WebProNews

Tag: Yelp

  • Yelp Launches Revenue Estimation Tool

    Yelp announced the launch of a new “revenue estimator” tool, which lets local businesses compare their Yelp-driven business to the national average as found in a recent Boston Consulting Group study. According to that study, local businesses with free Yelp accounts saw $8,000 in annual revenue from Yelp. For advertisers, it was $23,000.

    This new free tool does the math by multiplying customer leads sent from Yelp each month by the business’s average revenue per customer lead,” explains Yelp in a blog post. We’ve also included the average spend per customer for each business category for reference, based on the BCG study.”

    Yelp Revenue Estimator

    “We think this new tool will be helpful to business owners for two reasons,” the company adds. “First, it helps quantify the revenue opportunity Yelp is already sending to each business. Second, it establishes a revenue baseline for prospective advertisers, from which they can later evaluate the impact of their investment in Yelp Ads.”

    Business owners can use the tool when they log in to Yelp.

    This isn’t the only new calculation tool out there available for businesses. Google just launched one too. This one helps you calculate the value of mobile for both online and offline conversions.

  • Yelp Earnings: Net Revenue Up 65% Year-Over-Year

    Yelp released its Q4 and full-year 2012 earnings report on Wednesday after market close. The company posted net revenue of $41.2 million for the quarter, a 65% year-over-year increase. Yelp also posted a $5.3 million net loss for Q4.

    Cumulative reviews grew 45% year-over-year to over 36 million by the end of the year. Average unique monthly visitors grew 31% year over year to about 86 million. Active local business accounts grew 68% year-over-year to approximately 39,800.

    Yelp also announced that in January, it surpassed 100 million uniques for the first time, and put out an infographic about it.

    CEO Jeremy Stoppelman said, “2012 was a tremendous year for Yelp. We completed a successful IPO, launched new products to improve the Yelp experience for consumers and business owners, expanded into new markets while increasing our presence in existing ones, and completed our first acquisition. We believe 2013 will be a tipping point for our brand in Europe as Yelp continues to become a trusted local resource. Our mobile strategy will remain a top priority as engagement increases, and we will continue to focus on the business owner, creating more ways to measure the value of Yelp leads.”

    Here’s the release in its entirety:

    SAN FRANCISCO, Feb. 6, 2013 /PRNewswire/ — Yelp Inc. (NYSE: YELP), the company that connects consumers with great local businesses, today announced financial results for the fourth quarter and full year ended December 31, 2012.

    (Logo: http://photos.prnewswire.com/prnh/20050511/SFW134LOGO)

    • Net revenue was $41.2 million in the fourth quarter of 2012, reflecting 65% growth in net revenue from the fourth quarter of 2011
    • Cumulative reviews grew 45% year over year to more than 36 million at the end of 2012
    • Average monthly unique visitors grew 31% year over year to approximately 86 million*
    • Active local business accounts grew 68% year over year to approximately 39,800

    Net loss in the fourth quarter of 2012 was $5.3 million, or $0.08 per share, compared to a net loss of $9.1 million, or $0.56 per share, in the fourth quarter of 2011.  Adjusted EBITDA for the fourth quarter of 2012 was approximately $1.8 million, compared to an Adjusted EBITDA loss of $15,000 for the fourth quarter of 2011.

    Net revenue for the full year ended December 31, 2012 was $137.6 million, an increase of 65% compared to $83.3 million in the same period last year.  Net loss for the full year ended December 31, 2012 was $19.1 million, or $0.35 per share, compared to a net loss of $16.9 million, or $1.10 per share, for the comparable period in 2011. Adjusted EBITDA for the full year 2012 was approximately $4.6 million compared to an Adjusted EBITDA loss of $1.1 million for the prior year.

    “2012 was a tremendous year for Yelp,” said Jeremy Stoppelman, Yelp’s chief executive officer. “We completed a successful IPO, launched new products to improve the Yelp experience for consumers and business owners, expanded into new markets while increasing our presence in existing ones, and completed our first acquisition.  We believe 2013 will be a tipping point for our brand inEurope as Yelp continues to become a trusted local resource.  Our mobile strategy will remain a top priority as engagement increases, and we will continue to focus on the business owner, creating more ways to measure the value of Yelp leads.”

    “Yelp continued to deliver growth and scale in 2012 with both revenue and Adjusted EBITDA ahead of our expectations,” added Rob Krolik, Yelp’s chief financial officer.  “These results, along with our strong operating metrics, demonstrate that our playbook continues to deliver growth across Yelp markets.”

    2012 Business Highlights

    • New market expansion: Yelp continued to launch new markets globally, accelerated its presence in Germany and U.K with the acquisition of Qype and opened its first international sales office in London. In the fourth quarter Yelp launched Poland andTurkey, bringing the total number of worldwide Yelp countries to 20.
    • Yelp mobile:  Yelp focused on enhancing the mobile experience, including the launch of local ads on apps. In the fourth quarter, 25% of local ads were shown on mobile devices and the mobile app was used on approximately 9.2 million unique mobile devices on a monthly average basis.
    • Increased brand distribution: Yelp branded content was integrated into the new Apple “Maps” application on iOS 6. Yelp also partnered with Bing to power their local business pages, and was incorporated into Mercedes and Lexus in-vehicle infotainment systems.
    • New products: Yelp introduced new features and enhancements throughout the year including dashboard metrics for business owners and a redesigned homepage placing a greater emphasis on the social graph and mobile activity. Yelp also introduced new products such as gift certificates and Yelp Menus.

    Business Outlook

    As of today, Yelp is providing guidance for the first quarter and full year of 2013.

    • For the first quarter of 2013, net revenue is expected to be in the range of $44.0 million – $44.5 million representing growth of approximately 62% compared to the first quarter of 2012. Adjusted EBITDA is expected to be in the range of $1.25 million -$1.50 million.
    • For the full year of 2013, net revenue is expected to be in the range of $210 million – $212 million, representing growth of approximately 53% compared to the full year of 2012. Adjusted EBITDA is expected to be in the range of $20 million to $22 million.

    Quarterly Conference Call

    To access the call, please dial (866) 770-7120, or outside the U.S. (617) 213-8065, with Passcode 89233749, at least five minutes prior to the 1:30 p.m. PT start time.  A live webcast of the call will also be available at http://www.yelp-ir.com under the Events & Presentations menu.  An audio replay will be available between 3:30 p.m. PT February 6, 2013 and 11:59 p.m. PT February 20, 2013by calling (888) 286-8010 or (617) 801-6888, with Passcode 31161883. The replay will also be available on the Company’s website at http://www.yelp-ir.com.

    About Yelp

    Yelp Inc. (http://www.yelp.com) connects people with great local businesses. Yelp was founded in San Francisco in July 2004. Since then, Yelp communities have taken root in major metros across the US, Canada, UK, Ireland, France, Germany, Austria, The Netherlands, Spain, Italy, Switzerland, Belgium, Australia, Sweden, Denmark, Norway, Finland, Singapore, Poland and Turkey. Yelp had a monthly average of approximately 86 million unique visitors in the fourth quarter 2012*. By the end of the same quarter, Yelpers had written more than 36 million rich, local reviews, making Yelp the leading local guide for real word-of-mouth on everything from boutiques and mechanics to restaurants and dentists. Yelp’s mobile applications were used on approximately 9.2 million unique mobile devices on a monthly average basis during the fourth quarter 2012.

    * Source: Google Analytics

    Non-GAAP Financial Measures

    This press release includes information relating to Adjusted EBITDA, which the Securities and Exchange Commission has defined as a “non-GAAP financial measure.” Adjusted EBITDA has been included in this press release because it is a key measure used by the Company’s management and board of directors to understand and evaluate core operating performance and trends, to prepare and approve its annual budget and to develop short- and long-term operational plans. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles.

    Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. Some of these limitations are:

    • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
    • adjusted EBITDA does not reflect changes in, or cash requirements for, the Company’s working capital needs;
    • adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation;
    • adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us;
    • adjusted EBITDA does not consider any dilutive impact of our contribution to The Yelp Foundation;
    • adjusted EBITDA does not take into account any restructuring and integration costs associated with our acquisition of Qype;  and
    • other companies, including those in the Company’s industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

    Because of these limitations, you should consider adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income (loss) and the Company’s other GAAP results. Additionally, the Company has not reconciled adjusted EBITDA guidance to net income (loss) guidance because it does not provide guidance for other income (expense) and provision for income taxes, which are reconciling items between net income (loss) and adjusted EBITDA. As items that impact net income (loss) are out of the Company’s control and/or cannot be reasonably predicted, the Company is unable to provide such guidance. Accordingly, reconciliation to net income (loss) outlook for the first quarter of and full year 2013 is not available without unreasonable effort.  For a reconciliation of historical non-GAAP financial measures to the nearest comparable GAAP measures, see “Reconciliation of Net Loss to Adjusted EBITDA” included in this press release.

