About two months ago, when Yelp turned down an offer from Google, there had been speculation that Yelp had received a counter offer from Microsoft.
It now turns out that the speculations were true. Peter Burrows at BusinessWeek reported that Microsoft had made Yelp an offer of over $700 million, while the original offer they had received from Google had been in the region of $550 million.
To everyone’s surprise, Yelp, which hosts reviews of local businesses, has gone ahead and rejected the offer from Microsoft as well!
Instead, the company has accepted an investment of $100 million from Elevation Partners, which values the company at just $475 million.
On being questioned about this decision, Yelp CEO, Jeremy Stoppelman told Peter Burrows, “Yelp has the chance to become one of the great internet brands… That for me is the chance of a lifetime.”
Critics and supporters are shocked at the decision. Most believe that this was a colossal mistake, and while Yelp might be doing well right now, they are more than likely at the pinnacle of their success.
Google and Microsoft could very easily build such technology and both are sitting on enough cash to be able to even pay real users to post reviews on their services instead of Yelp.
Only time will tell, though, whether Stoppelman’s hopes will come true and the risk he has taken will be worth it or not.