This morning Google officially announced their Google Places application for iPhone and after playing with it for a bit, it appears as though the company just stole Yelp’s business, something that’s much cheaper than acquiring them.

While not yet a Foursquare killer, Google Places appears to aggregate just about all the information you could possibly need when looking for location-relevant information. Best of all, you don’t need to load up Yelp to find nearby restaurants as all of the company’s reviews have been imported into Google Places. While Google is also taking content from sprice.com, lowcostholidays.com, kudzu.com, citysearch.com, and numerous others, there’s no doubt that Yelp is the primary company who will find this new product to be crossing the boundary from search to straight up theft.

Granted, the reviews from external sites are not completely accessible from within the application and actually links back to the source, serving as a potential source of traffic. However Google has definitely entered a grey area, by aggregating other content in an effort to encourage users to submit their own ratings directly to Google’s system. While Google could argue that they are providing new potential sources of traffic to Yelp, they’ve kindly “provided” this traffic by duplicating much of the functionality provided by Yelp’s core mobile application.

This sort of action by Google makes the actions, like those of TripAdvisor, who previously blocked Google from pulling in reviews, much more understandable. While Google wants to take advantage of the power of the people and social media, stealing other large startups’ businesses is probably not the best way to approach things. My guess is that we’ll begin to see more tension between Google and various social content aggregators increase as Google attempts to push into new business areas.

For now we’ll have to wait and see if Yelp decides to follow TripAdvisor’s footsteps in blocking Google from accessing specific content for aggregate purposes. Do you think Google has crossed the line with this new functionality?