Yelp, because of its stock price drop and being down about 45 percent from its 52-week high of $98.04. are now easier targets for a takeover by Google, Yahoo, and Facebook in order to get a piece of the $75 Billion local advertising spending that is slowly moving away from traditional sources and into online mediums.
Buying Yelp would help larger technology providers gain a stronger presence in local advertising as about $75 billion in spending that had been earmarked for traditional platforms comes up for grabs over the next five years, said Sameet Sinha, a San Francisco-based analyst at B. Riley. “Local advertising is a nut that nobody has been able to crack,” Sinha said in a phone interview. “But now I think there’s actually an imperative to crack that nut. And Yelp is a premium property there. It is well-known, well-regarded among most consumers.”
Another company that can try and acquire Yelp is EBay. Because for Ebay, Yelp offers the local business relationships and mobile-user base needed to draw more consumers to its pay-by-smartphone platform.
According to industry experts and analysts like Kerry Rice of Needham & Co., “Yelp’s revenue multiple is still more than double the median for U.S.-based Internet media and services companies valued at more than $1 billion, according to data compiled by Bloomberg. Any buyer may have to offer more than the company’s March high, at least an 81 percent premium, to get a deal done.” “I don’t think there’s any reason for them to have to sell the company,” the San Francisco-based analyst said in a phone interview. “Unless it’s a very attractive offer, I don’t think it would be consummated.”
We all love and use Yelp, to check for reviews or restaurants, look at pictures of their food, and just to see what other customers are saying. Reviews are all the rage these days and we tend to make our own decisions on where to go and what to do based on Yelp’s reviews. So can yelp now become part of Ebay, or Yahoo, or even maybe it will be changed to Google Views or Google Reviews? We will just have to wait and see, and until then we will be Yelping away wherever we go.
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