Cry havoc, and let loose the dogs of war – Yelp launches into UK local reviews battleground

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Well, the war of “local” sites which started last year is really on now. US local reviews giant Yelp, the model for many such sites globally, is to launch in the UK today, under Yelp.co.uk, and local competitors will be taking a keen interest in its launch.

There is already a swathe of players fighting it out in the UK, most in the London hothouse. Qype is well-funded and leading the pack. They are followed by Trusted Places, mobile-focused Rummble, Tipped, Brownbook and recent upstart (which probably now has little chance) YourLocalLondon.

Yelp’s US community is both famous and infamous of its reviews of restaurants, shops, events, you name it. And the startup plans to bring its community events as well – something the UK sites haven’t gone in for very often, outside of occasional parties thrown by Qype and Trusted Places.

Yelp says it has 100,000 UK-based Yelpers, which is incentive enough for it to start a UK site, and Yelp’s co-founder and chief executive Jeremy Stoppelman tells The Guardian “The best time to grow is when others are struggling”. But in truth the expansion is almost certainly down to wanting to garner more revenue via expansion into new markets.

As usual, the question is, will the plucky local players be able to hold their own? Here’s my prediction: Trusted Places will try to sell to Yelp, as hinted before Christmas. Qype will fight it out. The rest will either re-focus and get out of the way or die. The market simply will not sustain all the current players.

  • http://trailbeater.blogspot.com/ Ben Colclough

    With you on this one. Crazy amount of competition, and you would assume network effects would mean there’s ultimately only room for one winner.

  • http://www.johnjones.me.uk john.jones.name

    why cant they EVER do something standard like use hReview ?

    John

  • http://qype.co.uk Stephan Uhrenbacher

    Mike, just one small clarification. They say they have 100,000 out of their 12 M unique visitors from UK. This compares to 1.8 M unique visitors from UK for Qype.
    Nevertheless: Yelp will be an interesting competitor.

  • Alistair Hart

    It’s going to be an interesting year.

  • http://europeanstartups.com/aggregator Ivan Trajkovic

    Here’s one more unmentioned here, and they do a really good job (well, not in London yet…): http://tupalo.com/

  • http://www.ecademy.com Julian Bond

    What really amazes me about all this is that every time somebody creates a web 2 site that has a strong geographical element, they don’t make it worldwide by design. Why do we need yelp.co.uk? Why doesn’t yelp.com just work in the UK, Europe, Asia, South America, Africa already?

    And I can’t count the number of times somebody has done a really neat gooogle maps mashup or geolocation service that only works in mainland USA, or even only California. Grrr. Makes me mad!

    • http://www.brownbook.net dave ingram

      Hi Julian, Thanks for saying it. I totally agree. brownbook is a Global platform from day 1. I just don’t get this need to put a sales team on the ground in each territory, is that really any different to the old YP model?

  • Paul Joyce

    The whole reviews for venues scene is totally flawed currently imo. Fundamentally, giving a rating out of 5 to a restaurant doesn’t make any sense.

    Don’t get me wrong, I don’t have a problems with ratings as such, the system works adequately for films or books to a certain extent, but when you start talking about something as fluid as bars and restaurants the ratings system falls apart.

  • http://www.aroxo.com Matt

    This whole game is about world’s best SEO, followed by fall-off-a-log-easy registration with a bunch of tools to make your site sticky.

    Lazer like focus on these is all that matters. It’ll be interesting to see who wins this one.

  • http://www.qype.co.uk Andrew H.

    @Matt – It’s not all about SEO. Community and usability are SO important. Don’t get me wrong, SEO is super important in the local space, but it isn’t the be all and end all.

  • http://www.localdatacompany.com Ollie Toogood

    Good luck to everyone, room for plenty of them if they can all find a different approach (this is the trick) to capturing their own part of the user/market place!

  • http://socialmediainfluence.com/2009/01/08/cisco-launches-social-networking-for-big-media/ Cisco launches social networking for big media | socialmediainfluence.com

    […] worth of LJ musings, and no doubt other LJ users feel the same. Yelp launches a UK service TechCrunch UK reports that US local reviews service Yelp has launched in the UK, taking on competitors such as […]

  • Loopy

    I agree with Paul Joyce that the review scene (for venues) is flawed. I find it incredible that it attracts any VC attention, when venues such as restaurants/pubs/clubs themselves are so high risk and the majority have a short life span due to fickle customer taste. I do not understand why companies put themselves in the value chain of these venues (and do not earn revenue directly from them as well). I get a feeling that PUBS

    I can understand the creativity to offer a service which differs from the standard yellow page model and brings community and two way discussion between vendor and customer, but all I see at present is services that offer reviews (limited number of them – traction still needed) and I am supposed to base my choices on these reviews!!!!!!!!

    I fail to understand the review listing model (other than creating a large DB of listing which can be sucessfully spidered and thus garner adsense dollars) and the current financial situationattention t is certainly not a major revenue earning areanRather than just review

    I also do not understand a web based business that is aggregating

    If the online sites have a business model based on such venues (which have a determinate revenue stream, how are they going to create revenue from businesses that only create hundreds of pounds

  • Loopy

    Oops the first post went through before I finished.

    I agree with Paul Joyce that the review scene (for venues) is flawed. I find it incredible that it attracts any VC attention, when venues such as restaurants/pubs/clubs themselves are so high risk and the majority have a short life span due to fickle customer taste. I do not understand why companies put themselves in the value chain with these venues (and do not earn revenue directly from them as well).

