Why did Yelp turn down a $550 million + Google Deal?

By Chris in Website News


Last week various news and startup blogs were speculating about the news of yet another possible Google acquisition – This time of Yelp, the local review site which it turns out, has turned down an offer of $550 million plus earnouts according to TechCrunch at the last minute of signing a deal.

Why would CEO of Yelp Jeremy Stoppleman drop the deal, especially this late in the game after what must have been months of talks between them and Google. I’m sure the details will surface, but until then here are some thoughts which I find interesting:

-Google were about to offer nearly half a billion to be able to take over Yelp and most probably integrate this data into their SERPS. This would have been their second biggest acquisition after YouTube.

-Yelp must have either had a moment of clarity (maybe under valued their business or saw implications which they didn’t want),  had a counter offer from another party (other search engine or social network), wanted a PR stunt to boost their visibility, or wanted to see how much Google valued their turf?

To me this says a lot about where Google wants to be, and how it will want to differentiate itself from its competitors. From a data centric perspective, being able to get real world feedback on offline business brings them one more facet of information which they can use to bring the best search experience. By integrating offline shopping, entertainment and restaurant information / reviews they would have seriously boosted the reach of Google Local, and grabbed even more online real estate.

There are still many areas including local which Google and the other search engines would like to be involved with including social networks, real time social search, mobile, cashback and loyalty shopping, voucher codes, travel, finance and I think it is simply a matter of time until the likes of Bing, Yahoo, Google and Facebook, Twitter all try and integrate into these areas one way or another.

What we have seen in the past, and is still true today is that Google is very much interested in not only being a search engine sending users to their destination, but they want to be the destination too. Actually, they want to be with you throughout the journey from the browser to the call!

With Yelp turning down this deal, we should all keep an eye on whats happening in the local space – Should make for interesting viewing in the next couple weeks or months!

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