Does a Yelp IPO Change Anything for Yelp Users or Businesses?

Yelp IPO

The rumors surrounding online review service Yelp going public have been circulating for a couple of years now. Well, the San Francisco-based company finally decided to put an end to all the speculation because it recently filed its IPO papers with the SEC in an effort to raise $100 million. According to reports, it is hoping to start the year of 2012 off as a publicly traded company.

In this article, we will examine the Yelp IPO and its potential impact on the businesses that use it.

Failure to Profit

Founded in 2004, Yelp has become a valuable resource by providing reviews on restaurants, retail stores, bars and other venues. The service claims that it has more than 22 million reviews up to this point. Even with all its popularity, Yelp has struggled in the one area that truly counts for a business: profitability.

According to the numbers in the recent S-1 filing, it is steadily losing money. The filing shows that the company lost $9.6 million in 2010, and another $7.6 million during the first nine months of 2011. As of September 30, its total deficit stood at $32.1 million.

Despite the trouble it is having staying profitable, Yelp really does have a lot going for it. The company raised its net revenue to $47.7 million in 2010, which was a huge climb up from the $12.1 million it made in 2008. The upward trend continued in 2011 as it made $58.4 million in the first nine months of this year. Yelp makes most of its money from the businesses and brands that purchase advertising space on the platform. The filing documentation showed that $40,325 of its revenue in 2011 came from local businesses, while brands contributed $12,653. Aside from the general user base, these are obviously the entities it must appease with its IPO initiatives.

Increasing the Value

Going public is a risky move for any company, but one that could ultimately work out for Yelp and the businesses that rely on it as a marketing platform. If the service can use its newly acquired funds to integrate new features that will help businesses generate more traffic to their stores, it might actually go over very well. And because Yelp also thrives on search engine traffic, it will also need to ensure that it can sustain the SEO value it currently offers to marketers.

The company admitted that this could be one of its biggest challenges with search giant Google showing more interest in the local review game.

Yelp has established itself as a resource consumers can rely on to get the details needed to make informed decisions, and a tool that helps businesses increase their visibility. From the sounds of it, not even Yelp is sure that going public will solve its existing problems, but it is certainly determined to move forward and make the most of the situation.

Aidan Hijleh

Aidan Hijleh is a freelance copywriter and serves as the Non-Profit Partnership Liaison for Benchmark Email. Aidan advocates free email marketing services to assist with the flourishing of grassroots organizations.

5 thoughts on “Does a Yelp IPO Change Anything for Yelp Users or Businesses?

  1. I almost never comment, however I looked at a bunch of comments here Does a
    Yelp IPO Change Anything for Yelp Users or Businesses? | Soshable |
    Social Media Blog. I do have a couple of questions for
    you if you tend not to mind. Could it be simply me or do a few of these comments appear
    like they are written by brain dead people? 😛 And, if you
    are posting at other sites, I would like
    to follow you. Could you post a list of the complete urls of your public sites like
    your twitter feed, Facebook page or linkedin profile?

  2. During the entire packing and moving processes,
    moving firms of Delhi NCR provides utmost care. Hostgator
    claims that it uses shared and reseller servers which are 130% powered by wind and
    it has certified renewable energy credits needed for generating efficient and reliable dedicated servers.
    Until government incentives are brought forth, most of these companies
    aren’t going to make any sizable investments into renewable

  3. There are also several mundane electronic items that
    should be added to a college dorm shopping list to
    make a dorm feel more like home. The easier products to use are
    those that you rub into your skin. Does it give out an aura of all-around cleanliness.

  4. HCG homeopathic diet is one of the solutions which are gaining immense popularity for
    their popularity in helping people to lose weight speedily and in effective manner.

    The Homeopathic HCG drops are diluted and are working with a distinct principle from the other procedures.
    Not only are you probably consuming more calories in that one meal than you would’ve if
    you’ve just eaten small, healthy meals throughout the day, but you’ve slowed down your metabolism in the process, and
    turned yourself into a grouch.

  5. One more thing on which you need to pay attention to is fats and this is something that you should not be consumed in the large amount.
    But before you buy HCG drops you should know how they work.
    It is a bit pricey, but is well worth the extra money.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>