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Yelp (YELP -6.8%) is off again today - shares are now down 20% since the local reviews leader...

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.
Comments (6)
  • corte33
    , contributor
    Comments (78) | Send Message
     
    Yep, YELP is a dog.
    5 Nov 2012, 01:36 PM Reply Like
  • Ashraf Eassa
    , contributor
    Comments (8761) | Send Message
     
    Yawn...haven't we learned to short these Internet IPOs?
    5 Nov 2012, 01:47 PM Reply Like
  • Windsun33
    , contributor
    Comments (4225) | Send Message
     
    I don't really see much else around in the way of competition, so it may not be as doggy as assumed.
    5 Nov 2012, 01:49 PM Reply Like
  • Seeking Beta To Your Alpha
    , contributor
    Comments (450) | Send Message
     
    @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.
    5 Nov 2012, 01:57 PM Reply Like
  • Windsun33
    , contributor
    Comments (4225) | Send Message
     
    I don't see most of those as competition for ratings. Some are highly specialized - like UrbanSpoon (which barely shows up in Google or Bing). FB is the last place I would look for ratings, and ANGI does not have the reach and is pay-for.

     

    I think Google/Bing are it's only serious competition, and so far I am not impressed with either for accuracy.
    5 Nov 2012, 03:05 PM Reply Like
  • rhunter9999
    , contributor
    Comments (2) | Send Message
     
    You are both correct. Entering the rating/review space has low to no barriers to entry so many players can and have entered. But none of the players, including Yelp, GRPN, etal. , have focused on the right issues to move to a profitable business model. Everyone focuses on the ratings/review and providing services to consumers but they seem to forget that local businesses are the "paying customers". They end up using antiquated B2B customer acquisition models like Outbound marketing that result in less than 2% B2B market penetration but cost them more than 65% of their revenue in marketing/sales cost. Until they fix the B2B customer acquisition model none of these companies will be successful in this space. For full disclosure, my team has developed a business model that will compete in this space and address the holes that I have discussed here.
    5 Nov 2012, 07:13 PM Reply Like
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