Five Quick Thoughts (and some questions) on the Google / Yelp Rumors

I'm a long time competitor and admirer of Yelp.  They've done so many things right where others have failed, and have moved the consumer review space forward more than any other company besides Amazon.

Here are my quick thoughts on the rumored Google acquisition of Yelp.

- As an entrepreneur, I'm sorry to see Yelp sell out.  As a competitor to Yelp, I'm thrilled.  If past acquisitions are any indication, it won't be long before the visionaries leave, and Yelp becomes a feature and not the vibrant community with a cult following that it is today.  See Epinions.

- Google could have used a brute force / thuggish approach to bring the acquisition price down like MySpace did with Photobucket a few years back.  MySpace broke PhotoBucket's widgets during negotiations as a show of force - Google certainly could have quietly made Yelp content slide down a bit in the organic search rankings.  I'm happy they didn't go this route.

- This is a decisive signal that Google is indeed looking to be more of a destination, and not just a middleman.  I find this scary.

- GigaOM's theory that this is somehow an admission by Yelp that they have somehow been circumnavigated by lightweight mobile services like Twitter + Foursquare is offbase IMHO.  Yelp has a million downloads of their mobile app.  Most people don't have enough friends online creating content for a friend only approach to be a viable, mainstream competitor to a service like Yelp.

- If this sale does go through, it is certainly an admission by Yelp's leadership that getting to IPO was likely to be difficult.  Gravity was against them.  And by gravity, I mean Google - continuing to own search and 97% of all website referrals, flooding local merchants with their own stickers, dropping huge plastic pins all over cities, and increasingly looking to be a destination.  I'd also heard rumors that Yelp was having a tough time getting profitable - big, direct salesforces aren't cheap.  The economics of this model will work better across the combined local inventory of Google and Yelp.  Again, I truly believe that Google could have destroyed Yelp, could have broken their backs by cutting off their search referral oxygen, and then picked up the pieces at firesale prices.  That they chose not do this reinforces my belief that Big G really does prefer to see itself as a guardian of the web, and not a destroyer.

- Some questions: will Yelp content be integrated into Google's local pages or will the property be left alone?  How will this affect Yelp's already dominant organic search rankings?  How will Yelp's outspoken community react to the new overlords?  Will Google be able to retain Jeremy, Russ, Nish, and the rest of the Yelp team, or will they bounce to new startups in two years?

Related articles by Zemanta

• Google May Buy Yelp: A Quick Analysis (gigaom.com)
• Google Reportedly Deep in Talks to Buy Yelp [Unconfirmed] (gizmodo.com)
• Twitter + Foursquare = Yelp R.I.P? (gigaom.com)

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