Yelp built its ad business by attracting users that know what they want, just not who to buy it from — exactly when ads are most effective. That’s why I find today’s VentureBeat piece by Rocky Agrawal titled “Yelp advertising is a rip-off for small advertisers” to be ridiculous. His sources say Yelp charges a $600 CPM, or 1,000-times the standard online CPM rate.
Yes, these ads are expensive, especially for low-end restaurants. But for lawyers, dentists, jewelers and mechanics with a high lifetime average revenue per customer, turning someone searching for their services on Yelp into a loyal customer is no rip-off, it can drive huge ROI. → Read More
I’ve heard like a billion people complain about this recently so here goes: When you’re starving you don’t want to read through thousands of Yelp reviews on your phone or download a random PDF from a terrible restaurant website that’s so slow-loading it’s indecipherable. You just want to know where a restaurant is, what it has to eat, and whether or not it’s open.
‘Menu and Hours’, a Kickstarter project, is an app designed just to give you just the menu, hours, contact info and location of local eateries — the antidote to unnavigable mobile restaurant sites and TMI foodie services like Urbanspoon. Brilliant, right?
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Local recommendation site Yelp has finally filed an S-1 to IPO, wanting to raise $100 million.
The site generated $58.4 million revenue in the first nine months of 2011, 80% growth over the same period in 2010. They operated at a net loss however, of $7.6 million.
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Yelp and Groupon are both being sued by a company called Mobile Commerce Framework, an obscure patent troll that earlier filed a similar patent infringement suit against Foursquare.
On April 6, 2010, Mobile Commerce Framework (MCF) was issued US Patent No. 7,693,752 by the USPTO, for reasons unknown to mankind. In summary, this patent describes:
(After the jump) → Read More
Last year, several lawsuits emerged that accused Yelp of extorting businesses to advertise in exchange for positive reviews. Yelp has just announced that a judge granted Yelp’s request to dismiss these suits.
For background, the lawsuits claimed that after declining a request to purchase advertising on Yelp, a number of positive reviews from businesses’ listings on the reviews site mysteriously disappeared, downgrading the company’s rating on the site. → Read More
This afternoon the Senate Judiciary Committee held a series of hearings investigating whether Google may be violating Antitrust law. During the first panel of the day, Google Chairman (and former longtime CEO) Eric Schmidt took the hot seat to answer questions focusing largely on the fairness of Google search results, and whether they unfairly favor Google products (you can find our full post on that hearing right here).
During the second hearing, which just ended, a handful of Google critics and competitors made their cases as to how Google has been anticompetitive. One of these critics was Yelp CEO Jeremy Stoppelman, who released a statement last night (embedded below) outlining why he believes Google has abused its market dominance in search. And he provided additional details about Yelp’s relationship with Google during a series of questions from the participating Senators. → Read More
Chris Dixon begins this episode of Founder Stories with DoubleClick and FindTheBest Co-founder Kevin O’Conner by telling O’Connor that “DoubleClick is probably the closest thing New York has to a PayPal.” Meaning the two companies share an aptitude for hiring employees that go on to start innovative businesses. Just as Paypal spawned Yelp, YouTube, and LinkedIn, DoubleClick spawned dozens of startups in New York City like Right Media.
With this in mind, Dixon asks O’Connor if he intentionally created an environment that encouraged innovation while at DoubleClick, before going on to ask O’Connor what he considers to be the defining characteristics of successful entrepreneurs. → Read More
“I have a competition in me. I want no one else to succeed.”
I’m reminded of Daniel Plainview’s admission in There Will Be Blood when thinking about Google.
While the company is still largely beloved by the public, sentiment seems to have turned against them amongst their peers, and even amongst many of the startups around Silicon Valley. While these tensions have been building for months — and even years, in some cases — we’re seeing this on display more clearly than ever now thanks to the patent issue(s). → Read More
When it comes to local commerce, the ultimate prize everyone is going after right now is how to close the redemption loop. The redemption loop starts when a consumer sees an ad or an offer for a local merchant, and is completed when the consumer makes a purchase and that purchase can be tracked back to the offer. If you know who is actually redeeming offers and how much they are spending, you can be much smarter about tweaking and targeting those offers.
Groupon, LivingSocial, and other daily deal sites have created enormous value by pushing the redemption loop the furthest. When someone buys a daily deal, for instance, that translates into cash for the merchant. But for the vast majority of their deals Groupon and LivingSocial do not track whether or not they are ever redeemed, much less the amount each consumer actually spends at the store or restaurant once they show up.
In order to complete the circle and track offers all the way through redemptions, it is necessary to either tap into the payment system or create an alternative way to track redemptions. Different companies are tackling this problem in different ways, but they almost all rely on a shift from emailed coupons to offers delivered through mobile apps. → Read More
If you talk to Yelp CEO Jeremy Stoppelman, he always likes to point out how many reviews there are on Yelp. It’s a point of pride and competitive differentiation. Even Google Places, which borrows liberally from Yelp reviews, seems to think so.
Today, Yelp crossed 20 million reviews, up from 10 million in March, 2010 (and 17 million last April). The reviews bring in the visitors, and visitor growth tracks pretty closely with the growth in reviews. Yelp hit 53 million visitors in June, according to its own stats. → Read More
Foursquare this morning announced distribution partnerships with daily deal providers LivingSocial, Gilt City, zozi, BuyWithMe and AT&T. Missing from the list are Groupon, Yelp and Google Offers.
