10 months ago

As Yelp struggles, might a travel giant eat it?

With almost 170 million monthly visitors, estimated annual revenues of half-a-billion dollars, and a stock price that’s tumbled from a 2014 high of $97 to today’s mere $26, could Yelp be the next great acquisition in travel?

Currently, there are no signs of any such deals. But given the potential synergies between the local-business review site and the major players in the travel space, the idea doesn’t seem that far-fetched.

As Brian Blau, research director at Gartner, said to Tnooz:

“Yelp knows the local market really well. Travel companies are in sort of the same business — hotels, rental houses, etc., are also very local-business-oriented things.”

For a company like TripAdvisor, for example, Yelp could be an aggregation play, said Max Rayner, partner at Hudson Crossing:

“It’s right in their bailiwick. They could say we not only want to be dominant in travel reviews; we want to be dominant in reviews for entertainment and other local merchants.”

Other travel companies, meanwhile, might view Yelp as an asset against that potential dominance.

For instance, Alibaba Group, which has its new Alitrip travel brand, could get a leg up in North America by incorporating Yelp’s 90 million reviews — a move that could prove valuable in preventing users from clicking over to you know who.

Expedia and Priceline might be uninterested in Yelp, other experts speculated, because they may prefer going the “verified reviews” route of only displaying reviews from customers who have actually booked a room, activity, or other product.

Then there are the non-travel players, such as Facebook, which began testing its own local-review service in December (after several years of experimenting with its Facebook Places directory), and Google, which considered buying the company back in 2009 and instead bought Zagat in 2011. Considering that Yelp is, at-heart, a local ad business, its data could be tempting.

Still, given the buying binges some travel companies have been on in recent years, it’s not hard to imagine a more travel-centric acquisition. As Rayner says,

“Once you’re done eating up an entire vertical, what do you do for growth? You have to start looking to adjacent fields and activities, and entertainment are natural adjacencies for hospitality.”

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About the Writer :: Rob Lovitt

Rob Lovitt is a guest editorial contributor. Lovitt is a longtime travel writer based in Seattle. He has written for, and the inflight magazines of Alaska, Horizon, and Frontier airlines. Follow him on Twitter.



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  1. Tim

    If Yelp disappears all together the internet will be a better place. The reason they get 100x for their advertising compared to Google and Yahoo is because they have been blackmailing small businesses for years. There are a lot of lawsuits against Yelp in regards to this. Governments around the world did nothing to protect small businesses from this large predator. The scam was simple, pay us advertising dollars or we’ll only show bad reviews for your company. They hid behind a review filter technology to protect themselves in court. Eventually it became obvious that there was no technology behind their review filter, just a simple equation, advertising dollars = good reviews.

  2. Ben Julius

    As a tour company in Israel, we often have customers mention Yelp when researching our company. But then in Israel, there is no Yelp. The idea of a travel giant snapping up Yelp seems like a great thing, and it could create a truly international rival to Tripadvisor, whose review platform is of course excellent, but of course, another offer could help to spread the dominance of certain companies in Tripadvisor whose behaviour is not always truly ethical.

  3. Max Rayner

    With respect to one of the comments below, I’d note that usage of the word “absurd” has had a relative decline approaching 75% in the last 200 years or so. Perhaps because many things that once seemed absurd have had a way to surprise us, just ask flat earth advocates.

    Picking from recent examples, arguing against Gilt Groupe’s unicorn valuations would have been entirely reasonable, but arguing that it could not be acquired at any price would in fact be absurd: it was just acquired by Hudson’s Bay Company (owners of Sacks Fifth Avenue and Lord & Taylor) for $250 million. The same could be said of AOL, which eventually found a buyer.

    Hence the question around Yelp as a target is not so much one absurdity but one of price. Whatever one may think personally about a company, the market does set a price, and Yelp is still trading at fairly healthy multiples. Is it an obvious target now assuming that a control premium would have to be paid over current revenue multiples? Most likely not.

    But the question that Rob Lovitt poses about Yelp’s possible attractiveness for a strategic acquirer (at a different valuation if it starts to struggle on its own) is entirely reasonable and it may be best not be entirely deaf to it. That would indeed be absurdum.

  4. Willie

    The whole idea of an acquisition is absurd. First, if you acquire Yelp and integrate it into your website, Yelp is gone. Second, Yelp inventory of reviews are worthless in that 90% are outdated. Yelp does not retire reviews and some of them are 5 years old. In an industry with 100% to 300% turnover, a review is only valid for a short time in that who ever is responsible for the bad service is usually gone within six months. Last of all there is no magic in generating revenue at a loss. This first thing an acquirer would do is eliminate 2,000-3,000 sales people who generate some of the lowest revenues per employee in all the tech industry. However, once the sales staff are gone, so are the 1/2 B in revenues because Yelp renew rates are dropping and without a sales person, it is hard to sell advertising which is 100X as expensive as Google or Facebook. Not to mention every Yelp user who clicks on an ad shown by an outside ad server is “cookied” and remarketed by advertisers who use media other than Yelp. 5 years ago, Yelp would have been a deal. The number of competitors who can do what Yelp is doing is in the dozens and they are doing it at a fraction of the cost.


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