Notes from Yelp’s S-1 IPO Filing
Some quick thoughts after skimming Yelp's S-1. Read it in the raw here.
- 22M reviews of 19M businesses, averaging 100 words per review.
- 529k businesses have "claimed" their page.
- 19k local businesses pay for advertising, spending an average of $234/mo.
- Yelp made $40M in local advertising revenue so far this year, and $58M overall.
- That said, Yelp lost $7.6M in revenue so far this year, mostly due to spending $38.5M on sales & marketing.
- Yelp admits that a substantial amount of their traffic comes from search engines, with Google representing 50% of that traffic, and if they were to lose their rank in unpaid search results, they are screwed. I mean, it would have a "substantial negative effect."
- The top categories for reviews are "Shopping" and "Restaurants", each representing 23% of all reviews. I'm surprised, as I've never looked at a "Shopping" review. I would have guessed "Restaurants" would be 50%.
The biggest takeaway here is that Yelp is actually have a HUGE problem getting businesses to engage with them. Only 2.78% of businesses have claimed their Yelp page, and only 0.1% of businesses are advertisers. That's despite what you'd imagine to be a strong brand that a lot of people know. I wonder how Foursquare feels…