Yelp Goes Live in Australia as It Prepares for IPO
As online review service Yelp prepares for its initial public offering, the company quietly has gone live in Australia today.
Yelp's co-founder and chief executive Jeremy Stoppelman today gave an interview to Australia's SmartCompany, saying that businesses both online and off need to analyze how well and easily users can find them through search engines in the runup to the holiday season.
Yelp filed an S1 document with the Securities and Exchange Commission earlier this month to raise up to $100 million in an IPO, following in the footsteps of LinkedIn, Pandora and Groupon.
“I think users are already searching for something online, this does create a rising tide for local businesses and it makes them more visible than they used to be," Stoppelman said of Yelp. “Because I think Yelp has this community that starts to write about what these businesses have to offer, it creates an online discovery component to the business.”
Stoppelman and and his former PayPal co-worker Russel Simmons launched Yelp in 2004 in a start-up incubator called MRL Ventures. Since then, the site has attracted millions in funding and no small amount of controversy. In 2009 the company walked away from a half-a-billion-dollar takeover deal with Google, and later became the target of a class-action lawsuit. (For more on the love-hate relationship between small business and Yelp, check out Inc's February 2010 cover story.)
How is Yelp different than, say, Google Places?
“The difference between Yelp and Google Places is that consumers tend not to trust the reviews on Google–it tends to be more anonymous and there isn’t much context there. There isn’t much of a community behind it," Stoppelman said. “The depth of what they’re sharing you don’t tend to find on other review sites.”
Yelp isn't planning a marketing campaign, and Australia could be tough: Foursquare, for example, has not taken off there.
But Stoppelman thinks the news of Yelp's arrival will go viral. He said: “The way the site usually grows is really organic. There’s a little bit of content already there when we start, and then from there it all starts to trickle in. Then people stick around, do their own reviews, and that results in more traffic.”
He added: “The more people show up, the more reviews come on the site. So there isn’t going to be a big marketing push beyond just opening the site, and alerting folks we’re now in the market for anyone that’s interested.”
In documents filed with the SEC, Yelp pulled in $58.4 million in net revenue during the first nine months of 2011, up from $32.5 million in the same period of 2010. Yelp's revenue for 2010: $47.7 million.
The company is still losing money, though, posting an operating loss of $7.4 million for the nine months that ended Sept. 30.
The site currently has more than 61 million monthly unique visitors across 13 countries. Nearly half of the local businesses with consumer-generated Yelp reviews are restaurants or shopping.
Inc. contributing editor Courtney Rubin was for five years a London-based staff writer for People magazine. Rubin, a former senior writer for Washingtonian magazine, has written for the New York Times magazine, Time, Marie Claire, and other publications. She is the author of The Weight-Loss Diaries.