Nov. 19 (Bloomberg) -- IAC/InterActiveCorp redesigned its CitySearch local-entertainment Web site, adding social- networking features to increase advertising sales and encourage users to share advice about neighborhood businesses.

CitySearch users will be able to highlight restaurant reviews and other recommendations by friends at Facebook.com, the largest social-networking site, under an agreement between the companies, Jay Herratti, head of the IAC unit, said in an interview. CitySearch's home pages on about 140 cities will expand to 75,000 covering specific neighborhoods.

The redesign unveiled today highlights IAC Chairman Barry Diller's strategy to emphasize local advertising, now dominated by Yellow Pages and newspapers. Money shifting from phone books will triple local Web-search ads to $3.9 billion by 2012, said Matt Booth, an analyst at Kelsey Group in Pasadena, California.

``The money is shifting, and fast,'' said Booth. CitySearch is ``actually one of the companies that will benefit from the downturn. When the last bubble burst, a lot of their competitors blew up.''

CitySearch, which struggled for years to make money, is now profitable and brings in about $100 million in annual sales, said Eoin Ryan, a spokesman for New York-based IAC. The unit makes most of its money selling ads to locally focused small businesses such as restaurants.

``CitySearch is going hyperlocal,'' Herratti said. ``We're going from being a city guide to being a neighborhood guide.''

New Look

The new look blends editors' picks of restaurants, plumbers and other local services with user recommendations. CitySearch wants its professionally produced content to let it stand out from other sites like Yelp.com that offer user recommendations, Herratti said.

The Facebook relationship helps by moving reviews from people a CitySearch visitor knows to the top of the consumer ratings list, said Elliot Schrage, a vice president with the social-networking company.

``The future of information that's most useful is what comes through the lens of people you care about,'' said Schrage, whose company is based in Palo Alto, California.

The new design also includes an upgrade of CitySearch's mobile capability, Herratti said. Users will be able to post business reviews directly from mobile phones and use mobile devices to get recommendations, the company said.

Both the existing CitySearch site and the new version will be available until early next year, Herratti said.

IAC fell 90 cents to $14.49 at 4:29 p.m. New York time in Nasdaq Stock Market trading. It has dropped 38 percent this year. The company spun off Ticketmaster, the HSN home-shopping network, the LendingTree mortgage-referral business and the Interval International time-share network in August.

To contact the reporter on this story: Tim Mullaney in New York at Tmullaney1@bloomberg.net

Last Updated: November 19, 2008 16:38 EST