Report: Google-Yelp Deal Not Happening Now

Dec 21, 2009 at 9:36am ET by Dan Spelzmann

Something apparently happened. First TechCruch reported Yelp was going to sell to Google for $500 million or more. There was a frenzy of speculative coverage (including by me) that followed this initial report. The NY Times appeared to independently confirm that Yelp was going to sell. And I spoke to someone (not at Yelp) who confidently said that a deal was happening though he indicated its particular form might be different than what was reported.

Back in the hall of mirrors TechCrunch is now saying that the deal is not happening, that “Yelp walked away” and that the “deal went sideways.” TechCrunch says it was CEO Jeremy Stoppelman’s decision. If so it was in consultation with others, including VCs/board members. This is not a decision that Stoppelman would make — or have the authority to make — on his own.

Mike Arrington speculates that another bidder/party came in and “gave Stoppelman the confidence” to say no to the deal (”Apple, Microsoft”). TechCrunch also says its sources convey that Yelp will remain independent for the time being.

Some Yelp partisans may rejoice at the apparent rejection of Google’s offer: “Jeremy join us and together we can rule the (local) galaxy as father and son.” To some this deal might have seemed a betrayal of Yelp’s community values and mission; however that wouldn’t be a legitimate basis for rejecting it. Something much more specific and concrete that must have happened.

As Arrington suggests, perhaps a third party investor has come forward with the promise of a big cash infusion. Or perhaps the board now sees an IPO opportunity down the line. But you don’t walk away — and your hungry investors don’t let you walk away — from this kind of money without some very clear and concrete alternatives.

Most of us already predicted that the deal of Yelp and G would play out just any other acquisition google had in the past. Surprisingly, even with the generous ‘gift’ of 500 Million dollars presented by Goog, Yelp still found a way to turn it down. Why? here’s a detailed point of view: http://bit.ly/yelp-decline-google-best-worst

Last week, the blogosphere was abuzz about the reported acquisition of Yelp by Google for a little over half a billion dollars. The acquisition was said to be imminent, given it was in the very last stages. Unfortunately for Google, Yelp CEO Jeremy Stoppleman turned down the deal at the very last minute over the weekend.

At the moment, there’s no information as to what made Yelp reconsider the deal. Though, there’s speculation that other company has secretly come to Yelp with a much better offer. The companies in question vary, from Microsoft to Apple, who recently acquired music service Lala. More on this as we find out more.

What do you think went wrong?

[ TechCrunch ]

Thanks to phones like the Droid, more and more online services are taking an interest in developing mobile apps for Google’s Android platform. The latest company entering the Android pool is Yelp. Yelp already has mobile apps for the iPhone, BlackBerry, Palm Pre and WAP phones.

Yelp for Android determines your current location (either using built-in GPS or a Wi-Fi-based location) and then lets you search for nearby businesses, read reviews of establishments and access a moveable Google map that can help you easily redefine your search based on locale.

Yelp’s game plan for its mobile apps: Release an app that’s a useful, stable product first, and then add bells and whistles and other updates over time. Yelp says they plan to release more updates to the Android app before the new year, but wanted to make the app available so Yelp users could start taking advantage of the service now.

In addition to location-aware searches, Yelp for Android also lets users filter their search by “Price,” “Open Now,” “Special Offers” and “Hot on Yelp.”

Yelp for Android is available in the Android Market and works in all of Yelp’s markets (U.S., Canada, UK and Ireland). The app is free — just go to the Android Market on your handset and search for Yelp.

As impressive as Yelp is, Google isn’t buying the company for its page views. Google, uh, tends to be the one doling those out. No, a Google-Yelp deal makes sense because Yelp has built up two big assets: an impressive sales infrastructure and an extremely valuable user-base.

First, while Google’s AdWords program is as near to plug-n-play as advertising gets, Yelp has cultivated a sales team that literally calls or walks into local café and asks them for the advertising dollar. And although Yelp now gives all businesses, advertisers or not, some control over their Yelp page, the value-add that advertisers get—picking their favorite review to show up first, having their listing appear as an ad on a competitor’s page—is both unique and useful on the market. Right now, Google’s local content is still a bit of a mess: uncurated, incomplete, and sometimes inaccurate. So Google would be buying a huge set of intensely managed, data-dense (opening hours, delivery, cuisine types, payment methods, etc.) local business listings to replace its own. Right now, somewhere, a Google database operator is drooling over writing the code to perform that merge.

Second, Google needs Yelp’s userbase. No, really. While Yelp expends a fair amount of energy managing listings and building up cities, there comes a tipping point when its users, who earn monikers like “elite,” start performing much of the curation. And these users, unlike say, Facebook’s, are self-selected as having expressed a profound interest in supporting local commerce, writing reviews, and generally being engaged members of the community. That’s something Google, for all its wonders, has yet to boast: an intensely engaged, content-generating community. To be able to pick up a mature one in a single swoop, and one devoted to commerce at that, would be a coup for the search engine.

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