CEO Christopher Loughlin, speaking during Travelzoo’s fourth quarter 2010 earnings call, explained that Local Deals, which launched in August, wasn’t initially in the 2010 budget.

“We had to pull back somewhere,” Loughlin said, referring to Fly.com and SuperSearch.

Fly.com, however, remains part of Travelzoo’s growth strategy, Loughlin said, explaining that the company still sees great synergies taking place between Fly.com and Travelzoo’s Top 20 emails.

But, clearly, Local Deals is the shining star, these days.

Travelzoo increased its employee numbers from 232 in the third quarter of 2010 to 255 in the fourth quarter, with the majority of the new-hires for the Local Deals business, which now is operational in about 30 U.S., cities, London and its outskirts, and Barcelona.

As Local Deals scaled, Travelzoo increased its cash balance on hand from $34.7 million at the end of the third quarter of 2010 to $41.2 million in the fourth quarter, officials said.

Loughlin said Local Deals, which enables Travelzoo to get a revenue share from spas and restaurants as they offer vouchers to consumers, exceeded expectations in the fourth quarter and is a pillar of the company’s expansion strategy.

Travelzoo’s growth strategy includes international expansion, increased entertainment content, Local Deals and Fly.com metasearch.

By offering Los Angeles email subscribers about two Local Deals per week, Travelzoo saw incremental revenue of $2.34 per Los Angeles subscriber in the fourth quarter, the company said.

In the 30 U.S. cities where Local Deals is operational, Travelzoo served about two deals per week and recorded incremental revenue of about $1.90 per subscriber.

Travelzoo believes it can increase per-subscriber revenue from Local Deals, and with 13.1 million subscribers in the U.S. — or 22 million globally — there is a lot of upside potential.

Michael Stitt, general manager of Travelzoo Local Deals in the U.S., says Travelzoo is differentiating itself from group-buying sites like Groupon, Living Social and AOL’s Wow.com by leveraging Travelzoo’s existing hotel relationships and offering higher-end deals with “value,” often for the hotel spa or hotel restaurant.

While Groupon may offer teeth-whitening services or $10 worth of desserts for $5 at Maggie Moo’s Ice Cream and Treatery in Ridgewood, N.J., Travelzoo’s Local Deals tend to be at higher price points.

For example, a recent Travelzoo Local Deal at Casa Del Mar Hotel in Santa Monica, Calif., touted a 5-course dinner for two people at $89 [supposedly a $256 value.]

Travelzoo also recently sold 4,800 vouchers for the W Hotel Lounge in New York City, offering four cocktails with appetizers for $35 [regularly $108].

Local Deals from Travelzoo often sell at higher price points than Groupon’s, Stitt says, adding that another differentiator is that 81% of the Travelzoo audience is more than 35 years old. Groupon says 68% of its audience is 18-34.

Another differentiator is that Travelzoo can package Local Deals with placements in the Travelzoo Top 20 email, the company’s core product.

For example, the South Coast Winery Resort & Spa in Temecula, Calif., recently ran Top 20 and Local Deal offers simultaneously, selling more than 2,000 spa vouchers at $199 each and doubling expected results for the Top 20 offer, Travelzoo says.

Future plans, including new city and country rollouts for Local Deals?

Stitt wouldn’t provide specifics, but said plans are “very aggressive compared to where we are today.”

For the fourth quarter, Travelzoo’s net income fell 29% to nearly $3.8 million on revenue of almost $28.5 million, a 19.7% increase.

The restaurant, 24Grille in the Westin Book Cadillac Detroit hotel, sued TripAdvisor in April 2009 in a Michigan state court for $25,000, alleging that TripAdvisor’s actions constituted libel and negligence “for failure to investigate the allegations contained” in a “false” user review.

The anonymous comment alleged that the eatery invited prostitutes into the establishment.

The suit said the individual recommended “staying clear of the 24grille unless you and your family actually enjoy sharing your evening with the local prostitutes.”

The lawsuit claimed that the anonymous review, which was posted on or about Jan. 20, 2009, was “false.”

Thaddeus Stawick II, the attorney who represented 24Grille, said Oct. 5 that the restaurant “dropped the suit after a few weeks because we knew it was going nowhere.”

He says TripAdvisor recruited a local attorney to answer the suit, but it wasn’t necessarily TripAdvisor’s resources which doomed the lawsuit.

So why did 24Grille pull the suit so quickly?

Stawick says a federal law, the Communications Decency Act of 1996, provides “complete immunity” to TripAdvisor and other review sites for user comments posted on their websites in the U.S.

Section 230 of the law “provides immunity from liability for providers and users [my italics] of an ‘interactive computer service’ who publish information provided by others …” as long as the defendant is the publisher and didn’t provide the content itself.

