The big problem with Google’s local results, up until now, is their reliance on reviews from other Websites. Sure, Google has its own ratings and reviews, but for any given business, links to Yelp, UrbanSpoon and other sites are more prominent. And rightfully so; those sites have far more user participation than Google does on its own.

Hotpot is an attempt to build Google’s review database a lot faster, while also making it more social.

When you plug a location and the thing you’re looking for into the search bar, it delivers a big grid of results, with thumbnail images and user ratings. You can save places for later review, cross them off the list or add a rating yourself. When you rate a place, a little text box flips open, encouraging you briefly describe what you liked or disliked. The review and discovery system is quick and simple, which will go a long way towards encouraging people to participate.

Hotpot also ties in to Google’s new Place Search, which senses when you’re looking for local businesses and prominently lists them atop search results. Based on your preferences recommendations from friends — added manually by e-mail address — Google suggests related businesses. Ratings and recommendations are also available from Mobile maps on Android.

Hotpot isn’t perfect. When you click on a business, the Place page that loads feels like a completely different website. Google needs to bring more data directly into Hotpot to make it feel like a complete service. I’m also still missing the granular information Yelp provides — little things like whether the place has delivery or accepts credit cards. Clearly, Hotpot has a long way to go.

But between more prominent search placement and a new website to encourage user participation, Google is well on its way. If I ran Yelp, I’d be a little nervous.

The newly-announced Place Search will be part of standard Google search. When the engine thinks you’re looking for local information, it returns mostly local businesses as results. Google already does this to some extent, but only in a small bubble of listings next to a local map. The new results have longer descriptions and review snippets, and when you scroll down the page, the little map follows along in your browser window. (Place Search is rolling out over the next few days, but you can see a preview here.)

Google is also adding a “Places” link in the left sidebar, should you want to see only local results. This comes in handy when searching for a specific menu item or attraction, like “foosball,” which might not trigger Place Search on its own.

As it stands, Yelp is still my go-to resource for finding local stuff. The site is simply too good at being granular. When you want food, there are check boxes for category, price range and neighborhood. You can sort by rating and search within user reviews for specific terms (useful when 99 percent of reviewers are discussing the dinner menu, but you want to know about brunch). You can even filter out places with specific features, like reservations or delivery.

Until Google adds some granularity to its Places results, it won’t be nearly as useful as Yelp, but the very idea of automatically getting local results in your general searches is still a big step. It moves Google closer to delivering more information directly, instead of referring you to a link containing that information.

Place Search also ensures that you’ll see Google results before you see anything from Yelp, CitySearch or other local directories. I’m not sure how useful that’ll be for users — I like that Yelp has really good Google juice right now — but it’s definitely a big benefit for Google.

TechCrunch’s Eric Schonfeld reports that Yelp’s U.S. traffic has grown 80 percent over the last year, to 8.6 million unique visitors in July. Citysearch is still ahead with 15.4 million unique visitors in July, but it’s not growing.

That spells trouble for Citysearch, because Yelp is only going to get better as more people use the site.

This isn’t a perfect analogy, but I see Yelp as the Wikipedia to Citysearch’s Encyclopedia Britannica. Sure, both sites contain user ratings and reviews, but Yelp is almost entirely powered by them (scandals aside), while Citysearch remains anchored by editorial hands. Visit a restaurant page on Citysearch, and the first description you see will be from “The Editor.” Go to Yelp, and you’ll get snippets of user reviews, highlighting the menu items that are mentioned most.

Yelp’s community focus provides an immediate impression of the business by consensus. Often times, I need only glance at a restaurant review on my iPhone to know if the place I’m standing in front of is worth going inside, and what item is the best on the menu. This experience only improves when more people are contributing to the discussion.

A restaurant reviewer might protest, arguing that consensus is no way to judge a restaurant or business. That’s a valid point, but Citysearch doesn’t provide in-depth reviews, either. (Who is “The Editor,” anyway?) The result is a lack of identity compared to Yelp’s strong sense of community.

Citysearch executive Kara Nortman tells TechCrunch that it’s got some new strategies in store, such as a “neighborhood platform” that will be filled with “trusted content.” I’m not sure what that refers to, but I’m guessing Citysearch will try to pride itself on information that’s more reliable than Yelp’s.

The only problem is that Yelp is growing more reliable every day. I don’t need a trusted advisor to tell me what to eat at a restaurant when there are hundreds of people who are already saying the same thing.

Moncole uses the 3GS’s camera and compass to let you point the phone at a locale and see Yelp listings for nearby businesses bobbing along on top:

It’s a neat effect, although I’m not sure if it offers any real advantage over a more traditional map view–the Yelp listings are small enough that they’re tough to tap with your finger, and they don’t make clear where the establishment in question is. And as you can see, some of them even get covered up.

As ReadWriteWeb has reported, other existing iPhone apps are adding augmented reality, too. It’s a cool idea even if the first killer app hasn’t arrived, and you gotta think we’ll see increasingly sophisticated use of it. Me, I want to be able to aim my camera at a person I don’t quite recognize and be reminded who they are…

Wanna hear this morning’s news?

The Pre will have games.

Dell attacks Psion’s “Netbook” trademark.

iPhone turn-by-turn GPS.

Yelp accused: Suppressing negative reviews?

Dismantling 17-inch MacBook Pro.

$50 for unlimited phone calls.

Google demos iPhone offline Gmail.

Dell debuts Mini 10 Netbook.

Google Street View case dismissed.

Lenovo making jumbo-sized netbooks?

Sprint loses a million customers.