    Forward-Looking Statements

    This press release contains forward-looking statements relating to, among other things, the future performance of Yelp and its consolidated subsidiaries that are based on the Company’s current expectations, forecasts and assumptions and involve risks and uncertainties. These statements include, but are not limited to, statements regarding expected financial results for the first quarter and full year 2013, the future growth in Company revenue and continued investing by the Company in its future growth and the Company’s ability to build Yelp communities internationally and expand its markets and presence in existing markets. The Company’s actual results could differ materially from those predicted or implied and reported results should not be considered as an indication of future performance. Factors that could cause or contribute to such differences include, but are not limited to: the Company’s short operating history in an evolving industry; the Company’s ability to generate sufficient revenue to achieve or maintain profitability, particularly in light of its significant ongoing sales and marketing expenses; the Company’s ability to successfully manage acquisitions of new businesses, solutions or technologies, including Qype; the Company’s reliance on traffic to its website from search engines like Google, Bing and Yahoo!; the Company’s ability to generate and maintain sufficient high quality content from its users; maintaining a strong brand and managing negative publicity that may arise; maintaining and expanding the Company’s base of advertisers; changes in political, business and economic conditions, including any European or general economic downturn or crisis and any conditions that affect ecommerce growth; fluctuations in foreign currency exchange rates;  the Company’s ability to deal with the increasingly competitive local search environment; the Company’s need and ability to manage other regulatory, tax and litigation risks as its services are offered in more jurisdictions and applicable laws become more restrictive; the competitive and regulatory environment while the Company continues to expand geographically and introduce new products and as new laws and regulations related to Internet companies come into effect; and the Company’s ability to timely upgrade and develop its systems, infrastructure and customer service capabilities. The forward-looking statements in this release do not include the potential impact of any acquisitions or divestitures that may be announced and/or completed after the date hereof.

    More information about factors that could affect the Company’s operating results is included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s most recent Quarterly Report on Form 10-Q at http://www.yelp-ir.com or the SEC’s website at www.sec.gov. Undue reliance should not be placed on the forward-looking statements in this release, which are based on information available to the Company on the date hereof. Yelp assumes no obligation to update such statements. The results we report in our Annual Report on Form 10-K for the twelve months ended December 31, 2012 could differ from the preliminary results we have announced in this press release.

    Media Contact Information
    Yelp Press Office
    Stephanie Ichinose
    (415) 908-3679
    [email protected]

    Investor Relations Contact Information
    The Blueshirt Group
    Stacie Bosinoff, Nicole Gunderson
    (415) 217-7722
    [email protected]

    Yelp Inc.
    Condensed Consolidated Balance Sheets
    (In thousands)
    (Unaudited)
    December 31, December 31,
    2012 2011
    Assets
    Current assets:
    Cash and cash equivalents $          95,124 $          21,736
    Accounts receivable, net 11,474 8,257
    Prepaid expenses and other current assets 4,912 1,733
    Total current assets 111,510 31,726
    Property, equipment and software, net 14,799 9,881
    Goodwill 48,735 –
    Intangibles, net 5,942 –
    Restricted cash 6,400 365
    Other assets 310 1,849
    Total assets $        187,696 $          43,821
    Liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit)
    Current liabilities:
    Accounts payable $            2,284 $            2,973
    Accrued liabilities 16,367 7,685
    Deferred revenue 2,856 2,072
    Total current liabilities 21,507 12,730
    Long-term liabilities 527 3
    Total liabilities 22,034 12,733
    Commitments and contingencies
    Redeemable preferred stock – 55,435
    Stockholders’ equity (deficit)
    Common stock – –
    Additional paid-in capital 225,245 16,625
    Accumulated other comprehensive  income 805 271
    Accumulated deficit (60,388) (41,243)
    Total stockholders’ equity (deficit) 165,662 (24,347)
    Total liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit) $         187,696 $           43,821

     

    Yelp Inc.
    Condensed Consolidated Statements of Operations
    (In thousands, except per share amounts)
    (Unaudited)

     
    Three Months Ended Twelve Months Ended
    December 31, December 31,
    2012 2011 2012 2011
    Net revenue $ 41,157 $ 24,905 $ 137,567 $  83,285
    Cost and expenses
    Cost of revenue (1) 3,003 1,833 9,928 5,931
    Sales and marketing (1) 25,511 16,024 85,915 54,539
    Product development (1) 6,244 3,162 20,473 11,586
    General and administrative (1) 7,852 5,267 31,531 17,234
    Depreciation and amortization 2,421 1,448 7,223 4,238
    Restructuring and integration costs 1,262 – 1,262 –
    Contribution to The Yelp Foundation – 5,928 – 5,928
    Total cost and expenses 46,293 33,662 156,332 99,456
    Loss from operations (5,136) (8,757) (18,765) (16,171)
    Other expense, net (203) (252) (226) (395)
    Loss before provision for income taxes (5,339) (9,009) (18,991) (16,566)
    (Provision)/Benefit for income taxes 20 (37) (122) (102)
    Net loss (5,319) (9,046) (19,113) (16,668)
    Accretion of redeemable convertible preferred stock – (48) (31) (189)
    Net loss attributable to common stockholders $ (5,319) $ (9,094) $ (19,144) $ (16,857)
    Net loss per share attributable to common stockholders:
    Basic $   (0.08) $   (0.56) $     (0.35) $     (1.10)
    Diluted $   (0.08) $   (0.56) $     (0.35) $     (1.10)
    Weighted-average shares used to compute net loss per share attributable to common stockholders:
    Basic 63,015 16,097 54,151 15,291
    Diluted 63,015 16,097 54,151 15,291
    (1) Includes stock-based compensation expense as follows:
    Three Months Ended Twelve Months Ended
    December 31, December 31,
    2012 2011 2012 2011
    Cost of revenue $        38 $        17 $        122 $         50
    Sales and marketing 1,746 496 4,917 1,607
    Research and development 696 164 1,705 721
    General and administrative 778 689 8,134 2,499
    Total stock-based compensation $   3,258 $   1,366 $   14,878 $    4,877

     

    Yelp Inc.
    Condensed Consolidated Statements of Cash Flows
    (In thousands)
    (Unaudited)
    Twelve Months Ended
    December 31,
    2012 2011
    Operating activities
    Net loss $ (19,113) $ (16,668)
     Adjustments to reconcile net loss to net

    cash (used in) provided by operating activities:
    Depreciation and amortization 7,223 4,238
    Provision for doubtful accounts 599 35
    Stock-based compensation 14,878 4,877
    Contribution to The Yelp Foundation – 5,928
    Loss on disposal of assets and web-site development costs 64 13
    Changes in operating assets and liabilities:
    Accounts receivable (2,017) (1,682)
    Prepaid expenses and other assets (2,384) (1,099)
    Accounts payable and accrued expenses 70 3,975
    Deferred revenue (443) 633
    Net cash (used in) provided by operating activities (1,123) 250
    Investing activities
    Acquisition of Qype GmbH, net of cash received (24,125) –
    Purchases of property, equipment and software (7,524) (4,798)
    Capitalized website and software development costs (2,930) (2,506)
    Change in restricted cash (6,013) (149)
    Cash used in investing activities (40,592) (7,453)
    Financing activities
    Proceeds from initial public offering, net of underwriter fees 114,006 –
    Payments for deferred offering costs (1,749) (456)
    Proceeds from issuance of common stock 3,675 2,038
    Repayment of acquired debt (1,308) –
    Net cash provided by financing activities 114,624 1,582
    Effect of exchange rate changes on cash 479 283
    Net increase in cash and cash equivalents 73,388 (5,338)
    Cash and cash equivalents at beginning of period 21,736 27,074
    Cash and cash equivalents at end of period $95,124 $21,736

     

    Yelp Inc.
    Reconciliation of Net Loss to Adjusted EBITDA
    (In thousands)
    (Unaudited)
    Three Months Ended Twelve Months Ended
    December 31, December 31,
    2012 2011 2012 2011
    Net loss $ (5,319) $ (9,046) $ (19,113) $ (16,668)
    Provision for income taxes (20) 37 122 102
    Other income (expense), net 203 252 226 395
    Depreciation and amortization 2,421 1,448 7,223 4,238
    Stock-based compensation 3,258 1,366 14,878 4,877
    Restructuring and integration costs 1,262 – 1,262 –
    Contribution to Yelp Foundation – 5,928 – 5,928
    Adjusted EBITDA $  1,805 $      (15) $    4,598 $   (1,128)

     

    SOURCE Yelp Inc.

  • Yelp Tops 100 Million Uniques For First Time

    Yelp announced today that it surpassed 100 million unique vistors on its site in January, marking the first time in Yelp history it has had that many uniques in a month.

    “That’s an all-time high for traffic to the desktop and mobile site and a clear indication that people are looking for local businesses and finding them on Yelp,” said CEO Jeremy Stoppelman in a blog post. “While that number is huge, it doesn’t even include the 9.4 million unique mobile devices that used the Yelp mobile app in January alone.”

