AT&T Inc. has updated its Yellow Pages application for Apple’s iPhone to include local deals from merchants and enhanced search capabilities.

The update delivers a completely redesigned user experience that offers more ways for iPhone users to find local businesses and discount offers. In addition to encouraging users to cash in on local deals, AT&T’s local search application also supports discovery and interaction with local businesses via display advertising and sponsored search results.

“The app automatically detects each user’s location and displays it down to the street address level, and in addition to the search box, voice search has been integrated,” said David Williams, Sunnyvale, CA-based vice president of mobile products at AT&T Interactive. “The major addition feature-wise to the YP iPhone app is that it is more than just a business finder—it can now be used to find nearby deals as well—discounts, coupons and specials available from retailers nearby.

“We have direct relationships with merchants, we are also aggregating deals from various third-parties,” he said. “We have integrated Valpak into the application, and there will be others moving forward.

“We’re now allowing them to take a digital version of their deals and use hyperlocal targeting to get those deals to consumers in on the go, in the moment.”

YP is designed to help mobile users find local businesses, events and ways to save money.

In addition to the iPhone version, there are YP apps for iPad, Google’s Android, Research In Motion’s BlackBerry, HP’s Palm webOS and Java as well as a mobile Web site featuring listings for more than 18 million U.S. businesses.

AT&T has relationships with advertisers and coupon providers such as Valpak to offer access to a range of local deals that are redeemable with no upfront purchase or additional steps.

App update
The next-generation YP application offers iPhone users a deals section to browse nearby coupons, specials and discounts across a variety of categories that can be redeemed on the spot or saved for later.

The application’s location-aware homescreen displays local weather and can be personalized to show nearby deals, local events and shortcuts to favorite searches.

Enhanced features of the iPhone application include location detection, which automatically pinpoints users’ location down to the street address, making it easier to quickly find nearby businesses.

Users can swipe listings for a quick-access menu to call, see a map or get directions to a nearby business.

While the new features are currently only available via the iPhone app, AT&T plans to roll out 3.0 functionality across additional mobile platforms shortly.

Those new features complement standard YP app functionality, including search by typing, speaking or browsing popular categories such as ratings and reviews.

The application provides access to thousands of video profiles of local businesses.

Users can share businesses with friends including via text-message, email, Twitter and Facebook.

There are seasonal “discovery modules” that provide timely suggestions for exploring nearby places to eat, drink, play and shop.

For example, there are Valentine’s Day-specific recommendations.

“Our application is a search app, it also has recommendations and we do sell display ads in it,” Mr. Williams said. “Businesses can buy ads to show up in search results, as well as display ads that will show up within our apps and across our mobile local ad network.

“If a pizza shop wants to buy the search term ‘pizza’ in their specific metro area, they can do so,” he said. “In addition to bundling, we can sell mobile as a unique product, and merchants are exciting about it.

“They know consumers are finding businesses and deals via mobile.”