Does the advertisement placing in local newspaper classified really effective in generating business leads? I think utility of the classifieds is limited only to small informative advt. like placements, marriage etc. What do you think?

Very few people will visit your website , if you are selling something in a shop , people living near to the shop can visit the shop.

I'd say for the most part print is dead. I don't know of anyone going to print advertising for much of anything these days. Now if your a small shop somewhere there might be something to print ads. Even then if you're smart about your website design and focus on "local" internet marketing you'll probably have some success. I don't think people focus enough on localizing their internet marketing... For a small business your site is just blowing in the wind. Just my 2 cents.

it all depends on the service you are providing.

It depends what your target market is. If you're aiming to market to an older demographic (towards retirement) then newspaper is probably a good bet as usually a lot of older folks don't use the internet. However if you're not targeting that audience, or trying to gain local traffic (which is the other target market) then I'd say don't waste your time. I'd agree that print is near dead, it's hard to generate traffic from an old venue that isn't getting used. I'd lean your focus to the internet and PPC ads instead. If you're trying to get local traffic then include your zip code in the PPC or your town, etc. Good luck!