    “Even more staggering than 100 million unique visitors using Yelp.com in January are the millions of contributions Yelpers made to the community in the same time frame,” he added. “The 4.6 million calls and 5.7 million directions generated through the Yelp mobile app and nearly 2 million bookmarks created by Yelpers are the connection between searching for a specific local business and making a spending decision.”

    According to Stoppelman, who cites a recent survey, business owners on Yelp report that the average customer across all categories spends $101.59 in their first visit.

    The company has put out this infographic to accompany its impressive traffic news:

    Yelp 100 million

  • Yelp Now Displays Health Inspection Scores for Restaurants in Participating Cities

    Yelp has partnered with the local governments in San Francisco and New York to put health inspection scores on the pages of the cities’ restaurants. It’s part of a bigger open data initiative, however, that Yelp hopes will enable other cities around the country to follow suit.

    Participating restaurants’ health scores will be displayed alongside the other business information like hours, price range, etc. If a user hovers over the score, Yelp will display an info box that tells them what it is they’re looking at.

    “Yelp works with local governments to show health inspection scores, ranked on a scale of 0-100,” it says.

    Yelp Health Scores

    You can click on through to access a more detailed report, which includes a list of the specific violations, the date in which the inspection occurred, and whether it was a routine inspection or another kind. You can also look at all of that information for previous inspections (but only in San Francisco currently).

    This new metric is enabled through Yelp’s new “open data standard” called the “Local INspector Value-entry Specification,” or LIVES for short. They say that LIVES was developed with the encouragement of the White House.

    “Public/private partnerships like this don’t necessarily provide a direct contribution to Yelp’s bottom line, but evidence suggests the LIVES open data standard will have a positive impact on society,” says Yelp.

    In the future, LIVES could be used by other city governments to follow suit with the inspection ratings on the site – if they so choose. Of course, governments are not always keen on opening up their data to the public.

    “We hope other cities will join San Francisco in fully embracing this new open data standard,” says Yelp.

    The first two cities to partner with Yelp in the venture are San Francisco and New York, but Yelp expects more to roll out in the coming months.

    [Photo courtesy Don McCullough, Flickr]

  • Yelp Reviews Ruled Free Speech Until Proven Defamatory. Right Call?

    Last month, in a case of free speech vs. business reputation, a Virginia judge ordered Yelp (and Angie’s List) user Jane Perez to change negative reviews on the sites, which cast a contractor as a thief. The contractor, Christopher Dietz (of Dietz Development), sued Perez for $750,000 in damages in a defamation case, claiming to have lost business (as much as $300,000) because of her negative postings. You can read the lawsuit here (pdf).

    The reviews in question indicate that Perez found her jewelry missing, and that “Dietz was the only one with the key.” One could see where a consumer might steer clear of a contractor with such a review. The problem, however, is that Perez has so far not been able to prove that Dietz stole her jewelry, and it’s basically one person’s word vs. the other’s. In addition to ordering her reviews changed, the injunction prevented Perez from being able to make similar claims on other sites.

    Do you think Perez’s negative reviews should be allowed to remain online? Let us know in the comments.

    The case goes on. However, since Perez was ordered to change her reviews, the ACLU and Public Citizen appealed the Fairfax County Judge’s decision in the name of free speech, and it went to the Supreme Court of Virginia, which overturned the temporary inunction, ruling:

    “Upon further consideration whereof, the Court also finds that the preliminary injunction was not justified and that the respondents have an adequate remedy at law.

    “This order shall be certified to the said circuit court.”

    In other words, the court found that Perez shouldn’t have to change the reviews as long as they have yet to be proven libelous, and being sued for damages was enough. Whether or not Dietz gets his victory, remains to be seen, but in the meantime, it looks like Perez’s words will be allowed to remain in tact. If they are found to be libelous, they would be required to be removed from the sites. That just has to be proven first, and in the meantime, it may still be costing Dietz some business.

    Interestingly, there is currently only one review listed for Dietz Development on Yelp, and it simply says: “I read about how these people sued a woman for giving them a negative review on Yelp. Scary stuff.”

    The review is accompanied by a single star rating, and it is the first thing you see when you search ro “Dietz Development” in Google:

    Dietz Development on Google

    It’s unclear why Perez’s review is not currently showing up on Yelp, in light of recent legal events. It is also interesting that while Yelp is only showing this single review (which, by the way, really isn’t about the business itself), it has 8 other reviews marked “filtered,” which it does not show unless you click the link, which also requires you to enter a CAPTCHA. Reviews in this section are mixed. Some are clear responses to the lawsuit, like:

    “They do shady work and then sue people if they post a negative review about them. Not cool.”

    …

    “Had my bathroom done in Fall 2011. It was an absolute nightmare. There was continuous argument over the crew not following my wishes. The project ended up looking terrible and they refused to make any changes without additional payment. Avoid this place at all costs.”

    …

    “I hired Dietz Development to build me a room/addition to my house for $20,000 and it would only take 2 weeks….somehow, they did a demolition job instead and dynamited everything, so now I have no house, just a hole in the ground! Plus the final bill was $30,000 (and it took them THREE weeks, not two!!!) Hey, at least my jewelry isn’t missing.”

    One simply says, “Called to get a quote, the person on the phone was very rude, I wish I had gotten his name. I did not use them based on customer service.”

    The other half of the reviews are quite positive, each with 5-star ratings. One user says, “Having SEEN the work this contractor does and MEETING him in the flesh, I can say you can expect top notch service from Dietz Development. Pay no mind to hateful hipsters who post negative reviews of a company they have no knowledge of.”

    Then, there are 65 reviews that Yelp says have been removed for violating content guidelines or terms of service. I would imagine that a number of people have dropped by the page to say something in response to the suit.

    Yelp’s filtering of reviews is automated. CEO Jeremy Stoppelman talks about it here. Here’s a video about it:

    Public Citizen, which has maintained an archive of court documents related to this case, called the Supreme Court’s decision “a positive move for free speech on the Internet”. In a press release, the organization wrote:

    Public Citizen argued that the contractor could get damages if, after a full trial, a jury agrees that Perez made false claims about him that meet the standard for libel. Because such a process has not occurred, forcing Perez to remove her comments amounted to censorship.

    “The decision confirms the importance of not shutting down public discussion on the Internet just because someone doesn’t like what’s being talked about,” said Paul Alan Levy, an attorney for Public Citizen. “Review sites like Yelp are vehicles for the free flow of ideas by helping consumers make informed decisions on how to spend their hard-earned dollars.”

    This is far from the first time a business has sued a consumer for negative reviews on sites like Yelp and Angie’s List. The outcomes have varied. As Bob Sullivan at NBC’s Red Tape points out, “An Oregon judge dismissed one lawsuit filed by a dentist earlier this year. Months earlier, a similar lawsuit filed by a church pastor was also dismissed. On the other hand, a case filed by a neurologist in Minnesota after negative comments was initially dismissed, but reinstated by a state appeals court earlier this year. And there are dozens of other ongoing cases — many involving health care — including one involving a Chicago plastic surgeon suing former patients for $100,000 after they criticized his work online.”

    “Still, the threat of a libel lawsuit has become a more common tactic by businesses trying to dissuade consumers from making critical comments in public forums,” he adds. “A Red Tape reader in Ohio complained last month that she was threatened with such a lawsuit after she placed a sign on her front lawn criticizing a home alarm company.”

    As far as review sites go, the companies behind them have protections against being held accountable for what users write in their policies, and in Section 230 of the Communications Decency Act.

    Liz Gannes at All Things D shares this statement from Yelp:

    Consumer freedom of speech provides an important public service, protected by law. Yelp provides a valuable contribution to this dialogue by providing a two-way platform for consumers to share their experiences and for businesses to respond to their customers. Courts have consistently ruled that consumers have the right to share their truthful experiences. As a result, businesses that choose to sue their customers to silence them rather than address their comments, rarely prevail and often bring additional unwanted attention to the original criticism.

    To that point, TechDirt’s Mike Masnick makes an interesting point about Dietz’s suit: “Whether or not the original allegations were true, now he’s made it clear that he’s willing to sue over reviews as well. It seems like most people might see that and decide to hire a contractor who not only has good reviews, but doesn’t have a history of suing his customers over their online reviews.”

    As we can see from the reviews currently on Yelp, consumers will see that he has sued.

    Reactions to the Dietz/Perez case from WebProNews readers have been mixed, but as business owners, many have sided with Dietz. Online reputation is indeed a serious issue for businesses. There’s no denying Dietz has a valid point about that. Negative reviews can hurt businesses financially, and if there are false accusations about your business out there, you obviously want to get them cleared up. It will be interesting to see how swiftly the courts are able to get the whole case sorted out. Regardless of which side is right, Dietz stands to lose business as it goes on.

