into this service and proactively build a blog network of businesses in their town. I believe that business would do very well in the local search world.

They have loaded their system with many small local businesses to build the directory so at the very least you should go create or claim your free listing.

You can also find a review at cnet News.