Rumor: Google close to acquiring Yelp
It seems Google is on another spending spree, and its next target is Yelp.
A few months ago Google dropped $750 million to acquire mobile ad network AdMob, and according to news coming from TechCrunch, now it is looking to drop at least $500 million for the social recommendation site Yelp.
Yelp was founded in 2004 by two veterans of PayPal, Jeremy Stoppelman and Russel Simmons, as a site where people could rate and review local businesses. The company has raised a total of $31 million in venture capital over four funding rounds, and looks set to gross $30 million this year from ad sales with a projection of $50 million for next year.
The company has become quite popular over its five years, but it hasn’t been without controversy. Since August 2008 there have been accusations of Yelp employees calling businesses with bad reviews and offering to push them further down the page for a fee. The story continued into 2009, but has seemed to die down this year as the founders denied this practice, but the stigma seems to have stayed in some users minds.
What is puzzling about Google looking at this company now is that it recently launched a similar service on Google Maps called “Places.” Many people saw this as a potential Yelp-killer, so why the sudden interest in purchasing a service that it appeared you were about to kill off? Perhaps Places was a scare tactic, or maybe the service isn’t seeing the success Google wanted, who knows.
The negotiations are not completed yet, and according to The New York Times, there is some fear they may be in danger now since this information has leaked. It is known that Google has wanted to add Yelp to its portfolio for some time, and these talks are about two months old now, so it seems doubtful that they will just fall apart.
This would make the second big acquisition for Google in a short period, are more on the way?
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