    Do you think the courts got this one right so far? Let us know what you think in the comments.

  • Court Orders Yelp User To Change Review. Slippery Slope?

    This week, a Virginia judge ordered a Yelp user to change a negative review. Before we get into the specifics, just think about that for a second. Do you use Yelp (or any other service for that matter) to discuss your experiences at restaurants or with other businesses? Have you ever left a negative review of a business? Depending on what you say and how the business in question reacts, that freedom of speech thing you’ve grown so fond of may not be enough to hold up in a court of law.

    Should courts be able to make people change what they say online? Tell us what you think.

    On the flipside, however, as a business, should you not have legal recourse for accusations you believe to be false, in order to protect your business’ reputation, and avoid losing potential customers? It’s a tricky debate, and any legal rulings could have far-reaching implications for future cases. On the one hand, ruling against the reviewer risks opening the floodgates for such suits which could ultimately cost average consumers not only their voice, but unaffordable legal fees. On the other hand, ruling in favor of the reviewer could leave room for all kinds of smear campaigns from disgruntled consumers or even ex-employees of businesses who did not leave on the best of terms. It could, as one business claims, cost said business a great deal of money in lost customers.

    Now, let’s look at what we’re dealing with here. Jane Perez was sued by Dietz Development, a building contractor, who claims to have lost business because of her negative postings on sites like Yelp and Angie’s List. He sued for $750,000, and claimed that he lost $300,000 because of her words.

    What was so bad about the reviews? Perez reportedly indicated that the company had caused damage to her home, trespassed, and even stolen jewelry. According to reports, the judge granted a temporary injunction, and ordered Perez to change parts of the Yelp review – specifically the part about jewelry theft, which had said, “I found my jewelry missing and Dietz was the only one with a key.” She was also reportedly ordered to nix a part mentioning a previous lawsuit that Dietz had filed.

    Mail Online talked to Perez’s attorney, who is quoted as saying, “Obviously this is very chilling to free speech because folks are going to be very concerned and afraid to voice their opinions about businesses…We believe that these sites are the forum where we should be encouraged to write about our experiences with businesses.”

    The Dietz party maintains that its reputation is at stake, and that accusations are false. Mail Online also quotes Deitz’s lawyer as saying, “A bad review is one thing. But, it was a bad review that accused him of theft. And in this residential construction, commercial construction business – that’s a devastating accusation.”

    You can read the entire 27-page legal document here, courtesy of The Washington Post.

    It’s not really about this one case though. It’s about underlying theme, which is also woven throughout a growing number of similar complaints, not limited to Yelp, but to the web in general. We live in an era when anyone with a computer or a mobile phone can easily jump on Facebook, Twitter, or countless other sites, and say whatever is on their mind in any given moment. Not happy with the way your burger was put together at McDonald’s? You may wish to reconsider calling the worker who gave it to you names, as there is always a chance that the corporation that employees them decides it doesn’t like the way you’re representing their business.

    Sometimes name calling is name calling. Sometimes accusations are accusations, but the lines aren’t always that clear, and sarcasm and snark don’t always play as well as we hope they do when in written (or typed) form. Believe me. I’ve had plenty of sarcastic comments in articles throughout the years that simply didn’t land. A scathing metaphor about a person or business risks being taken as fact, and if the person or business on the other end of that scathe, decides to pursue legal options, well, they may just have a case.

    Social media, by the way, is working hard to eliminate online anonymity. In many cases, it won’t be hard for a complaint to put a name to the comments.

    As far as Yelp reviews go, there are plenty of business breaking the “rules” too. There have been enough businesses buying positive reviews on Yelp that Yelp had to start slapping alerts on business profiles who had been “caught red-handed” (Yelp’s own terminology). So, that’s one way businesses had of countering bad reviews that Yelp has essentially taken away (granted, with good reason).

    Some businesses, rather than suing or paying for good reviews, are simply having fun with the bad ones. I prefer this approach. San Diego’s Craft & Commerce is recording their bad Yelp reviews, and playing them for customers while they’re in the bathroom. Seriously. Awesome idea.

    Unfortunately, it’s quite likely, especially in light of the Perez case, more companies will take the legal route, rather than the bathroom humor route. Of course, you do have to get the customers in the door before you can get them in the bathroom.

    On a semi-related note, there has been a lot about Google’s handling of reviews in search results of late, as the company faces potential antitrust lawsuits from the FTC and EU. Yelp has been a big opponent of Google for some time.

    This whole thing seems to be validation that people are finding Yelp reviews just fine, regardless of how Google is treating its own search results. Yelp CEO Jeremy Stoppelman, a regular critic of Google’s business practices, was recently quoted as saying that Google has some “evil” business practices. He thinks Google shouldn’t be putting Google reviews ahead of other reviews (like Yelp’s).

    Yelp, by the way, gets somewhere around 84 million visitors a month, and has 22 million reviews. So many people use it that its reviews are often the basis of lawsuits.

    What do you think? Should the courts be determining what people are saying in online reviews? On social media? Comment here.

  • Restaurant Plays Peeing Patrons Their Negative Yelp Reviews

    Online reviews have been pissing off restauranteurs for many years now, and Yelp is one of the biggest offenders. I feel their pain – I mean, some woman gets in a fight with her boyfriend and then has one cold fry at your burger joint and she goes on to pen an epic teardown of your establishment that’s on record forever. But on the flip side, online review sites like Yelp and Urbanspoon have helped me avoid bad experiences in the past.

    But for a restaurant owner, I’m sure the terrible Yelp reviews are more memorable than the good ones. One restaurant is getting proactive by putting the bad reviews on display in the most clever place possible – the crapper.

    San Diego’s Craft & Commerce is taking a fun approach to negative reviews. They’re recording them, and playing them for patrons to hear when they’re going #1 or #2. You know what they say: if you can’t beat them, associate them with human waste.

    Craft & Commerce has a 4-satar rating on Yelp with over 900 reviews and boasts a Michelin-award winning chef – so it makes sense that they allow themselves the room to poke fun at themselves.

    But if you ever visit the restaurant, here’s are some of the reviews you might hear while taking a pee:

    What a disaster. Don’t think it was a typical night and the cocktails/mixology was as advertised but the kitchen was full of smoke and after waiting for an hour and a half we left without eating. BTW the ladies room was having serious issues as well. Sorry, truth hurts!

    On the surface, this is creative vibrant pub with loads of potential. What i found, was that if im not a hipster, neck beard vespa rollin’ type, I gets no love here. Terrible service, me and all my friends from work were blatantly dissed just because we opted to buy drinks instead of food and drinks. This ain’t Cuba!
    F$#% yo couch.

    3 of us walked in for dinner last Sunday. The menu print is too small to read in the dim light. No vodka. Great burger, but they don’t serve ketchup. This place takes it’s identity and itself too seriously. How can you have a burger and fries with no ketchup? They could make their own if they think Heinz is cheesy. Drinks are too froufrou. No vodka soda? You’d gain 10 lbs drinking all the sugar drinks. Would not go back.

    And they would probably sound something like this:

    [Foodbeast via Fark]

  • Larry Page Talks To FTC, Yelp Thinks Google Does Evil Things

    Google CEO Larry Page met with FTC officials in Washington on Tuesday, according to a report from Bloomberg. As previously reported, the FTC is close to closing its antitrust investigation into Google and recently gave Google a matter of days to come up with a proposal, though according to an earlier report from Bloomberg, the FTC didn’t seem to have much confidence that it has a case against Google in terms of the way Google presents results from its own products.

    Sara Forden, Jeff Bliss & Brian Womack report:

    Google has been engaged in settlement talks with the FTC for about a week, including an effort to define whether there’s a market where Google has a monopoly, one of the people said. The Mountain View, California-based company, operator of the world’s most popular search engine, is concerned that entering a formal settlement agreement with the agency may hurt its business prospects, the people said.

    Google competitors are still complaining about Google’s choice of providing its own results. At a Business Insider conference today, Yelp CEO Jeremy Stoppelman said that Google has some “evil” business practices, according to a report from CNET. Shara Tibken reports:

    Stoppelman said that any disruptive businesses, like Uber and Airbnb, are guaranteed backlash, and government and business entities shouldn’t necessarily be allowed to limit those businesses. However, Google’s practices are likely “worth taking a look at,” he said.

    “If you happen to be the gateway for the vast majority of users on the Internet and you restrict information and put your house property ahead of everyone else, you potentially harm consumers,” Stoppelman said. “We can all agree that’s probably not a good thing.”

    Well, we can probably all agree that harm to consumers is not a good thing, but I’m not sure there’s as much agreement as to whether or not Google’s practices are actually harming consumers. Last time I checked, it’s still rather easy to enter Yelp.com into a web browser’s address bar if one wants to see Yelp reviews. In fact, I’m pretty sure that most modern browsers enable you to set Yelp.com as your homepage if you want that to be your gateway to the Internet. I’m quite certain that Google even provides a wonderful gateway to Yelp.com should a user search for Yelp or Yelp reviews.

