Although Yelp is facing competition from the likes of Google, Groupon and LivingSocial, it continues to do well and grow in terms of the number of users and reviews posted on the site.
Google, Groupon and LivingSocial now include user reviews on their sites. These sites compete directly with Yelp, which is essentially a local business guide built on user reviews.
Details about the Yelp’s progress and strategies were discussed by the company’s CFO, Herman Vlado, during the Goldman Sachs Technology and Internet conference in San Francisco, reports Ben Parr from Mashable. He mentioned that they grew from 39 million visitors to the site in November 2010 to 45 million visitors in January this year. They also had 15 million reviews at the end of 2010, and 16 million in January.
Over 6 million user reviews were posted on Yelp in 2010. They expect this number to grow to 9 million this year.
While restaurant reviews were the mainstay of their business in the past, they now include shopping reviews for all kinds of products and across all budget categories. As of now restaurant reviews continue to be an important part, generating 25% of the business, shopping reviews have become equally important and generate another 25% of the business. Other important sectors of the business are local entertainment, services and health and beauty, each of which contributes 10%.
Local subscriptions account for the major part of Yelp’s revenue. Each business pays them between $300 to $1,000 per month. Advertising and daily deals sectors have also become strong revenue generators. Their main competitors, Google focus solely on raising revenues through advertising. Others such as Groupon, Facebook and Foursquare focus more on earning revenue by providing deals.
Vlado, Yelp’s CFO, denied that the changes that had recently been incorporated into Google Places had had any significant impact on Yelp. It is, however, possible that the local sales divisions of Google, Groupon and LivingSocial may give Yelp a run for its money in future as they continue to solidify their respective positions in the reviews market.