Online local marketplace Yelp (YELP) has done surprisingly well in the last one year. The organization's key metrics have enhanced quickly, and its focus on mobile moves should help it sustain the outstanding performance going ahead. Be that as it may, Yelp has raised a worry over the way Google (GOOG) (GOOGL) lists search results, offering inclination to it services. Will this damage Yelp's future growth significantly, or should investors disregard this worry given the moves that Yelp is making in mobile market segment?
A glance at Yelp's item advancement indicates that the organization is steadily getting to be more focused. It is attempting to convey a finer web experience to users, and included another feature, using which users can upload photos to Yelp by means of mobile web.
The organization is experiencing strong engagement in reviews, determined by the investment it has made over the past few years. Truth be told, administration credited Yelp's solid first-quarter performance to higher revenue from nearby advertising on cell phones. Its mobile application combines reviews and other pertinent data with learning of the consumer's area, which allows them to check in at nearby businesses.
As indicated by Yelp, 35% of new reviews originated from cell phones in the first quarter, alongside 60% of all searches. The organization also improved its business listing page by magnifying the number and size of photos. It enhanced review highlights to focus on the data that consumers will discover useful. Yelp is obviously attempting to increase organic traffic and enhance its mobile business, on the back of such moves.
These numbers obviously reflect the solid progress that Yelp is making. The organization saw 132 million visitors who came to Yelp on a month to month average basis amid the first quarter, demonstrating the strength of its user base. Active local business accounts also increased an impressive 65% year over year to 74,000.
Management says that the Yelp brand is getting to be synonymous with local search. Yelp has also tied up with different players to amplify its presence. Case in point, it is fueling Bing local search and Apple Maps, and has integrated its services into several automobile navigation systems. It as of late advertised plans to join forces with Yahoo! and Yp.com.
Yelp is attempting to improve the situation for advertisers greatly, and it has delivered products to address this range. Last year, it had dispatched another item, "Call to Action," which has picked up prominence with both advertisers and consumers. It's been just a year since Yelp dispatched this feature, and it is now creating around 100,000 leads for advertisers consistently.
The organization is continuously focused on adding more features to its service so as to draw in more advertisers. In the wake of securing Qype last year and integrating it into its platform, Yelp saw a solid increase in the amount of contributors. The organization has also extended its system to Mexico and Japan. By and large, its international traffic increased by a whopping 95% last quarter, and it expects the momentum to sustain.
The organization is bit by bit attempting to diminish its dependence on Google by making its own particular site characteristic rich and aggressively advertising its portable apps.
The Google risk
On the other hand, in case if Google is indeed changing search results to support its Google+ and Google Places services, then Yelp may be in for some short-term torment. As per Techcrunch, released documents from Yelp claim that Google is "blatantly highlighting its own products in searches made in the U.S., but not in Europe to avoid angering EU regulators who are reviewing Google antitrust complaints."
A comparison between the growth in the amount of business with reviews on Yelp and Google indicates that the search monster is cutting it close. This is a matter of concern going forward, as Yelp will need to keep developing and pushing its services aggressively to increase its lead over Google.
Yelp has done extremely well so far despite rivalry from bigwigs such as Google. The organization's key metrics such as active local business accounts and mobile views are increasing at a solid pace, and it also increased its revenue forecast. Looking ahead, the organization is expected to sustain the momentum in its business as analysts anticipate that its bottom line will increase at a CAGR of 72% during the next five years, making Yelp a luring growth pick.