The apparent culprit: Active local business accounts, while up 55% Y/Y to 79.9K, fell short of expectations. "They increased about 5,900 sequentially, we were looking closer to about 7,700 merchant heads," says Raymond James' Aaron Kessler.
The active accounts still only make up a small fraction of the millions of businesses with Yelp pages. Yelp has invested heavily in its local ad salesforce to grow penetration rates. Kessler thinks an expansion of Yelp's search ad offerings could help with local business monetization.