Yelp's Smart Strategies Can Take the Stock Higher

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Dec 01, 2014

Yelp (YELP, Financial) targets connecting people with well-established local businesses allowing them to access these unique local reviews in every country in their respective native languages. The Yelp app enables people to translate the reviews to any preferred languages. There’s a large global opportunity with the yelp playbook set to be launched in several new markets.

Making the right moves

Yelp released its unique app in Italy nearly three years ago and recently introduced the same in Hong Kong and Choi. Yelp is currently accessible in 29 countries and in 16 different languages.

In the third quarter of the previous year, Yelp acquired SeatMe and then introduced the Yelp reservations which are free light version of SeatMe aimed at allowing the customers for making online reservations and searching several other restaurants by the category of night life establishments. The new app is exceedingly adopted by the diners and business owners owing to the usage simplicity and diversification of its reservations products portfolio.

Approximately a year earlier, SeatMe had about 200 businesses doing reservation and by the end of the third quarter more than 5,000 businesses were leveraging SeatMe for Yelp reservations.

Yelp continues to develop new features enabling business owners to measure their customer leads with more than 139 million new visitors approaching Yelp for discovering major local businesses. Consumers are able to message more than 100,000 new businesses by utilizing its message-to-business app and deal with nearly 28,000 businesses from wineries to spas to restaurants through the Yelp platform. These product offerings attracted and engaged larger consumers and improved their experience.

The Yelp Foundation is estimated to donate nearly $1 million in the quarter for supporting small business growth and community literacy. Going forward, Yelp targets on supporting major non-profit organizations for the growth of local communities globally.

Claims local businesses reached 1.9 million, an increase of 40% on year-over-year basis. Yelp’s average monthly new visitors expanded 19% on year-over-year basis to approximately 139 million. In addition, average monthly mobile exclusive visitors increased by 46% on year-over-year basis to roughly 73 million.

Seeing good growth

International traffic increased 40% on year-over-year basis to about 30 million fresh monthly visitors on an average. However, the international traffic declined slightly sequentially in third quarter owing to the variable traffic from Google. Live local business accounts expanded 51% on year-over-year basis to about 86,200, including paying customers like businesses that purchase CPC ad and impression supported ad and even SeatMe customers and other businesses selling deals during the quarter.

Leaving deal customers, rest of the dynamic local business account expanded 66% on year-over-year basis.

The advertisers included in dynamic local business accounts comprises of regional and national customers.

Sales headcount for Yelp during the third quarter increased 52% on year-over-year basis. Yelp targets on continuously investing into sales and marketing looking at excellent growth opportunities, going forward. These solid investments are believed to significantly propel company’s growth.

Conclusion

Hence, Yelp is making the right moves by focusing on international growth. This will help the company tap the growing usage of Internet in a number of end markets. Hence, investors should think of buying this stock for long-term gains.