According to the latest Pew Internet and American Life survey, search engines are still used considerably more than social sites for users trying to find information about local businesses.
The internet is the source that people most rely on for material about the local business scene and search engines are particularly valued. Newspapers and word of mouth also rank high as sources.
In looking at the data though, search engines surpass newspapers by a bit, and surpass social media sites significantly:
You can view the full report here: Pew Internet
For local businesses, you'll know your local audience better than a nationwide survey of 1,000 people. Newspaper advertisements may still be appropriate for your business, but for many businesses you'll get more bang for your buck if you invest in a simple website and some effective search engine optimization. You don't need to show up #1 on Google, but in the top 10 (the first page of results) is ideal, the first 30 results necessary.
Understand this does not mean Facebook, Twitter, or YouTube campaigns aren't worthwhile. The survey was posed as a question, "Where do you go to for information about your local businesses?" Social networking sites aren't suited ideally for pushing information about your business, they're much better at gaining attention and increasing customer loyalty.