The Mobile Implications Of Google Buying Yelp
Tricia Duryee, MocoNews, 12/18/2009
It’s not hard to understand why Google is interested in buying Yelp, which has successfully created a community around thousands of real-world locations. It’s even monetized the content, and will reportedly make up to $30 million in revenues this year.
But it’s not a stretch to see why else Google’s interested in Yelp. It’s for mobile, too. To be sure, Yelp has built apps for the iPhone, Palm Pre, BlackBerry and Android—in addition to its mobile website. But it goes beyond that. As Google gets into mobile more, it will need local business information in order to provide valuable services. Imagine having richer content and data when getting driving directions from Google’s free maps or navigation app. Or, imagine getting information on the fly when walking down the street. Today, the content is informational, but tomorrow it could be advertising.
Google has already started to make moves in this space. In September, it rolled out ‘Place Pages,’ which are web sites that aggregate info about a specific place—from reviews, to images and videos. Users can access the information from Google Maps, and Google has an app called Places Directory on Android phones that pulls up information based on your location. Earlier this month, Google also started using barcodes. It mailed 100,000 barcodes to its most popular local businesses on its search engine so that they could put the barcodes up in their window. Customers can scan them with their phones to get to their Place Page. Google would easily be able to substitute that initiative with direct links to Yelp.
So far, reports peg the purchase price at or above $500 million (see more about the report at our sister site paidContent.org). And, Google can monetize Yelp on mobile using AdMob, the mobile ad network that it recently committed to purchasing for $750 million. Urbanspoon.com, which was bought by IAC in February, has demonstrated how lucrative mobile can be in the restaurant recommendation business. Soon after being featured on an iPhone commercial, it said it was making more than twice as much revenue from mobile users than it does from visitors to its web site. For example, 74 percent of UrbanSpoon’s traffic comes from Google, while 99 percent of its mobile traffic occurs on the iPhone. Revenue per 100,000 visitors on the Web is $2,000, whereas mobile is $5,000.
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In: Android, Blackberry, Mobile Technology, Palm, iPhone