• by Laurie Sullivan , Staff Writer @lauriesullivan, June 30, 2010

Foursquare gave local search a boost this week after announcing the 27-employee company closed Tuesday on Series B funding from Union Square Ventures, O'Reilly AlphaTech Ventures, and tech icons like Marc Andreessen's and Ben Horowitz's venture capital firm Andreessen Horowitz.

Littered with flaws, today's local search tools can sometimes present major headaches and problems for small businesses. Many listings are inaccurate, don't index well and even serve up with other company's information. That's despite Google's, Bing's and Yahoo's focus to try and help consumers find the correct number with one query on PCs and mobile.

Making a small business listing on the Web is too complicated. In Google, people must dig deep through tons of layers to claim their business, features in Google Maps that average small business owners might not know exists, or find it too difficult to use.

With more people relying on the search engines for information, you would think Google, Bing and Yahoo would want to make it easy and not require some companies, especially emergency services and government agencies, to edit and confirm business information online. I don't recall having this problem with paper phone books, such as the Yellow Pages, though I haven't used them for more than 10 years.

Foursquare makes it easy for businesses to get noticed and for consumers to find locations and information. It's become a hyper-local search engine for businesses and the $20 million could help the company build out search features, tags and linking that give consumers easy access to companies.

The VC funding, along with flaws from major search engines, could turn Foursquare's tool into the king of local search.

When Digg Account Director Emily Crume checks in on Foursquare it tweets the location and name of business on Twitter and puts a Google map of the area on her Facebook page. She checked into the Beverly Wilshire for a breakfast conference Wednesday morning and received a recommendation from a friend in her social graph about a nearby restaurant. The person checking in sees the reference, but not those who follow because recommendations come from people within your social graph.

But with the rise to the top there are always steep falls. And even a social hyper-local search service like Foursquare can escape the slide. Foursquare's location-based approach to marketing has enabled software developer Jesper Andersen to exploit a security hole in the service. He captures the locations of more than 875,000 users in close to real-time, regardless of their privacy settings.