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Google reportedly near deal to buy Yelp

INTERNET

Analysts said Google is probably interested in Yelp's sales force, which operates in 30 markets and knows how to sell to local advertisers.

December 19, 2009|By Dan Fost

Google Inc. is reportedly in talks to buy Yelp Inc., whose website enables users to review restaurants and other businesses -- a possible sign that the search giant is ready to train its computing power on the local advertising market.

The website TechCrunch, citing anonymous sources, said Friday that the two companies were close to a deal and that the price could be in the neighborhood of $500 million. Both companies declined to comment.

Analysts said Google -- which acquired AdMob Inc., a developer of mobile ad technologies, last month for $750 million in stock -- is probably interested in Yelp's sales force, which operates in 30 markets and knows how to sell to local advertisers.

"This would be the closest Google has gotten to buying a 'sales force' with a meaningful 'on the ground' presence in the form of local editorial people in market and telephone salespeople," Greg Sterling wrote on the Search Engine Land website.

Although Yelp has occasionally incurred the wrath of local business owners -- over negative reviews posted on its site and over its aggressive sales tactics -- most of the company's revenue comes from selling ads to such businesses.

Yelp says it works hard to serve businesses fairly. It also said it has empowered thousands of people to review restaurants, dentists, retail shops and scores of other businesses.

Yelp, which is based San Francisco, was founded in 2004 by Jeremy Stoppelman and Russel Simmons, both former employees of PayPal, who started with a $1-million investment from PayPal co-founder Max Levchin. It has since raised an additional $30 million from venture firms, according to Bloomberg News.

Yelp says that it has more than 8 million reviews on its site, and that more than 26 million people visited the site in November.

business@latimes.com

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