$100 million is less than I would have expected.
They want to raise $100M. They are seeking a valuation of $1 - 2B.
Ah, thanks for the clarification. That makes a lot more sense. (I should have RTFA more carefully.)
Yelp Files For $100 Million IPO
31–40 of 63 posts
Re: Yelp Files For $100 Million IPO
#32Yelp is an awesome service, but I am surprised to see that they are still not profitable. Considering an annual revenue run rate of approx. $70m, I am wondering what costs them $70m a year to run the site - with most online businesses salaries and marketing are the biggest expenses and considering Yelp's amazing organic rankings, I doubt they are buying a lot of traffic. Any idea what the other big costs are? Sales t…
Probably paying people to go out and try places to review. Organic traffic (and ad revenue) comes from having content, so it's a good investment.
I doubt they would pay people to review, unless it's a well kept secret. What they do have are Community Managers. They are located in each major city prompting Yelp, providing support for the yelpers in that city and so on. They probably spend a lot on their sales team as well.
Re: Yelp Files For $100 Million IPO
#33Re: Yelp Files For $100 Million IPO
#34Earlier quoted context omitted.
I'd rather see Zagat succeed than Yelp.
Why?
I've never once encountered a Zagat-related complaint. They seem to have high standards and their ratings have been trustworthy for me for years. Yelp on the other hand.. it's just a big yellowpages where even my own reviews go missing time to time.
Re: Yelp Files For $100 Million IPO
#35Why are all these recent tech companies that have gone through an IPO not able to turn a profit? Groupon, Pandora, LinkedIn, and now Yelp are all valued so highly yet they are not making money off of their services. If you have been in business for over 5 years and don't make a profit when are you expecting to?
It makes no sense to shoot for profitability when you are growing rapidly. Yelp has only just started expanding outside the US. It's cash is much better spent on growth than sitting in the bank.
Re: Yelp Files For $100 Million IPO
#36Yelp seems like another business that would have worked much better for the users as a nonprofit ala craigslist (I know craigslist isn't a nonprofit but it's more or less run as one.) See the sporadic bursts of drama about businesses being forced to buy ads on yelp to influence reviews [1:3]. You have to wonder what they're going to do to get enough revenue to support their desired $1-$2B valuation. [1] http://www.cb…
But you're forgetting that this time it's different. With social networks, you don't need a business model. Because of the network effects, and increasing number of mobile devices, they will be able to leverage the cloud and produce real-time location-based analytics. So, as you see, Yelp doesn't require a conventional business model to have a multi-billion dollar valuation.
Re: Yelp Files For $100 Million IPO
#37Yelp is an awesome service, but I am surprised to see that they are still not profitable. Considering an annual revenue run rate of approx. $70m, I am wondering what costs them $70m a year to run the site - with most online businesses salaries and marketing are the biggest expenses and considering Yelp's amazing organic rankings, I doubt they are buying a lot of traffic. Any idea what the other big costs are? Sales t…
Probably paying people to go out and try places to review. Organic traffic (and ad revenue) comes from having content, so it's a good investment.
I highly doubt Yelp pays people to review...anymore. They did when they first launched (they've admitted to this), but with their brand recognition now, paying people to review would be a giant waste of money. That being said, they haven't reached profitability yet, so who knows, maybe they are making this bad decision.
Re: Yelp Files For $100 Million IPO
#38Yelp's motto: 'Let's legalize extortion!' Built a review site? Fine, but leave the reviews alone. All of them. No, it is not "OK" to close users' accounts with no warning, thereby demolishing all of their reviews. No, it's not OK to "hide" some reviews or to take down reviews when your blackmail tactics actually work. No, Yelp: it's not acceptable to solicit and harass people and businesses who have explicitly posted…
I am with you on that one... Extortion and abusing small business is their core business.
Re: Yelp Files For $100 Million IPO
#39Why are all these recent tech companies that have gone through an IPO not able to turn a profit? Groupon, Pandora, LinkedIn, and now Yelp are all valued so highly yet they are not making money off of their services. If you have been in business for over 5 years and don't make a profit when are you expecting to?
It makes no sense to shoot for profitability when you are growing rapidly. Yelp has only just started expanding outside the US. It's cash is much better spent on growth than sitting in the bank.
Amazon did the same thing, if you remember their end of Q3 statement -- instead of profit, they re-invested in themselves (probably Kindle related purchases to have a bigger Q4).
Re: Yelp Files For $100 Million IPO
#40Yelp's motto: 'Let's legalize extortion!' Built a review site? Fine, but leave the reviews alone. All of them. No, it is not "OK" to close users' accounts with no warning, thereby demolishing all of their reviews. No, it's not OK to "hide" some reviews or to take down reviews when your blackmail tactics actually work. No, Yelp: it's not acceptable to solicit and harass people and businesses who have explicitly posted…
If these businesses learn anything (Yelp and Groupon I'm looking at you!), it should be that quickly growing a sales force that is paid on incentives is difficult and should be closely managed.
Otherwise the newly minted hundred(s) person salesforce, most whom have less than 1 year with the company, will sacrifice the long term success of the business for the short term success of commissions. Translation: cut ethical corners.
I cannot even imagine how difficult it is to recruit, lead, and manage a salesforce of hundreds of people that are all brought together in a period of months.