Over the past few weeks, my friend has been telling me about this great company that is quickly making itself known in the Internet space. Up until today, I had never attempted to access it. I took time today to go this companies website, yelp.com. Within a few seconds, I had found several Mexican restaurants within walking distance, and after reading a few reviews, I was headed for Chipotle. After enjoying my 3000-calorie afternoon snack, I ventured to the Android Market and downloaded the Yelp app. With that, I will begin my dissection of this promising specimen.
The first browse through the app was pleasant, search results were returned quickly and large images and text made for an easy read. I was not prepared, however, for The Monocle. Moments after clicking this enigmatic icon, I was amazed to see that my 3.5 inch high resolution, capacitive touch screen was transformed into a “heads up display.” In this interface, each restaurant was tagged through GPS with its direction and distance. After picking my jaw up off of the floor, I turned my attention to the meat of the application, the reviews. This app balances its flashy features with helpful information about any given restaurant. This is a lifesaver for me. Now I will be able to read reviews and make prudent choices, instead of going with my gut feeling, bad pun intended.
Though I am one, you don’t have to be a rocket scientist to see the potential in Yelp. Synthesis with Facebook would be inevitable, provided that the social media consumer uses this company to have a dialogue about any given restaurant or hang out spot. The information that Yelp provides could also be integrated with Google Maps to give the user suggestions, reviews, and directions all on one platform. This would be mutually beneficial to both Google and Yelp because Yelp would be showing its big, beautiful face on every Google search, and Google would be able to have reliable reviews to replace the atrocities that it currently provides.
Looking at the numbers, we’ve seen a lot of volatility with this stock over the past few months. Yelp will release its first earnings report since its IPO on Wednesday after the closing bell. In 2010, Yelp users added 6 million reviews to the website. By the end of 2011, there were over 25 million reviews available. If this growth continues at anywhere close to that scale, then I want my money to be in this stock. Whether it trades up or down, there is plenty of investment opportunity. If the numbers miss but the user growth is still impressive, this would foreshadow future earnings potential. This might be a great chance to get on-board with this company and make money as it matures. In the long term, growth will be seen as more people discover and use the practical information that Yelp offers. There is also a very real possibility that this company could start providing reviews of hotels, travel destinations, and other services. This would allows them to become competitors with sites like TripAdvisor and Angie’s List. The real game-changer with this company, however, involves Mr. Zuckerberg and his big, bad, billion dollar billfold (That probably has “Bad Motherzucker” stitched in the leather). Undoubtedly, Yelp’s integration with Facebook would drive the stock price through the roof. As many investors have painfully learned over the last few years, ignoring the growth of tech companies is just plain stupid.
Posted on May 1, 2012 by