"This is only the beginning of a much larger search strategy," Justin Osmer, MSN product manager, said. "We're already well on our way to combining local search with more advanced online maps."

Indeed, industry watchers saw this week's release as a precursor to the pending launch of the MSN Virtual Earth tool, which lets users conduct virtual, aerial tours of multiple locations by layering multiple search results onto a map of aerial images, some of which will show locations at a 45-degree angle.

Virtual Earth will debut in "several months," Osmer said, and would afford a far more immersive experience than consumers are used to. "You'll be able to map out an entire evening's activities--from the bar to the restaurant to the show--and send it along with phone numbers and directions to everyone joining you that night," said Osmer.

Microsoft Chairman Bill Gates gave a preview of Virtual Earth last month, and MSN put a splash page on its site on Monday to whet users' appetites.

Analysts compare Virtual Earth to Google's upcoming service called Google Earth, a desktop feature meant to replace Google's existing Keyhole software. Google Earth is also supposed to overlay local search and driving directions on top of an aerial view of the globe, and allow users to view animated maps.

MSN is initially employing business and residential directory information from Amacai Information Corp. to power its new tool. MSN previously offered limited, geo-targeted search results through its "Near Me" feature, which was part of its overall Web search.

For MSN Local Search, online street maps from the Microsoft MapPoint service display the locale of local listings along with local search results. For some of the results, MSN also displays aerial images being supplied by a project from Microsoft Research called TerraServer-USA.

TerraServer is an online database of maps and aerial photographs of the United States, which the Microsoft's Research Center built in partnership with the U.S. Geological Survey. MSN will use TerraServer-USA's data to employ MSN Virtual Earth, Osmer confirmed.

This news story is important. I recommend that everyone read it.