    Does going to Google.com and seeing reviews from Google hurt consumers more than going to Yelp.com and seeing reviews from Yelp?

  • Yelp Adds Restaurant Menus With User-Uploaded Photos

    Yelp is rolling out a new Menus feature, which compiles visual menus along with Yelp reviews and user-uploaded food pictures. These will be accessible from business pages, on the website and the Yelp app. You can find them under “Explore the Menu”.

    “Specifics on menu items, like description and price, will match up with Yelp’s user generated photos and reviews mentioning that particular dish,” explains a Yelp product manager in a blog post. “Feeling indecisive? Pick something with the “popular” tag – items Yelpers can’t stop talking about – and you’re guaranteed a good meal.”

    Yelp Menu

    Yelp Menu

    Yelp Menu

    The feature is starting to roll out today in the U.S. Yelp is quickly expanding its operations in Europe, so I would not be surprised to see the feature launch there in the near future.

    Interestingly, Yelp says this the first time it has rolled out a new feature on its website, mobile website and mobile app all at the same time.

  • Yelp Sued Over “Best Of” City Recommendations

    If you’re a Yelp user, you’re probably familiar with their “Best of” feature that appears at the top of city pages. For instance, visiting Yelp’s Denver page gives users a best of snapshot complete with restaurants, nightlife, shopping, and various other categories of services.

    That “Best of” box is now the subject of a new lawsuit. Village Voice Media Holdings, the once-publishers of alternative weekly newspaper The Village Voice as well as well as other papers in Denver, Houston, Dallas, Miami, Seattle, and more, has filed a suit against Yelp. They claim that Yelp is willingly infringing upon their trademarked “Best of” marks and “taking advantage of Village Voice Media’s goodwill and valuable reputation.”

    Village Voice Media is seeking damages and a permanent injunction against Yelp, barring them from using the “Best of” phrase on their site.

    VVMH does have over a dozen registrations for various “best of”s, for instance “Best of Denver,” “Best of Houston,” “Best of Phoenix,” and “Best of San Francisco.” In all, they cite 18 different trademarks covering 10 different cities. These registrations were made starting back in 1997, up until 2012.

    According to Paid Content, this isn’t the first time Village Voice Media Holdings has gone after an entity for the use of “Best of.” Last year, they took on the Time Out New York magazine for their publication of a “best of NYC” issue. VVMH was hit with a countersuit, which claimed that the phrase “Best of” is generic.

    You can check out the full lawsuit below:

    IMAGE 10-29-12 112805

  • Yelp Acquires Qype, Shares Preliminary Q3 Financial Results

    Yelp has acquired European reviews site Qype. Yelp has acquired all of Qype’s shares, for about €18.6 million and 970,000 shares of Yelp’s Class A common stock, bringing the total purchase price to about $50 million USD.

    Qype is based in Germany, but also has operations in the UK, and Yelp notes that the acquisition will be recorded in its fourth quarter and 2012 year-end financial statements.

    Yelp CEO Jeremy Stoppelman said, “I am excited to welcome Qype’s employees and users to Yelp. We have built a solid foundation in Europe and this acquisition should significantly increase our international presence. With its strong local content in key markets like Germany and the United Kingdom, we believe that Qype will help Yelp become the de facto choice for local search in those markets. Qype’s established European sales force will also bring more local business owners into the Yelp ecosystem, which in turn will bolster our mission to connect people with great local businesses all over the world.”

    Yelp has been expanding in Europe all year. In March, it launched in Sweden. In April, it launched in Denmark. In May, it launched in Norway. In June, it launched in Finland. In July, it expanded its UK operations. Just this month, Yelp launched in Poland. Now, with this acquisition, it’s clear that Yelp is really going for dominance in Europe.

    Qype CEO Ian Brotherston talked about the news on the Qype blog. “There is no question that Yelp has been a leading force in the local business reviews space for years,” he says. “They have built an international product and brand that has generated north of 30 million reviews; a site that more than 78 million monthly unique visitors seek when looking for a great local business.”

    “Through the hard work of our employees and our users, more than two million reviews of local businesses have been contributed to our site and we are now seeing more than 15 million monthly unique visitors,” he adds. “Our users reviews and opinions will be amplified as we become part of a much bigger and broader platform.”

    Yelp also provided preliminary financial results for the third quarter. Revenue and Adjusted EBITDA for Q3 exceeded the company’s previous guidance. Revenue is expected to be about $36.4 million, with a net loss of $2 million expected for the quarter. Adjusted EBITDA is expected to be about $2.2 million.

    The company will put out its actual earnings report on November 1.

  • Yelp Slaps Consumer Alerts On Business Pages For Those Who Have Paid For Reviews

    Yelp announced today that it is now showing warnings to users when they have found businesses that have paid for reviews. If you are looking at such a business on the site, you’ll be greeted with a “Consumer Alert”. This comes with a message that says:

    “We have caught someone red-handed trying to buy reviews for this business. We weren’t fooled, but wanted you to know because buying reviews not only hurts consumers, but also honest businesses who play by the rules. Check out the evidence here.

    Yelp will remove the alert from the business’ page after 90 days, unless they find more efforts to mislead consumers. Yelp indicates that nine businesses will have the alert showing up at launch, but it will appear on any other pages for businesses Yelp finds to be in violation.

    Yelp says its automated review filter is “working around the clock” to flag these kinds of reviews.

    Eric Singley, Yelp’s VP of Consumer Products and Mobile, says, “As efforts to game the system continuously evolve, so do our methods for combating it. An independent Businessweek report confirmed the success of Yelp’s efforts to protect consumers. The article details the efforts of a Texan business owner who purchased 200 online reviews in an attempt to artificially bolster his business’s online reputation. The report found that Yelp’s review filter returned ‘impressive results’ catching every purchased review, while the shill reviews remained up on seven other review sites.”

    “Beyond alerting consumers to attempts to purchase reviews, the next step will be to let consumers know if a business has had a large number of reviews submitted from the same Internet Protocol (IP) address, which can be a helpful indicator that they lack authenticity,” he adds. “While the review filter already takes this type of information into account, we believe that consumers also have a right to know if this activity is going on.”

    He does reassure users that most businesses on Yelp are playing by the rules.

  • Foursquare to Launch New Search-Oriented Homepage

    We say it a lot whenever we’re talking about Foursquare – but the company that started as a simple gamified check-in app has been consistently “moving beyond the check-in” as of late. They recently launched a massive redesign of their mobile app on both Android and iOS that puts an emphasis on “exploring,” and finding locations based on friend activity and previous activity of users themselves.

    And it’s really all about the data. The company has had years now to compile millions of individual pieces of data on locations around the world. Now, it looks like they’re making another move to use that data in a way that helps them grow into a true competitor in the local search game.

    According to Search Engine Land, Foursquare will be unveiling a brand new homepage for logged-out users this afternoon. The new page’s purpose is singular: to display Foursquare’s search bar prominently, so that people will think of Foursquare as the first place to go when looking for info on local establishments.

    Here’s the current Foursquare homepage for logged-out users:

    Foursquare old homepage

    And here’s how the new page will look with the front-and-center search box:

    Search results on Foursquare already include user reviews, composite scores, locations, and more. They also allow for searcher to filter those results (a functionality that is much more useful when you’re logged in).

    Foursquare wants people to know that their not just about check-ins and mayorships anymore. With all of the data, Foursquare is poised to compete with other services like Yelp and even Urbanspoon (when it comes to food). This small homepage redesign shows that they are serious about staking their place in the crowded world of local search.

    The new homepage is not live yet, and we’ll have more on this later.

  • Pizza Guy Who Bear Hugged Obama Finds Support on Facebook

    Who would’ve thought that a simple hug could lead to so much online political posturing?

    The last week has undoubtedly been a rollercoaster ride for Scott Van Duzer, owner of local pizza place Big Apple Pizza in Fort Pierce, Florida. Images and video or Van Duzer lifting and hugging President Obama during a campaign stop went viral, and that attention led to his business’ Yelp page being flooded with negative reviews. Most of those negative comments had nothing to do with his pizza, if you catch my drift.

    One 1-star reviewer wrote “i wouldn’t hug obama nor would i vote for him, now i sure will not oder from your resturant!!” Another 1-star reviewer wrote, “We all have the right to voice our political opinions. However if you use your business or foundation to do so, you should be prepared to accept the consequences. I will get my pizza elsewhere.”

    Another said “Can’t recommend a place that let’s vermin like the POTUS into it’s establishment. At the end of the day do you really want to go to a place whose pizza is so bad and politically charged that the cheese falls to the left?”

    Many of the recent reviews do mention the pizza, but the flood of 1-star reviews in the hours and days after the hug went viral suggests ulterior motives.