With these deals, Foursquare is attempting to solve two problems: liquidity in deals and its own lack of a revenue model. → Read More
It has been over three months since we first broke the news on the existence of Disco, the group messaging app made by the Slide team within Google. Google still refuses to talk about it. But work continues nonetheless. Today brings version 3 of the app — and the app is starting to get really good.
Just a little over a month after Disco was updated to version 2.0 with Push Notifications, today’s update brings a range of key new features. The biggest one is photo sharing, a feature which is now a must-have for all group messaging apps. Also new is 1-to-1 chat capabilities. But the most important additions may be the things Slide/Google is trying to do to help differentiate Disco from the rest of the pack. Namely, they’ve baked in Twitter and Yelp integration. → Read More
Bubble or not, 2011 may go down as the year of the tech IPO. Not since the last bubble have we seen so many technology companies clamoring to go public. And halfway through the year, we still have many more companies who will be listing on either the NASDAQ or the NYSE in the next six months. Here’s a roundup of the tech companies that have gone public, where they are trading now, and who we can expect to see ringing the bell next.
Professional social network LinkedIn probably had the biggest IPO in terms of hype this year because it was one of the first big social media companies to go public. After pricing its IPO at $45 per share on the New York Stock Exchange, LinkedIn began trading at $83.00 per share on May 19, giving the company a $7.8 billion market cap. In the first day of trading, shares popped up to as high as $122.70, soaring past a $10 billion valuation. → Read More
The next phase of growth for local deals will be mobile. Groupon knows this, and so does Yelp, which today is rolling out Yelp Deals to its iPhone and Android apps. An update to its mobile apps that is getting pushed out today will add a new deals icon to the app. When you click on it you can see a list of nearby Yelp Deals for discounts at restaurants, spas, and other businesses. (These are in addition to Yelp Special Offers and Check-In Offers, which already appear on mobile).
With Yelp Deals on mobile, you can search for nearby deals when you are walking around, and they are instantly redeemable. You get a redemption code that you can show the merchant right from your mobile phone. This is similar to what Groupon is trying to do with its Groupon Now mobile app, which is only available in a handful of cities (fewer than Yelp Mobile has out of the gate). → Read More
Google Places is at it again, brazenly borrowing reviews from Yelp. But this time it’s in their iPhone app and they are not even bothering to link back to Yelp or attribute where they are getting the reviews. Yelp and Google have a love-hate relationship. Yelp loves when its listings and reviews show up in natural search results, but they hate it when Google scrapes their reviews to populate its own local listings in Google Places.
This tension between the two has been playing out for a long time with various ups and downs. It’s become a running joke. But Google appears to be pushing the boundaries of what is acceptable once again with its mobile app. → Read More
Yelp’s international sites have been growing like crazy, with non-U.S. traffic doubling in the past year. Today, it is adding a fifth non-English international site, Spain, to its roster. (The other international Yelp sites are in France, Germany, Austria, and the Netherlands).
Yelp is now at 50 million unique visitors per month, mostly in the U.S., according to its internal stats. ComScore shows 87 percent growth in non-U.S. unique visitors over the past year (Yelp’s internal stats show more than 100 percent growth). → Read More
San Francisco City Supervisors are meeting today to vote on whether companies like Twitter moving into the city’s blighted Tenderloin neighborhood will get a generous enough tax break to keep them from leaving the city. It’s an important vote for all of Twitter’s employees, as it will probably dictate whether they start commuting to Brisbane or not. And it’s an important vote for Zynga, Yelp and other large startups who are having similar conversations with the city.
But the vote is also an important first step for any entrepreneur thinking of opening a high-growth company in San Francisco– ever. → Read More
Over the last couple years, there’s been a huge surge in the suite of online services referred to collectively as ‘local’. There’s Facebook Places, which prompts users to check-in and claim deals. There’s Google Places, which recently launched its own check-in feature and also aggregates reviews from a variety of online service. And of course there’s Foursquare, which popularized the check-in model in the first place and recently launched a new Explore feature.
But despite all of this new competition, Yelp — which has been focused on local since 2004 — is still growing at a clip pace. Today the company has surpassed 50 million monthly unique users (as reported by their internal Google Analytics), up from 46 million the month before. And they have a total of 17 million reviews for venues around the world. CEO Jeremy Stoppelman says that the service is seeing a faster rate of growth for both contributions (reviews) and users than it has historically— in Q1, users wrote 2 million reviews, while most quarters average 1 million. In other words, even if some of these other services are gaining traction, it isn’t hurting Yelp. → Read More
In Silicon Valley it’s not just who you invest in that matters– it’s also when you invest in them. The earlier the investment, the riskier the bet. But the more jawdropping the returns if the company hits it big. It’s so lopsided, that typically just 5% of those unsure early bets create some 95% of the entire venture industry’s returns. Miss one of them, and it haunts you for years. Snag it, and you can brag for even longer. This simple reality is precisely what makes the venture business hard, and the justification for why partners make such huge fees.
So what’s up with the surge of the strongest early stage firms jumping so heavily into late stage mega-deal fray? Have the Valley’s superstars lost sight of these rules or are the rules changing?
Earlier this year, we wrote a lot about the shift in power at the early stages with the rise of super angels, but you could argue there are far greater ripple effects to this new late stage frenzy. That’s not only true for the Valley, it’s true for the stock market. And you could argue, those ripple effects are less well-understood. → Read More
