Google is reportedly brokering a deal to buy local search and review property Yelp for $500 million. Yelp provides reviews for local businesses, including restaurants, spas and pretty much any type of concern one might need to call on to aid them through the daily grind. The Website had 26 million visitors in the last 30 days through November. If Google can get Yelp, it will have a treasure trove of local information with which it can pair contextual mobile ads. If Google does bid for Yelp, it would be Google's seventh of 2009, preceded by On2 Technologies, ReCaptcha, AdMob, Gizmo5, Teracent and AppJet, all since August.
With the end of 2009 drawing nigh, Google is reportedly brokering
a deal to buy local search and review property Yelp for
$500 million, a royal sum for a company that banked $31 million in funding and
boasts a $30 million run rate.
Google is no stranger to such premiums and set a serious precedent by
offering $750 million for AdMob, which IDC said
earned $40 million in mobile display ad sales in 2009.
A Google spokesperson declined to confirm or deny that a deal, first
reported by TechCrunch
, is forthcoming, coyly telling eWEEK, "While
we're always talking to various companies about various things, we don't
comment on rumor or speculation."
Yelp hosts more than 8 million reviews for local businesses, including
restaurants, spas and pretty much any type of concern one might need to call on
to aid them through the daily grind. The Website had 26 million visitors in the
last 30 days through November.
Google wants this information to boost the data and services it already
provides with its Local Business Center
. Participating businesses list their phone
numbers, hours of operation and other factoids with Google, which renders this
info on Google Maps Place Pages. Yelp has been immensely successful providing
similar info, but lacks Google's massive Web presence.
Google also recently unveiled its "Favorite Places on Google"
initiative, which lets more than 100,000 business owners in its LBC place a
window sticker with a bar code on their storefronts. Users walking by on the
street can scan the QR code from their Apple iPhone or Android-powered phones,
surfacing the business's Place Page right on their handhelds.
If Google can get Yelp, it will be able to take this treasure trove of local
information and pair it with contextual ads. A user walking around a city with
his Apple iPhone or Android device could feel his phone vibrate. He would check
the phone and see shopping alerts from Google/Yelp, which might also offer coupons
Imagine two-for-one offers from clothing stores, a free cup of coffee offer
as one passes the local Starbucks, or a 10 percent-off coupon from a nearby
Indian restaurant. With Yelp data powering Google Maps Place Pages on Android
phones, the ad possibilities are endless.
Adam Bunn, of U.K.
search marketer Greenlight
said such a deal would give Google fresh local search results without the need
to go through the usual crawling and indexing process and sending searchers to
another site. Interestingly, Bunn said Google seems to be taking a page out of
a competitor's playbook, and it's not local search power Yahoo.
"This is one of the strategies that Microsoft had chosen for Bing, and
the main reason why it took so long for Bing to launch properly in the U.K.:
identifying potential content or functionality partners relevant to that market,
negotiating with them and then integrating their data takes time," Bunn
Yelp is more than just about the local data. Kelsey Group analyst Michael
that in Yelp Google would also be acquiring a fat sales
force of advertisers:
"[Yelp] COO Geoff Donaker told us at
last week's Interactive Local Media show that 200 of the company's 300
employees are advertiser facing in some way, including account rep or direct
sales positions. Google has always maintained that it's not in its strategic
interests to buy or build a direct sales force to access the elusive SMB
marketplace at the heart of its 'long tail' paid search efforts. That's kind of
true but this deal changes it a bit."
If Google does bid for Yelp, it would be Google's seventh of 2009, preceded
by On2 Technologies
, all since August. Moreover, Google is also rumored to
real-estate search provider Trulia.
These deals underscore how Google is well-positioned to maintain and extend
its lengthy search, ad and Web services lead into 2010.