    Big Apple’s rating currently sits at four and a half stars, no doubt inflated by supporters who sought to restore the rating after it dipped dramatically due to the many 1-star reviews.

    But Yelp isn’t the only place to sound off online, and Big Apple Pizza’s Facebook page is seeing a flood of support. Out of the 100 most-recent Timeline posts, barely a handful are negative.

    Polticis aside, this serves as a cautionary tale for small business owners. Even the smallest of gestures, or one controversial action can lead to an absolute mess. Ah, the power of anonymity and the internet.

  • The Man Who Hugged Obama Has His Yelp Page Turned Into A Political Turf War

    One of the funnier stories from last week featured President Obama visiting a local pizza shop in Fort Pierce, Florida called Big Apple Pizza. The owner, Scott Van Duzer, gave the president a mighty bear hug. I thought the Secret Service would swoop in and tackle the guy, but it seems that even they know when a hug is just a hug.

    Anyway, that seemingly innocuous event of a man hugging a person he respects has turned into an all out political turf war on the restaurant’s Yelp page. Anti-Obama people have begun to create Yelp profiles and are flooding the page with one-star reviews claiming that the food is terrible or the sanitation is not up to snuff. It would be more believable if the reviewers were from Florida or it they had more than one review attributed to their profile.

    Yelp was quick to act by removing all of the baseless reviews, but they keep flooding in. It doesn’t look like it’s going to stop either with the restaurant now featuring over 2,000 reviews in the span of just a week. Big Apple Pizza still retains a five star rating that’s been bolstered by those in the pro-Obama camp.

    Obama Bear Hugger Yelp Page

    The worst part about all of this is that this man’s Yelp page has now become the site of the petty political wars that you see on Facebook or Twitter. There is no discussion or compromise. There is only those who think they can change the larger political discourse of America through a social networking site about food. It’s absolutely ridiculous.

    In all honesty, Yelp should just delete all of the reviews after the incident – both conservative and liberal. Reviews from both camps don’t belong as they are politicizing an issue that never deserved to be politicized. Lord help us if Romney is hugged by a small business owner who owns a Yelp page.

    [h/t: The FW]

  • Restaurant Claims Yelp Is Deleting Their Positive Reviews

    Do you use Yelp? If so, you probably let it decide which restaurant you’re going to visit when traveling. You don’t want to eat at a potentially bad place and Yelp helps decide what’s good in a community based upon what others have said. Losing good reviews could seriously hurt a small business, yet one restaurant claims that Yelp themselves are manipulating their reviews.

    A small restaurant named Verace in Shelton, Connecticut told local news WFSB that Yelp has been taking down their positive reviews. They claim that it’s all because they refused to buy advertising. Since then, positive reviews have been removed from the site.

    The restaurant’s owner, Kelly Calandro, says that she thought she did something wrong, but soon found that other small businesses claim the same thing. It’s true that Yelp has been sued in the past for their business practices, but nobody has ever won against them.

    For their part, a Yelp spokesperson told WFSB that they would never manipulate reviews over money. They also reiterated the fact that court cases brought against them by small businesses have never been successful.

    As of now, the restaurant has only three reviews on Yelp with the best being a three out of five. The restaurant has only been open for less than a year, however, so the small number of reviews could be within normal operations. Calandro offered no proof that reviews were deleted so you’ll just have to take her story at face value.

    WFSB Channel 3

  • Yelp Has A New Redesign, And Here’s What It Looks Like

    Most of the time, when a popular site pushes out a major redesign, it gets a large amount of backlash from users who liked the way things were. Whether users like Yelp’s new design or not, I don’t think many would disagree that it was badly in need of some sprucing up from its very dated look.

    “Over the years we’ve seen mobile contributions grow at a rapid clip,” says Yelp’s Mark Allen of the redesign. “Photos, Tips, check-ins and comments from your friends are a fantastic way to find great local businesses. We wanted to bring those to the front and center of Yelp.com and give you an easy way to share and explore your friends’ activity across Yelp.com and Yelp’s mobile apps.”

    “You’ll notice that the new design places a greater emphasis on activity from you and your friends,” he adds. “In addition to long-standing favorites like Review of the Day, Hot New Businesses and Fresh Lists, now you’ll be able to see all sorts of new stuff, including (but not limited to) photos and Tips left by your friends, events they are going to, recent places you’ve checked-in to and Useful, Funny, Cool votes your reviews have received.”

    Here’s what the new homepage looks like:

    Yelp redesign

    The new design will be rolling out gradually over the next few weeks. What do you think?

  • Yelp Stock Up On Upbeat Q2 Earnings Report

    Yelp has released its Q2 earnings report. The company managed to beat Wall Street expectations with revenue of $32.7 million for the quarter, up 67% from the same quarter last year.

    At the same time, Yelp’s cumulative reviews grew by 54% from the same quarter last year, reaching over 30 million.

    Perhaps even more telling of Yelp’s post-IPO success is that average monthly unique visitors grew by as much as 52% from the same period last year. The number is now at over 78 million. Meanwhile, active local business accounts grew by 113% year-over-year, hitting about 32,000.

    CEO Jeremy Stoppelman said, “Yelp’s second quarter performance highlights the underlying power of our model. By focusing almost singularly on cultivating rich, authentic local content, we have created a unique platform that is rapidly becoming the de facto local search engine for connecting consumers with great local businesses. We are now active in 90 Yelp markets around the world and are seeing an increase in our consumer engagement, especially on mobile, where their connection to local businesses is enhanced by the location-based capabilities of their mobile devices.”

    CFO Rob Krolik added, “We achieved record results across all of our financial and operating metrics and notably delivered $1.6 million of adjusted EBITDA. We will continue to invest in growing our platform and expanding overseas to extend the Yelp brand around the world.”

    Things appear to be looking up for Yelp. The new mobile app is supposed to be “awesome,” and Yelp is about to get some iOS 6 integration.

    Yelp stock is currently up 14.24%‎ in after hours trading.

    Here’s Yelp’s release in its entirety:

    Yelp Announces Second Quarter 2012 Financial Results
    Net Revenue Increases 67% Over Second Quarter 2011

    SAN FRANCISCO, Aug. 1, 2012 /PRNewswire/ — Yelp Inc. (NYSE: YELP), the company that connects consumers with great local businesses, today announced financial results for the second quarter ended June 30, 2012.

    (Logo: http://photos.prnewswire.com/prnh/20050511/SFW134LOGO)

    • Net revenue was $32.7 million in the second quarter of 2012, reflecting 67% growth in net revenue from the second quarter of 2011
    • Cumulative reviews grew 54% year over year to more than 30 million
    • Average monthly unique visitors grew 52% year over year to more than 78 million*
    • Active local business accounts grew 113% year over year to approximately 32,000

    Net loss in the second quarter of 2012 was $(2.0) million or $(0.03) per share, compared to a net loss of $(1.2) million, or $(0.08) per share, in the second quarter of 2011. Adjusted EBITDA for the second quarter of 2012 was approximately $1.6 million, compared to$649,000 for the second quarter of 2011.

    “Yelp’s second quarter performance highlights the underlying power of our model,” said Jeremy Stoppelman, Yelp’s chief executive officer.  “By focusing almost singularly on cultivating rich, authentic local content, we have created a unique platform that is rapidly becoming the de facto local search engine for connecting consumers with great local businesses.  We are now active in 90 Yelp markets around the world and are seeing an increase in our consumer engagement, especially on mobile, where their connection to local businesses is enhanced by the location-based capabilities of their mobile devices.”

    “We achieved record results across all of our financial and operating metrics and notably delivered $1.6 million of adjusted EBITDA,” added Rob Krolik, Yelp’s chief financial officer.  “We will continue to invest in growing our platform and expanding overseas to extend the Yelp brand around the world.”

    Net revenue for the six months ended June 30, 2012 was $60.0 million, an increase of 66% compared to $36.1 million in the same period last year.  Net loss for the six months ended June 30, 2012 was $(11.8) million, or $(0.26) per share, compared to a net loss of$(3.9) million, or $(0.27) per share, in the comparable period in 2011. Adjusted EBITDA for the first six months of this year was approximately $630,000 compared to a loss of $(231,000) for the first six months last year.

    Business Highlights

    • New market expansion: Yelp launched 8 new markets in the second quarter, including Denmark, Finland, Norway and Madison, Wisconsin, increasing the total active markets worldwide to 90.
    • Yelp Mobile:  Yelp mobile apps were used on approximately 7.2 million unique mobile devices on a monthly average basis for the quarter.  The company continued to enhance the mobile experience by adding features such as check-in comments and likes, the addition of photos in all search results, an “About Me” tab, and check-in visualizations on the iPad.
    • Deeper integration with Apple in iOS 6: Apple announced at its Worldwide Developer’s Conference 2012 that it intended to integrate Yelp-branded content in Siri and the new Apple “Maps” application on iOS 6, with links that would take users directly to Yelp.
    • Integration with Bing to power local search: Yelp’s rich review snippets, photos, business attributes and more have been integrated into Bing’s new local business pages for relevant categories, making it easier to discover a new or notable establishment nearby.
    • Expansion in United Kingdom: Yelp opened a London office to ramp its sales efforts in Europe.

