Sunday, December 20, 2009

Google reportedly in talks to buy Yelp

Google Inc. is reportedly in talks to acquire Yelp, the popular San Francisco site that allows users to review restaurants, bars, shops and more, potentially providing the search giant an opportunity to reach deeper into the local business market.

Technology blog TechCrunch and the New York Times characterized the discussions as "advanced" and "serious," respectively, citing anonymous sources with knowledge of the deal. The publications pegged the price tag at $500 million or more.

Both Google and Yelp declined to comment.

The privately held company was founded five years ago by a pair of PayPal executives and quickly grew into a popular forum for users across the nation to laud and lambaste their restaurant service, bar selection and even the scenery on hikes.

This Yellow Pages of the digital age saw 8.9 million unique visitors in December, up 68 percent from a year ago, according to comScore - and many more users than that, based on its own estimates. Citysearch, the rival Los Angeles local review site formed in 1996, boasts more visitors, 13.7 million, but that's down 3 percent.

Google has mastered the art of matching keyword searches to ads for online transactions. But translating that into exchanges in the offline world, especially among the highly fragmented small-business market, has proven trickier.

Because Yelp's users clearly articulate the type of business they're looking for - by entering search terms for, say, "Mission taqueria" or "Noe Valley hair salon" - it allows advertisers to target messages to those customers most likely to walk down the street and spend money at their business.

If the deal is in fact under way, that's the main draw, analysts say.

"In a world looking for high-value eyeballs, it's hard to find any higher value ones than these," said Rob Enderle, principal analyst with the Enderle Group.

He didn't have any knowledge of the talks and stressed that rumors are sometimes spread by companies hoping to be acquired, or their financial backers, to build interest or ignite bidding wars.

The deal would also provide a deeper social dimension to Google's online guidance, a direction in which the company and the Web world at large are already increasingly moving.

For the young San Francisco company, a takeover by one of the hottest technology companies may mean many things, some good and some bad. At the price being discussed, it's sure to mint a few millionaires. And the scale and resources of Google could quickly transform the site into a global operation.

But something might be lost as well.

"Among some Yelpers, the elite squad, I think there would be some ambivalence about becoming part of a large company like Google," said Greg Sterling, founding principal of Sterling Market Intelligence. "There might be reason to believe that Yelp would lose some of its luster, some of its edge, some of the factors that make it a community."



1 comment:

  1. Google buy Citysearch. You'll have a more solid local business market which you so much want to tap into!!

    ReplyDelete

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