@StoneFox, the "content" analysis doesn't work. Yelp may "own" the reviews that are posted on the site, but it doesn't have the ability to keep people from posting reviews on other sites.
Someone who eats at a restaurant can post the same review on Yelp, Google, TRIP, ANGI, etc.
More importantly, Google is starting to win the local content wars. Six months ago, Yelp's reviews outnumbered Google local reviews about 5 - 1 for most restaurants. That number has dropped significantly. I suspect it has a lot to do with the way that Google has revamped their local restaurant searches.
Don't take my word for it though. Do a Google search for your favorite restaurant or your favorite category of restaurant. You should notice a significant difference than what you found six months ago. You'll also notice that each restaurant has a lot more local reviews on Google.
Yelp will be bought out by another company before 2014...and it will be bought out at a price similar to what Yelp paid for Qype...
My 5 Summer Stock Market Flings For 2013 [View article]
Another thing that has the potential to hurt Yelp is the gigantic revenue gains that it saw last year during this time.
Yelp benefited greatly from significant improvements on dismal performance. Most of the poor performance was blamed on the company "just going public" and the characterization that Yelp was a nascent technology company (even though its been around almost as long as FB).
Last quarter, it was clear that revenue growth stalled (Yelp had to spend a ton of money to generate growth). Fortunately for Yelp, it did so poorly in the comparison quarter from the year before, that the results still looked like it was expanding at a rapid pace.
It will be interesting to compare this quarter's results with last year's same quarter results. Based on the large number of insider transactions, I suspect the outcome will not be as favorable as it was last year (when Yelp was the subject of significant hype due to its integration with Apple).
How The Decision To List Health Code Ratings Could Hurt Yelp [View article]
@ Trainer,
I think economicsmaster had it backwards. I think economicsmaster believes that this move will help Yelp long term because he is mixing up Yelp's users with the company's customers.
How The Decision To List Health Code Ratings Could Hurt Yelp [View article]
@ Nash1983,
If a city hires a swat team, there are two ways to look at it. One way to say, "great!, my city hired a swat team to fight violent crime."
Another way to look at it is, "hey, we didn't need a swat team before, looks like we've got a serious violent crime problem in the city."
Yelp needs the review filter because it has a serious problem with bad reviews. If you don't believe me, explain how a Taco Bell in Chicago becomes one of that city's best rated restaurants? Check the article in the link below.
Yelp - On Track To Potentially Become The MySpace Of Online Review [View article]
FB probably got out of the review business because its just not very profitable. Users don't want to pay for information (which is why business models that charge for review information like ANGI don't make money). The "pay for info" model doesn't seem to work because it also has the effect of limiting reviews, which in turn reduces content, thereby making the business model ineffective.
The alternative free information model (which Yelp is based on) relies on advertising generated by local businesses. Unfortunately, if a company doesn't monitor the content of the reviews, it leads to what Anthony Bourdain has dubbed the "bathroom wall" effect. Moreover careful monitoring of reviews is expensive since it requires a person to actually read and think about the content. Rather than hire an army of reviewers (which would put Yelp even deeper in the red) Yelp has essentially become the "bathroom wall" of online review (it has tried to "crack down" on bad content and also created an algorithm that "hides" low quality reviews, but each of these "fixes" comes with another set of associated problems). Yelp has essentially sacrificed the quality of its review content in order to generate quantity, which has lead to the significant deterioration of quality. This in turn seems to have placed Yelp at complete odds with a large segment of its "customer" base. What local business wants a ton of nasty notes written by a handful of disgruntled customers highlighted for the world to see?
Rather than dealing with the headache of both of these types of online review models FB did the smart thing and came up with "Graph Search." Now individuals can simply search for places that their friends frequent...and who better to trust than the people who are your friends!
Yelp - On Track To Potentially Become The MySpace Of Online Review [View article]
Looks like Yelp's response to FB's announcement was to announce that Yelp would be releasing health code ratings to restaurants on the website. Hopefully a new article discussing this move will be posted by SA shortly.
Top 5 M&A Ideas That Could Reinvent Yahoo [View article]
YELP is not on the table as an acquisition target. Yahoo already indicated it will be looking for tech and talent, not content. Also, Yelp's overpriced shares makes it very very unattractive.
If you don't believe me, just read what Marissa Mayer had to say about the subject in the link below. Your article would've been more accurate if it replaced "YELP" with Open Table, since that's more along the lines of what Yahoo is looking at these days.
Yelp (YELP -6.8%) is off again today - shares are now down 20% since the local reviews leader issued its Q3 report. In addition to concerns about high expenses and low revenue for new accounts, the Street seems bothered by Yelp's forecast for Q4 display ad sales to be "flat-to-down" Q/Q due to "execution challenges." Separately, GigaOm recently noted Yelp is responsible for many of the errors found in iOS 6 Maps' POI data. [View news story]
@Windsun - competition is GOOG, FB, YHOO, ANGI, TRIP, UrbanSpoon, Opentable, Restaurant.com, foursquare, and every other Tom, Dick, & Harry with a website that lets folks vent about local businesses. Not to mention that AMZN, GRPN, and Living Social are each in the exact same space and could let users "review" businesses by simply tweaking their websites...