    Business Outlook

    As of today, Yelp is initiating guidance for its third quarter of 2012 and raising its full year 2012 revenue and adjusted EBITDA guidance.

    • For the third quarter of 2012, net revenue is expected to be in the range of $34.5 million to $35.5 million. Adjusted EBITDA is expected to be in the range of $750,000 to $1.25 million.
    • For the full year of 2012, net revenue is expected to be in the range of $135 million to $136 million, representing growth of 62% to 63% compared to the full year of 2011. Adjusted EBITDA is expected to be in the range of $3 million to $4 million.

    Quarterly Conference Call

    Yelp will discuss its quarterly results today via teleconference at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time).  To access the call, please dial (800) 322-5044, or outside the U.S. (617) 614-4927, with Passcode 66407649, at least five minutes prior to the 1:30 p.m. PT start time. A live webcast of the call will also be available at http://www.yelp-ir.com/ under the Events & Presentations menu.  An audio replay will be available between 3:30 p.m. PT August 1, 2012 and 11:59 p.m. PT August 15, 2012 by calling (888) 286-8010 or (617) 801-6888, with Passcode 73138751. The replay will also be available on the Company’s website at http://www.yelp-ir.com/ for approximately 90 days after the call.

    About Yelp

    Yelp Inc. (NYSE: YELP) (http://www.yelp.com) connects people with great local businesses. Yelp was founded in San Francisco inJuly 2004. Since then, Yelp communities have taken root in major metros across the US, Canada, UK, Ireland, France, Germany,Austria, The Netherlands, Spain, Italy, Switzerland, Belgium, Australia, Sweden, Denmark, Norway and Finland. Yelp had a monthly average of approximately 78 million unique visitors in Q2 2012*. By the end of the same quarter, Yelpers had written more than 30 million rich, local reviews, making Yelp the leading local guide for real word-of-mouth on everything from boutiques and mechanics to restaurants and dentists. Yelp’s mobile applications were used on 7.2 million unique mobile devices on a monthly average basis during Q2 2012.
    * Source: Google Analytics

    Non-GAAP Financial Measures

    This press release includes information relating to Adjusted EBITDA, which the Securities and Exchange Commission has defined as a “non-GAAP financial measures”. Adjusted EBITDA has been included in this press release because it is a key measure used by the Company’s management and board of directors to understand and evaluate core operating performance and trends, to prepare and approve its annual budget and to develop short- and long-term operational plans. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles.

    Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. Some of these limitations are:

    • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
    • adjusted EBITDA does not reflect changes in, or cash requirements for, the Company’s working capital needs;
    • adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation;
    • adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; and
    • other companies, including those in the Company’s industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

    Because of these limitations, you should consider adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income (loss) and the Company’s other GAAP results. Additionally, the Company has not reconciled adjusted EBITDA guidance to net income guidance because it does not provide guidance for other income (expense) and provision for income taxes, which are reconciling items between net income (loss) and adjusted EBITDA. As items that impact net income (loss) are out of the Company’s control and/or cannot be reasonably predicted, the Company is unable to provide such guidance. Accordingly, reconciliation to net income (loss) is not available without unreasonable effort.  For a reconciliation of historical non-GAAP financial measures to the nearest comparable GAAP measures, see “Reconciliation of Net Loss to Adjusted EBITDA” included in this press release.

    Forward-Looking Statements

    This press release contains forward-looking statements relating to, among other things, the future performance of Yelp and its consolidated subsidiaries that are based on the Company’s current expectations, forecasts and assumptions and involve risks and uncertainties. These statements include, but are not limited to, statements regarding expected financial results for the third quarter and full year 2012, the future growth in Company revenue and continued investing by the Company in its future growth. The Company’s actual results could differ materially from those predicted or implied and reported results should not be considered as an indication of future performance. Factors that could cause or contribute to such differences include, but are not limited to: the Company’s short operating history in an evolving industry; the Company’s ability to generate sufficient revenue to achieve or maintain profitability, particularly in light of its significant ongoing sales and marketing expenses; the Company’s reliance on traffic to its website from search engines like Google, Bing and Yahoo!; the Company’s ability to generate and maintain sufficient high quality content from its users; maintaining a strong brand and managing negative publicity that may arise; maintaining and expanding the Company’s base of advertisers; changes in political, business and economic conditions, including any European or general economic downturn or crisis and any conditions that affect ecommerce growth; fluctuations in foreign currency exchange rates;  the Company’s ability to deal with the increasingly competitive local search environment; the Company’s need and ability to manage other regulatory, tax and litigation risks as its services are offered in more jurisdictions and applicable laws become more restrictive; the competitive and regulatory environment while the Company continues to expand geographically and introduce new products and as new laws and regulations related to Internet companies come into effect; and the Company’s ability to timely upgrade and develop its systems, infrastructure and customer service capabilities. The forward-looking statements in this release do not include the potential impact of any acquisitions or divestitures that may be announced and/or completed after the date hereof.

    More information about factors that could affect the company’s operating results is included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s most recent Quarterly Report on Form 10-Q at http://www.yelp-ir.com or the SEC’s website at www.sec.gov. Undue reliance should not be placed on the forward-looking statements in this release, which are based on information available to the Company on the date hereof. Yelp assumes no obligation to update such statements. The results we report in our Quarterly Report on Form 10-Q for the three months ended June 30, 2012 could differ from the preliminary results we have announced in this press release.

    Media Contact Information
    Yelp Press Office
    Stephanie Ichinose
    (415) 908-3679
    [email protected]

    Investor Relations Contact Information
    The Blueshirt Group
    Todd Friedman, Stacie Bosinoff, Nicole Gunderson
    (415) 217-7722
    [email protected]

    Yelp Inc.
    Condensed Consolidated Balance Sheets
    (In thousands)
    (Unaudited)
    June 30, December 31,
    2012 2011
    Assets
    Current assets:
    Cash and cash equivalents $   122,613 $          21,736
    Accounts receivable, net 10,120 8,257
    Prepaid expenses and other current assets 2,630 1,733
    Total current assets 135,363 31,726
    Property, equipment and software, net 11,632 9,881
    Restricted cash 6,362 365
    Other assets 491 1,849
    Total assets $   153,848 $          43,821
    Liabilities redeemable convertible preferred stock and stockholders’ equity (deficit)
    Current liabilities:
    Accounts payable $       2,698 $            2,973
    Accrued liabilities 9,194 7,685
    Deferred revenue 1,276 2,072
    Total current liabilities 13,168 12,730
    Long-term liabilities 2 3
    Total liabilities 13,170 12,733
    Commitments and contingencies
    Redeemable preferred stock – 55,435
    Stockholders’ equity (deficit)
    Common stock – –
    Additional paid-in capital 193,657 16,625
    Accumulated other comprehensive  income (loss) 79 271
    Accumulated deficit (53,058) (41,243)
    Total stockholders’ equity (deficit) 140,678 (24,347)
    Total liabilities, redeemable convertible preferred stock and  stockholders’ equity $    153,848 $           43,821

     

     

    Yelp Inc.
    Condensed Consolidated Statements of Operations
    (In thousands, except per share amounts)
    (Unaudited)
    Three Months Ended Six Months Ended
    June 30, June 30,
    2012 2011 2012 2011
    Net revenue $ 32,653 $ 19,578 $  60,038 $ 36,078
    Cost and expenses
    Cost of revenue (1) 2,298 1,285 4,424 2,561
    Sales and marketing (1) 20,333 12,347 39,103 23,618
    Product development (1) 4,336 2,661 8,476 4,980
    General and administrative (1) 5,963 3,584 16,692 7,201
    Depreciation and amortization 1,661 924 3,022 1,743
    Total cost and expenses 34,591 20,801 71,717 40,103
    Loss from operations (1,938) (1,223) (11,679) (4,025)
    Other expense, net 22 75 (8) 183
    Loss before provision for income taxes (1,916) (1,148) (11,687) (3,842)
    Provision for income taxes (66) (17) (97) (29)
    Net loss (1,982) (1,165) (11,784) (3,871)
    Accretion of redeemable convertible preferred stock – (47) (31) (94)
    Net loss attributable to common stockholders $ (1,982) $ (1,212) $ (11,815) $ (3,965)
    Net loss per share attributable to common stockholders:
    Basic $   (0.03) $   (0.08) $     (0.26) $   (0.27)
    Diluted (0.03) $   (0.08) (0.26) $   (0.27)
    Weighted-average shares used to compute net loss per share attributable to common stockholders:
    Basic 60,887 14,985 46,075 14,770
    Diluted 60,887 14,985 46,075 14,770
    (1) Includes stock-based compensation expense as follows:
    Three Months Ended Three Months Ended
    March 31, March 31,
    2011 2010 2011 2010
    Cost of revenue $        35 $        11 $         58 $        20
    Sales and marketing 895 281 2,019 552
    Research and development 300 173 543 320
    General and administrative 628 483 6,667 1,159
    Total stock-based compensation $   1,858 $      948 $    9,287 $   2,051

