Best-selling author Steven Johnson keynoted at ILM:10 in Santa Clara today. In his talk, based on “Where Good Ideas Come From,” a new book, he focused on how local media and commerce is affected by ideal environments for innovation that don’t inadvertently add an “innovation tax.” The best ideas, he noted, come from “putting yourself in situations where these kinds of unlikely developments will happen.”

The idea for Outside.in, the local company that Johnson founded and chairs, for instance, originated from the intersection of three things: his research into Victorian England via the Web, the emergence of local bloggers in his neighborhood in Brooklyn and the emergence of the Google Maps API. Basically, you never know where the serendipity comes from.

Fifteen years ago it wasn’t clear that the Web would actually support local, Johnson noted. Futurists speculated we were headed to a “post geographic” age that would make physical location obsolete. In fact, the opposite has happened.

“We failed to anticipate a couple of core innovations,” said Johnson. “GPS and the concept of the geographic Web. We didn’t realize that the Web would enhance geography and that it would solve a problem: figuring out what’s going on in our community.”

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CityGrid Media (formerly Citysearch) will extend its paid base of 800,000 advertisers across thousands of neighborhood news pages, courtesy of a display advertising deal with Outside.in. The two companies have been quietly conducting pilot tests of custom ads in “a couple” of markets, leading to the wider rollout.

Outside.in CEO Mark Josephson tells us that the tests have shown “strong relevancy, and high clickthrough rates and CPM rates.” Josephson says that CityGrid’s “high-quality inventory” fits perfectly with Outside.in’s efforts to populate its pages. “We’re not building a local sales force,” he emphasizes.

The CityGrid deal also complements a separate Outside.in initiative to bundle similarly themed local Web sites (i.e., foodie sites) to provide scale for national advertisers. That effort is just beginning to roll.

Josephson adds that the CityGrid deal was negotiated by Rob Delacruz, Outside.in’s new chief revenue officer. Delacruz was previously Microsoft’s head of business development for local, mobile and search.

Outside.in CEO Mark Josephson is appearing on “The New Local News” session at ILM:10 along with Warren Webster of Patch.com, Satbir Khanuja of DataSphere and Darian Shirazi of Fwix.

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Outside.in, a major aggregator of local blogs, has begun the integration with CNN that was announced last December at our Interactive Local Media conference in L.A. First up is integration with CNN’s home page, weather page and profile page. On the home page, users can click on Local Weather & News in the right sidebar, enter their ZIP code and get local news. On the weather page, headlines appear below the map when ZIP codes are entered. On the profile page, “local news” appears on the right.

Outside.in emphasizes that this is just the beginning of a broad integration, and will position the company for integration with any site. “To support the one billion+ monthly page views on CNN.com, our team tackled the challenge of massively scaling our platform and providing CNN with a robust, yet flexible API to meet all their needs. The integration allows us to drive exposure and traffic throughout the news ecosystem to publishers of all sizes,” notes an internal communication.

In other local aggregator news, MSNBC’s EveryBlock has teamed with New Haven-based SeeClickFix to enable consumers in each of EveryBlock’s 16 cities to report and view civic issues reported in their neighborhoods (i.e., “Stop sign needed at corner of El Camino Real”).

The ad-supported site, which emphasizes mobile reporting, has previously teamed with a number of top newspapers, including The New York Times, The Journal Register, Boston.com, NorthJersey.com, Philly.com, Dallas Morning News and The New Haven Independent. It follows in the footsteps of E-The-People, a site that pioneered civic reporting in its work with more than 100 newspapers 10 years ago.

“The work that EveryBlock has done to free up local data has been instrumental in creating the kind of environment in which tools like SeeClickFix can thrive and create real positive change through greater civic participation,” said SeeClickFix CEO Ben Berkowitz in a release. “SeeClickFix maintains an open data policy so that like-minded sites like EveryBlock can put our users content in front of their users, and we can work to create a larger environment of open local communication for the greater good of our neighborhoods.”

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