A ruling in Zeran v. America Online may have some relevance if AOL and TripAdvisor both are considered providers of interactive computer services. In that case, the court held:

the amount of information communicated via interactive computer services is…staggering. The specter of tort liability in an area of such prolific speech would have an obviously chilling effect. It would be impossible for service providers to screen each of their millions of postings for possible problems. Faced with potential liability for each message republished by their services, interactive computer service providers might choose to severely restrict the number and type of messages posted. Congress considered the weight of the speech interests implicated and chose to immunize service providers to avoid any such restrictive effect.

These interpretations of the Communications Decency Act do not mean that a legal action being organized by U.K. firm Kwikchex has no hope of succeeding in the U.S. as courts may interpret the law differently and would take into account other — perhaps conflicting — laws.

But, the CDA may give pause to the potential plaintiffs in the U.S. and may explain why — given all the outrage among some hoteliers — there has been a dearth of lawsuits against TripAdvisor.

Stawick says he believes the 24Grille suit may have been the sole suit against TripAdvisor on the review issue, although that was difficult to confirm.

There has been some talk by Kwikchex that it would not only target TripAdvisor, but also would go after the review writers themselves.

But the Communications Decency Act appears to provide some protections for users who write allegedly defamatory reviews, as well.

Chris Emmins, the co-founder of Kwikchex, says Section 230 of the CDA “does provide protection that was never really intended for online review sites.”

“The intention was quite rightly to protect the likes of ISPs, who would have found it impossible to prevent offensive material from being published via their systems,” Emmins says. “They were in effect given the status of ‘distributors’ rather than ‘publishers.’”

Emmins notes that the law was written well before the advent of social media and review sites have been able to use it “to escape responsibility — which in turn has given rise to the widespread abuse of all such sites.”

However, Kwikchex’s legal experts indicate that TripAdvisor has added “further dimensions” that “could strip away the immunity granted under Section 230,” Emmins says.

He says one such added element is TripAdvisor emails about the “worst” hotels.

“Those elements are not user generated content, but rather have been issued by TripAdvisor themselves,” Emmins says.

Another possible area that Kwikchex would pursue is TripAdvisor statements that “this review was written by a trusted member of the TripAdvisor community.” Emmins says:

Advice we have received suggests that this is an endorsement/confirmation of truthfulness by TripAdvisor of the comments made. This is a much greyer area, but worth challenging, since it is again something added by TripAdvisor that directly distorts the viewpoint of visitors to their website. It may also fall under consumer protection laws rather than defamation, since it is suggesting that the comments are from a ‘trusted person’, when in fact TripAdvisor does not know who the person is or indeed if they were ever a customer of the business they have commented on.

Stawick says the restaurant decided to sue TripAdvisor after about two months’ worth of registered letters and faxes received absolutely no response from TripAdvisor.

The review in question remained on TripAdvisor.com for months, Stawick says, although a search today of TripAdvisor reviews about 24Grille and the Westin Book Cadillac Detroit produced no such review, so apparently it was eventually removed.

Although the restaurant dropped its suit, Stawick claims the legal action served to draw attention to problems with TripAdvisor’s review system.

The attorney says he received calls “from all over the world” about the suit.

Credit: Courthouse News Service published the complaint, which is a public document.

No, Google Maps isn’t necessarily a hotels.com, TripAdvisor or a Zagat killer, but it sure is becoming a nifty place to begin trip-planning, with its plethora of user reviews, photos, videos and basic information about hotels, restaraurants and activities — and now alternative venues in the area.

So, if you search for the New York Marriott Marquis Times Square on Google Maps, you’ll find that Google has aggregated information about almost everything you might want to know about the property. If you scroll down the page past the basic property information, the photos, videos, map and user reviews, you’ll find “Nearby places you might like” and it looks like the following:

Nearby Places isn’t flashy and it is flawed, but it does provides a handy way — with links, star rating and user reviews — to search for other area hotels.

You’ll notice that although the New York Marriott Marquis is a four-star property in the very touristy Times Square, Nearby Places provides links to the 2 1/2-star Pennsylvania Hotel, as well as to Hotel Gansevoort, which isn’t exactly nearby or similar with its location  almost two miles away in the meat-packing district.

Google says of Nearby Places: “You’ll notice that we do not limit these suggestions to places sharing any specific characteristic; instead, we use a broad set of signals to come up with what are hopefully the most interesting suggestions. We’re still working on refining these signals, so bear with us if your serendipitous discovery of a new place is even more unexpected than you’d anticipated.”

Thus, some further refining may be in order if Google’s goal is to eventually furnish similar, nearby places.

You can use the new Google Maps feature to search for nearby restaurants and activities, as well.

For example, if you are looking for an activity to replace — or to supplement — your visit to NorthStar Trekking in Juneau, Alaska, Nearby Places points you to the following venues to consider.

Thus, Google Maps is continuing its evolution into an online destination guide.

The only thing missing is an integrated booking engine.