Microsoft's MSN division is set to add a local search tab to its search engine that will return location-specific listings for businesses and people.

The new MSN Local Search service will be offered in beta, or test, mode, and will also place query listings on a map from the company's MapPoint Web Service, according to a Microsoft official.

MSN Local Search also will feature aerial images when they are available, said Erik Jorgensen, general manager of MSN Local Search and Maps.

In addition to listings, the local service will also deliver relevant Web pages, chosen using an existing MSN technology called Near Me that identifies pages in the search engine's general index with location-specific tags, he said.

MSN Local Search will later be enhanced with the launch of MSN Virtual Earth, a new service that will let users superimpose driving routes, places and weather information on maps and satellite images. MSN Virtual Earth should become available before the 22 September, Microsoft said last month.

Once MSN Virtual Earth is in place, users will be able to engage in a truly "immersive" local search experience, by navigating on a map or aerial image, getting a sense of what an area is like and discovering options on, for example, where to have dinner and go to a play or a concert, Jorgensen said.

"We're still in the early stages of local search. There's still a lot we can to improve and further innovate," he said.

Microsoft is trailing its main search engine competitors in local search. Google, Yahoo, Ask Jeeves and America Online all have local search tabs on their search websites. Google in particular gives users the option of viewing not only maps but also satellite or aerial images, a similar concept to the one Microsoft is pursuing with MSN Virtual Earth.

Demand for local search services has grown as users discover the benefits of running queries that limit results geographically, a convenient feature when looking for local businesses and places. Meanwhile, local search is also attractive to advertisers, particularly those that operate in specific cities or areas, because they can target their ads only at Web searchers looking for information about that location.