Not sure how the Street let Yelp get to $1B valuation. Even ANGI is way overvalued and its currently trading in the $10 range.
Traffic on Yelp is starting to plummet. Expect a Q4 miss and then watch as the company's stock price hits single digits.
Yelp Is A Good Company, But There Is Still Room For Decline [View article]
@ Trainer Yeah, I saw your comment and shared your confusion. When I think of a good company, most of them actually make more money than they spend.
Such a minor point, that its easy for investors and SA contributors to overlook the fact that Yelp is actually supposed to be a publically listed company on the NYSE rather than a non-profit organization.
Yelp Is A Good Company, But There Is Still Room For Decline [View article]
To piggyback on doomonyou's comment, not only is FB a major thorn, but YELP had nothing to address concerns about its inability to monetize mobile (see http://bit.ly/TYQyq6).
As more eyeballs shift to mobile, YELP is ill-prepared to deal with upstarts like FourSquare who are clearly the dominant player in mobile and ill-prepared to deal with more developed tech players like FB, GOOG, and YHOO.
YELP's problem is that it is a mid-sized player that needs to be acquired in order to survive, but it just hasn't realized that yet. Its too big to be nimble (like FourSquare) and its lack of resources prevents it from competing with the likes of GOOG, YHOO, and FB for talent and technology (smaller upstarts have no reason to want to be acquired by YELP when they have better options).
Of course, because only key advantage it has is content, if it doesn't get acquired in the next year, it will become worthless as other players start getting users to shift production of content onto their sites.
YELP either gets acquired at $5 - $10 a share within the next year or so, or it dies a gruesome death.
Yelp Is A Good Company, But There Is Still Room For Decline [View article]
Be careful not to confuse a service that you like (i.e. free information available online) with a good company/business model.
I love my local shelter and the work that it does to save stray animals, but I'd never invest money in it if it tried to convince me that it would be a profitable business...
I use Yelp as one of many resources before spending money in a restaurant or before I buy a service, but the business model is horrible (for too many reasons to list in a comment) and has no prospect of ever making money.
Yelp Is A Good Company, But There Is Still Room For Decline [View article]
"Good" companies normally turn a profit every now and then. YELP has had five consecutive quarters of no profit. The only shot it had of ever making money was with its integration into APPL maps last quarter and we all just saw how that turned out.
Now that we know that APPL maps is a complete bust, and now that we know that the business space YELP occupies is about to get a whole lot more crowded (GOOG, YHOO, FB, Foursquare, UrbanSpoon, OpenTable, Restaurant.com, etc.) explain to me how YELP has any potential of becoming profitable (it has already conceded that the European Qype acquisition won't be contributing towards profitability anytime soon).
So if investor expectation is for a public company to turn a profit every now and then (we'll agree to disagree on whether that such an expectation should be labeled "high") explain how "good" companies are unable to do this? Alternatively, explain to me again, why YELP is a "good" company?
Yelp: Future King Of Content [View article]
Someone who eats at a restaurant can post the same review on Yelp, Google, TRIP, ANGI, etc.
More importantly, Google is starting to win the local content wars. Six months ago, Yelp's reviews outnumbered Google local reviews about 5 - 1 for most restaurants. That number has dropped significantly. I suspect it has a lot to do with the way that Google has revamped their local restaurant searches.
Don't take my word for it though. Do a Google search for your favorite restaurant or your favorite category of restaurant. You should notice a significant difference than what you found six months ago. You'll also notice that each restaurant has a lot more local reviews on Google.
Yelp will be bought out by another company before 2014...and it will be bought out at a price similar to what Yelp paid for Qype...
My 5 Summer Stock Market Flings For 2013 [View article]
Yelp benefited greatly from significant improvements on dismal performance. Most of the poor performance was blamed on the company "just going public" and the characterization that Yelp was a nascent technology company (even though its been around almost as long as FB).
Last quarter, it was clear that revenue growth stalled (Yelp had to spend a ton of money to generate growth). Fortunately for Yelp, it did so poorly in the comparison quarter from the year before, that the results still looked like it was expanding at a rapid pace.
It will be interesting to compare this quarter's results with last year's same quarter results. Based on the large number of insider transactions, I suspect the outcome will not be as favorable as it was last year (when Yelp was the subject of significant hype due to its integration with Apple).
How The Decision To List Health Code Ratings Could Hurt Yelp [View article]
I think economicsmaster had it backwards. I think economicsmaster believes that this move will help Yelp long term because he is mixing up Yelp's users with the company's customers.
How The Decision To List Health Code Ratings Could Hurt Yelp [View article]
Yes, that was exactly my point.
