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Today’s chatter is all about how Google is buying local business review player Yelp for some $500 million.
The only surprise for many of us Google Watchers is that this hasn’t happened already.
But hey, the recession snuffed out M&A in 2008 and Google has proven itself to be back at the bargaining table in the latter half of 2009, buying six companies since August, including mobile display ad provider AdMob.
Here is Yelp in a summary:
Greg Sterling at Search Engine Land noted:
“This is a huge amount of content that Google can’t generate itself and which it is already leaning on pretty heavily on its Place Pages as part of its increasing focus on local…. The Yelp brand is stronger than Google in the local market in many respects. And this would be the closest Google has gotten to buying a “sales force” with a meaningful “on the ground” presence in the form of local editorial people in market and telephone salespeople.“
Adam Bunn from search marketing firm Greenlight noted:
“These kind of deals give search engines direct access to structured data allowing them to reliably and accurately incorporate that data into their search results without the need to go through the usual crawling and indexing process, and increasingly offer functionality directly to users rather than simply sending them to another site.“
So, Google would knock out a competitor and get a boatload of traffic and data for its Place Pages, which list reviews, and as of this week, ratings from UrbanSpoon, TripAdvisor and Citysearch.
Google has also tabbed more than 100,000 businesses that have joined its Local Business Center for its “Favorite Places on Google” initiative, which lets business owners 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, Android-powered phones, surfacing the business’ Place Page right from their handhelds. It’s real-world shopping meets Web localization at its finest.
Google could use the Yelp data for Place Pages and benefit from the new Yelp for Android app, which lets users search for nearby businesses, read reviews and manipulate a Google map to redefine searches.
Ideally, Google would enable Yelp for Android users to see retail sale and coupon alerts zipped right to their Motorola Droid, Droid Eris (or Nexus One?) Android devices, pairing offers and suggestions with contextually relevant ads.
That’s an extremely powerful value proposition for users and a great chance for Google to boost its mobile ad opportunities.
Imagine the number of businesses Google can target with Place Pages vis-a-vis the Yelp data. Then imagine the ad revenues that can be derived from this and voilà , you have a recipe for success.
Simply, Yelp is another ad-driven site to help Google extend its desktop and mobile search and advertising leads over Microsoft, Yahoo and other challengers.
Indeed, Bunn attributed the play to Microsoft’s Bing’s recent moves to improve local search:
“Bing for example offers some compelling functionality integrated directly into its results, like restaurant booking courtesy of TopTable. And once up and running the costs for the search engine are marginal compared to the cost of crawling. A potential acquisition of Yelp by Google could be seen as a reaction to Microsoft’s strategy.“