By Charlene Li

Yahoo! Answers launched today at answers.yahoo.com. The service allows users to 1) ask questions; 2) answer them; and 3) discover and browse through all of the answered questions that others have posed.

Here are a few great examples of the helpful (and the esoteric) Q&A taking place.

-         What’s the best microphone or headset for recording a podcast?

-         Where is a good place to live in or near San Jose, CA?

-         Why doesn’t Hello Kitty have a mouth?

The service is free, and even more importantly, is really easy to use. Questions are grouped into categories, there’s a search to find more answers, and best of all, there’s a reputation/feedback system built in.

Compare this to Google Answers or specialty sites like Guru.com – both of these sites are paid services, which makes it a lot more cumbersome to use and also raises the stakes for both the asker and the answerer. By keeping it free, Yahoo! keeps it light but also pretty darn useful. Also, the universe expands tremendously with Yahoo’s service – Google says it has something like 500 pre-vetted answerers while Guru.com serves as an intro to freelancers.

How will Yahoo! benefit? Well, I don’t think they were leaving much money on the table by foregoing the ability to charge. In fact, there’s probably quite a bit more opportunity in the form of advertising, especially since advertisers could potentially buy ad inventory in specific categories or target ads by specific keywords.

Two other ways Yahoo! benefits: 1) It encourages users to become active, participating Yahoo! community members; and 2) it creates new content that can be indexed and searched by Yahoo! (as well as other search engines).

One key area to watch: local advice. This has the potential of causing a huge dent in start-ups like Insider’s Guide or Judy’s Book, primarily because it’s so easy to use and doesn’t require forming a formal social network. I fully expect Yahoo! to integrate Answers into Yahoo! Local in the near future.