How The Decision To List Health Code Ratings Could Hurt Yelp [View article]
How The Decision To List Health Code Ratings Could Hurt Yelp [View article]
If a city hires a swat team, there are two ways to look at it. One way to say, "great!, my city hired a swat team to fight violent crime."
Another way to look at it is, "hey, we didn't need a swat team before, looks like we've got a serious violent crime problem in the city."
Yelp needs the review filter because it has a serious problem with bad reviews. If you don't believe me, explain how a Taco Bell in Chicago becomes one of that city's best rated restaurants? Check the article in the link below.
http://bit.ly/Wn0X1X
Yelp - On Track To Potentially Become The MySpace Of Online Review [View article]
The alternative free information model (which Yelp is based on) relies on advertising generated by local businesses. Unfortunately, if a company doesn't monitor the content of the reviews, it leads to what Anthony Bourdain has dubbed the "bathroom wall" effect. Moreover careful monitoring of reviews is expensive since it requires a person to actually read and think about the content. Rather than hire an army of reviewers (which would put Yelp even deeper in the red) Yelp has essentially become the "bathroom wall" of online review (it has tried to "crack down" on bad content and also created an algorithm that "hides" low quality reviews, but each of these "fixes" comes with another set of associated problems). Yelp has essentially sacrificed the quality of its review content in order to generate quantity, which has lead to the significant deterioration of quality. This in turn seems to have placed Yelp at complete odds with a large segment of its "customer" base. What local business wants a ton of nasty notes written by a handful of disgruntled customers highlighted for the world to see?
Rather than dealing with the headache of both of these types of online review models FB did the smart thing and came up with "Graph Search." Now individuals can simply search for places that their friends frequent...and who better to trust than the people who are your friends!
Yelp - On Track To Potentially Become The MySpace Of Online Review [View article]
Yelp - On Track To Potentially Become The MySpace Of Online Review [View article]
Top 5 M&A Ideas That Could Reinvent Yahoo [View article]
If you don't believe me, just read what Marissa Mayer had to say about the subject in the link below. Your article would've been more accurate if it replaced "YELP" with Open Table, since that's more along the lines of what Yahoo is looking at these days.
http://on.wsj.com/WpM42o
Yelp (YELP -6.8%) is off again today - shares are now down 20% since the local reviews leader issued its Q3 report. In addition to concerns about high expenses and low revenue for new accounts, the Street seems bothered by Yelp's forecast for Q4 display ad sales to be "flat-to-down" Q/Q due to "execution challenges." Separately, GigaOm recently noted Yelp is responsible for many of the errors found in iOS 6 Maps' POI data. [View news story]
Not sure how the Street let Yelp get to $1B valuation. Even ANGI is way overvalued and its currently trading in the $10 range.
Traffic on Yelp is starting to plummet. Expect a Q4 miss and then watch as the company's stock price hits single digits.
Yelp Is A Good Company, But There Is Still Room For Decline [View article]
Yeah, I saw your comment and shared your confusion. When I think of a good company, most of them actually make more money than they spend.
Such a minor point, that its easy for investors and SA contributors to overlook the fact that Yelp is actually supposed to be a publically listed company on the NYSE rather than a non-profit organization.
Yelp Is A Good Company, But There Is Still Room For Decline [View article]
As more eyeballs shift to mobile, YELP is ill-prepared to deal with upstarts like FourSquare who are clearly the dominant player in mobile and ill-prepared to deal with more developed tech players like FB, GOOG, and YHOO.
YELP's problem is that it is a mid-sized player that needs to be acquired in order to survive, but it just hasn't realized that yet. Its too big to be nimble (like FourSquare) and its lack of resources prevents it from competing with the likes of GOOG, YHOO, and FB for talent and technology (smaller upstarts have no reason to want to be acquired by YELP when they have better options).
Of course, because only key advantage it has is content, if it doesn't get acquired in the next year, it will become worthless as other players start getting users to shift production of content onto their sites.
YELP either gets acquired at $5 - $10 a share within the next year or so, or it dies a gruesome death.
Yelp Is A Good Company, But There Is Still Room For Decline [View article]
I love my local shelter and the work that it does to save stray animals, but I'd never invest money in it if it tried to convince me that it would be a profitable business...
I use Yelp as one of many resources before spending money in a restaurant or before I buy a service, but the business model is horrible (for too many reasons to list in a comment) and has no prospect of ever making money.
Yelp Is A Good Company, But There Is Still Room For Decline [View article]
Now that we know that APPL maps is a complete bust, and now that we know that the business space YELP occupies is about to get a whole lot more crowded (GOOG, YHOO, FB, Foursquare, UrbanSpoon, OpenTable, Restaurant.com, etc.) explain to me how YELP has any potential of becoming profitable (it has already conceded that the European Qype acquisition won't be contributing towards profitability anytime soon).
So if investor expectation is for a public company to turn a profit every now and then (we'll agree to disagree on whether that such an expectation should be labeled "high") explain how "good" companies are unable to do this? Alternatively, explain to me again, why YELP is a "good" company?