     

    Yelp Inc.
    Condensed Consolidated Statements of Cash Flows
    (In thousands)
    (Unaudited)
    Six Months Ended
    June 30,
    2012 2011
    Operating activities
    Net loss. $      (11,784) $  (3,871)
     Adjustments to reconcile net income (loss)  to net
     cash (used in) provided by operating activities:
    Depreciation and amortization 3,022 1,743
    Provision for doubtful accounts 108 (4)
    Stock-based compensation 9,287 2,051
    Loss on disposal of assets and web-site development costs… 37 6
    Changes in operating assets and liabilities:
    Accounts receivable (1,973) 22
    Prepaid expenses and other assets (918) (411)
    Accounts payable and accrued expenses 577 1,272
    Deferred revenue (796) (37)
    Net cash (used in) provided by operating activities (2,440) 771
    Investing activities
    Purchases of property, equipment and software (1,927) (1,478)
    Capitalized website and software development costs (1,590) (1,055)
    Change in restricted cash (6,008) (365)
    Cash used in investing activities (9,525) (2,898)
    Financing activities
    Proceeds from initial public offering, net of offering costs 112,257 –
    Proceeds from issuance of common stock 762 396
    Net cash provided in financing activities 113,019 396
    Effect of exchange rate changes on cash (177) (200)
    Net increase in cash and cash equivalents 100,877 (1,931)
    Cash and cash equivalents at beginning of period 21,736 27,074
    Cash and cash equivalents at end of period $      122,613 $   25,143

     

    Yelp Inc.
    Reconciliation of Net Loss to EBITDA
    (In thousands)
    (Unaudited)
    Three Months Ended Six Months Ended
    June 30, June 30,
    2012 2011 2012 2011
    Net loss $ (1,982) $ (1,165) $ (11,784) $ (3,871)
    Provision for income taxes 66 17 97 29
    Other income (expense), net (22) (75) 8 (183)
    Depreciation and amortization 1,661 924 3,022 1,743
    EBITDA (277) (299) (8,657) (2,282)
    Stock-based compensation 1,858 948 9,287 2,051
    Adjusted EBITDA $  1,581 $     649 $       630 $    (231)

     

    SOURCE Yelp Inc.

  • Yelp App For iPhone Is Supposed To Be “Awesome”

    Yelp has redesigned its mobile experience, and it’s getting a great deal of praise (particularly the updated iPhone app).

    “The old design of our business pages has served us well, but it was time for a remodel,” said Yelp’s Director of Consumer & Mobile Products in a blog post. “We tore it down to the studs and built it back up with an eye on aesthetics and efficiency. We think you’ll find browsing business details, photos, review highlights, reviews and tips far more enjoyable.”

    There’s also a new “pull to view” feature, which lets the user pull down the page and release to jump into a gallery of photos for a business.

    The tech blogosphere seems to be loving the new app. SlashGear says the update “brings the awesome”.

    “The updates do enhance the usefulness of Yelp,” says CNET’s Lance Whitney, noting that the update brings “lots of ‘awesomeness’.

    PC Magazine concurs that it comes with “loads of ‘awesomeness’.”

    Actually, “awesomeness” is how Yelp is pitching the updated app. in the App Store, Yelp says in the “what’s new” section, “This update is literally filled to the brim with awesomeness. We’re not joking — we had to get an intern to stand on the top of it just to get it zipped up and shipped to the App Store.”

    Beyond the new app, Yelp should be getting plenty of love from iPhone users in the near future, as it will be integrated into Apple’s Maps product with the forthcoming iOS 6, due out this fall.

    People without iPhones can still experience some mobile Yelp updates. The company has also redesigned its mobile site at m.yelp.com. The site now lets users log into their Yelp accounts to view and create bookmarks and add tips.

    “While basic in functionality, these features and improved user interface are instrumental in deepening mobile engagement with our users,” the company says.

    There’s also an iPad update, which lets users vote on and compliment reviews, upload photos and edit business info.

  • iOS 6 Maps Getting Yelp Check-Ins?

    iOS 6 Maps Getting Yelp Check-Ins?

    When Apple unveiled iOS 6 during their WWDC 2012 keynote two weeks ago, they showed of a whole slew of new features. One of the most noteworthy, of course, was the all-new Maps app. The new Maps, done largely in-house by Apple, has includes a 3D Flyover mode and Siri-integrated turn-by-turn navigation. Those features alone are pretty impressive. One new Maps feature that Apple apparently didn’t mention, though, is Yelp integration.

    According to a report this morning from Bloomberg, Apple’s new Maps app will include support for Yelp check-ins. Yelp already has a ridiculously handy iOS app that lets you find businesses, read and write reviews, and check in (a la Foursquare or Facebook or, well, just about any other social app these days). It’s not clear how many of Yelp’s features will be integrated into iOS Maps, but references to – and screenshots of – the check-in feature have been found in the iOS 6 software development kit (SDK) released by Apple following the keynote.

    While integrating a check-in feature with Maps is a brilliant idea, the choice of Yelp seems an odd one. After all, another iOS 6 feature unveiled during the keynote was Facebook integration. Facebook, as you probably know, has its own check-in feature. That raises a very interesting question: why does iOS Maps integrate Yelp check-ins rather than Facebook check-ins? What about Foursquare, which is much more popular as a check-in service than Yelp?

    Of course, it could be that iOS 6 Maps will have integration with other check-in services, and the references have not been found in the SDK yet. Or there could be some special deal between Apple and Yelp. There are three months (roughly) until the launch of iOS 6 and the new iPhone (probably). A lot can happen in that time, so for the moment we’ll just have to wait and see.

  • Bing Tops Google, Ties Yellow Pages for Best Local Search

    Bing’s local search tool recently received a 500cc injection of good, wholesome vitamin Yelp to boost the quality of search results for local businesses. The Bing Local “Powered by Yelp” combo looks to go a long way in improving local search, especially as it continues to become available for more businesses and more locations. However, according to a recent study, Bing was already doing pretty good work before that Yelp team-up.

    Search Engine Land cites a new study by Implied Intelligence that compared 19 different local search services, including Bing Local, Google Maps, several services under the Yellow Pages umbrella, Foursquare, Yelp, and Mapquest. Implied Intelligence looked at criteria such as record coverage, phone errors, address errors, duplicate listings, and more with each service in 1,000 local businesses in the United States. Of all the services included in the study, Bing tied for the top spot with both Superpages and Yellowbook, both of which belong to the Yellow Pages collection of directories. Google Maps wasn’t far behind at fourth and Yellowpages rounded out the top five (SEL has bar graphs along with the full scores of the rest of the search engines if you’re interested).

    Implied Intelligence completed a similar study prior to this most recent one in which Bing actually ranked fourth behind Google Maps; Superpages and Yellowpages were ranked first and second, respectively. Comparing the two studies, Implied Intelligence deemed Bing the most improved local search service (at least among those included in the first study).

    Since Bing and Yelp just announced their new local search partnership all of five days ago, I’m presuming that the data in Implied Intelligence’s study does not include any of the “Powered by Yelp” results that are beginning to show up for local businesses. However, Yelp placed at the #8 spot on the most recent study and #6 in the first study. I’m deducing that the quality of Yelp’s local search didn’t diminish in the time between the two studies so much as two new services, Yahoo and Whitepages, were added to the second study and simply outscored Yelp, thus pushing it down a couple of spots.

    Of course, no single local search service is going to be the one directory to rule them all because if that were the case, this kind of comparison would be unnecessary. Still, in the shadow of this report, the question for Bing is whether including Yelp in its local search will actually devalue the search engine’s local results or if Bing will be able to maintain a top score among local search services. I would think that Bing’s search algorithms would be smart enough so as to not have the partnership actually result in an inferior quality but rather include from Yelp what Bing might initially have been missing. At least, that’s what my hope is.

    We’ve asked Implied Intelligence to confirm whether or not the Bing Local Powered by Yelp data was included in this study, but have yet to receive a reply.

    At any rate, that Bing was able to best Google in accuracy of local search results echoes what Bing’s VP of Program Management Derrick Connell recently said when comparing the two search engines. Speaking at a Q&A at SMX Advanced 2012 earlier this month, Connell made the claim that Bing was at least as good as Google in some aspects and possible better in others.

    This results coming out of Implied Intelligence’s study would confirm Connell’s claims.

    Update: According to Implied Intelligence, the tests on local search quality were conducted around May 15th, 2012, meaning the Yelp data wouldn’t have been included in Bing Local results.