As promised in our LSA conference coverage last week, here is a deeper dive on Facebook’s positioning and possible directions in local. I covered the topic in a bit more depth in my monthly Search Engine Watch column, including more comments from Facebook director of SMBs, Dan Levy.

This gains relevance in light of Facebook’s redesign of mobile venue pages (more soon on that). Meanwhile read below for an excerpt of the SEW column and you can read the entire thing here. Much more to come on this topic as we cover it in various reports and upcoming conferences.

I’m starting to come around to Facebook’s opportunity to tackle local. In the last few weeks alone we’ve seen some impressive numbers to support both local search usage, and SMB advertiser adoption. Many aren’t paying yet, but there are positives signs.

Facebook director of SMB Dan Levy announced at the Local Search Association show that 70 percent of Facebook users are connected to at least one local business page. And in total, there are 645 million monthly views for these pages.

This comes soon after the Comscore/Neustar/15Miles study that showed Facebook has the second largest app usage for local search, behind only Google. This was surprising because Facebook Local Search has mostly been buried, as mentioned.

In other words, this lead in local is more about Facebook’s overall reach and halo effect, than any extensively overt product positioning. So the question becomes what can be expected once Facebook does actively push harder on local search?

“[Figures] were a pleasant surprise,” Levy said. “It shows that people are turning to Facebook. We’ve been investing to have SMBs exposed, but the local search product is still under development and we want to make sure it’s ready before it’s front and center.”

The product updates we can expect are not just user-facing local features, but also merchant-facing tools for Pages. Think: appointment scheduling for home services, coupons and offers for retail and restaurants, or eCommerce where it makes sense.

This all gains additional relevance with Graph Search. If you triangulate Facebook’s moves with Nearby/Local Search, Graph Search, and mobile news feed ads, there’s an opportunity to connect buyers and sellers in locally relevant ways.

Though it’s early, we can bet the format will be organic to the user experience, stressed Levy. With the same “native” philosophy that’s behind all Facebook monetizaiton (i.e., sponsored stories), local advertising should merge with the user experience.

“People on Facebook ask friends for recommendations,” said Levy. “‘I’m in NYC, where should I eat?; I have a sick kid, who knows a pediatrician?’ This is the word of mouth advertising that’s happened for years. We’ll put those queries in a structured format.”

Read the rest.