    I can understand the creativity to offer a service which differs from the standard yellow page model and brings community and two way interaction between vendor and customer, but all I see at present is services that offer reviews (limited number of them – traction still needed) and I am supposed to base my choices on these reviews!!

    I fail to understand the review listing model (other than creating a large DB of listings which can be successfully spidered and thus garner adsense dollars from matching words). What is the hidden revenue steam if it is not advertising?

    I do see a lot of possibility with crowdsourcing a directory DB (hats off to brownbook) but what is going to happen to review sites/directories with multiple bad reviews of vendors? I see the vendors as the customers, not the reviewers and thus I am confused about how the business model is going to work.

    Can anybody propose a new value chain/business model for this sector which will explain the review site’s strategy (outside of advertising).

    PS. I am working in niche based directory services :0)

  • http://www.localdatacompany.com Scott Jones

    @Loopy.

    Valid points – obviously advertising is the blatant answer. Beer In The Evening and Fancy a Pint both carry advertising and, as I understand it, both run profitable businesses.

    However, I think the key with regards to revenue here may actually be the non retail side of things. If you’re a hairdresser who runs a small business out of your front room say, and by paying a nominal fee to Brownbook for instance to get a presence on the web well, that’s all it is..an affordable nominal fee. I think plenty of smaller companies, niche companies, sole traders and service led companies will be willing to do that as it’s affordable. You get X tens of thousands of people doing that and you’ve got your self a profitable business.

    Same goes for Yelp IMHO but, with a slightly different sector focus possibly…digital PR is more and more important to corporates and multiples as well as the independent retailers.

    However, the number of people searching for non-retail businesses is lower than those searching for Pubs/Restaurants etc. So, to create a following for your site you need to host what the masses are searching for online – e.g. Retail.

    Your point with regards to a limited number of reviews? You obviously havent researched what Yelp in particular has achieved in the United States!

    The UK sites are certainly gaining traction and an awareness outside of the start-up community. Look at We Love Local’s recent purchase or Trusted Places working with Glam Media or indeed any of these guys stats..they’re all growing and more users, more eyeballs, more reviews means more opportunity for monetisation.

    P.S. We supply the best local content available in the U.K. to the best companies working in “local” :0)

    • http://www.brownbook.net dave ingram

      Thanks Scott, for making the ‘long tail’ point so clearly. In terms of cost http://www.brownbook.net is an order of magnitude less for a business to participate. In fact its free to do almost everything, then you pay about the cost of a round of coffees to totally customize your listing (plus more) to stand out from your competitors. The reason thats important is that promoting your business online is never a one-place affair, its about dropping breadcrumbs all over the web that lead prospects/customers back to your business. Most of us on the web today expect to get things for free or almost free (OpenThis, FreeThat, etc), and as soon as you start going back to the old high-price models you are bucking the trend. Then you have to start building up sales forces to sell it, and your customers have to start making tough ROI decisions. In the long tail we recognise that business want to be in LOTS of places, and we make it affordable, quick, and easy for them to do it, often times to a higher level than those that would ask them for 10 times more cash (to support their bloated sales models).
      [steps gently down off soap-box :) ].

  • romeizburning
    • http://www.brownbook.net dave ingram

      DON’T BOTHER, this has nothing to do with this discussion. Its Henry Kissinger talking about current affairs. (But now I know you can’t resist checking it out, right? You did, didn’t you… didn’t you?)

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  • http://www.myneighbourhoods.co.uk/ Danny Bull

    As a smaller but growing competitor, this kind of news is exciting as it provides the necessary challenges to adapt and grow. It’s a crowded space but one that new comers can still make an impression (My Neighbourhoods traffic is up by 30% and rising as a result of our new local business listings).

    Effective SEO is down to skill and knowledge rather than the size of teams or budget so competing against the likes of Yelp is by no means impossible. As hinted at by Ollie Toogood, there is plenty of scope for focussing on and capturing one part of the market by doing that well – one company cannot do everything and do it well enough to push out the others.

    It would be interesting to know the revenue generated by the bigger sites. There are sites like thebestof.co.uk generating £4m a year while never getting mentioned by the likes of TechCrunch.

  • http://uk.techcrunch.com/2009/01/08/were-not-yelping-now-yelp-has-arrived-say-the-local-competitors/ We’re not yelping, now Yelp has arrived, say the local competitors

    […] arrival of local reviews giant Yelp on the UK scene will have a lasting impact on the local players who have painstakingly built local […]

  • http://uk.techcrunch.com Mike Butcher
  • http://tommoor.com/podcast/2009/01/11/02-ces-never-heard-of-it/ Webcode Podcast » 02 - CES? Never heard of it

    […] Yelp launches into UK local reviews from TechCrunch UK by Mike Butcher […]

  • http://uk.techcrunch.com/2009/01/12/look-out-yelp-qype-ceo-brings-in-new-guy-to-take-the-fight-to-the-enemy/ Look out Yelp - Qype CEO brings in new guy to take the fight to the enemy

    […] multiple markets and facing competition from a number of players. Not least of which is Yelp which launched in London last […]

  • dave

    How do Yelp get all the details for these businesses listed on their site. Do they enter them manually or is it from a database they have purchased?

    As it seems a lot of work adding all that content manually!

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  • Steve Richardson

    2 years on, would be good to see an update to this post, especially in this post panda world. Yelp seems established but not entrenched, the landscapes changed and a few familiar smaller directories have disappeared, but it is still an exciting marketplace to be in. Traditional annual subscriptions are giving way to lifetime or free web links, and reviews sites are now the norm. Can a single directory dominate the market? I suspect not, if anyone could do it, it would be Google Places and its stealthy monopoly of P1 SERPs…

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