Rumor has it that one of the world’s most popular review sites and customer feedback platforms may soon be up for sale.
According to reports by the Wall Street Journal and Bloomberg, San Francisco-based Yelp is exploring a sale amid slow growth and rising costs. Insider sources claim that Yelp is currently working with the Goldman Sachs Group, Inc. to find a buyer.
If it is indeed up for sale, the company – which Google tried to buy in 2009 (the offer was turned down by CEO Jeremy Stoppelman) – could attract as potential suitors a wide range of high-profile tech companies, including the Priceline Group, Yahoo, Amazon, Apple, and Facebook; Google is still a potential buyer, too. (Will Oremus of Slate has a great piece on how Yelp might fit the needs of each of these suitors.)
Industry observers believe that the sale could fetch more than $3.5 billion.
(Business owner? Here’s how to claim your Yelp page.)
Representatives from both Yelp and Goldman Sachs have declined to comment, but analysts point to Yelp’s struggles to improve earnings growth as one of the main reasons why it might soon be up for sale.
“While we cannot at this time confirm the veracity of this report, this potential event does underscore what investors have been thinking on Yelp shares since day one,” said Credit Suisse analyst Stephen Ju in a MarketWatch report.
Impact on customer feedback and review sites?
Meanwhile, George Embiricos of Food Republic wonders how a potential Yelp sale could affect the future of review sites and public customer feedback platforms in general.
“Consolidation of ownership among a few large-scale companies appears somewhat plausible, considering Google’s purchase of Zagat in 2011, Priceline Group’s acquisition of OpenTable last year and TripAdvisor’s purchase of five new restaurant sites over the past year,” Embiricos wrote. “But can user-generated-content sites remain profitable and sustain success after being reformatted as part of these larger companies? Only time will tell.”
Added the Wall Street Journal in its report:
Even as it struggles with growth, Yelp could be attractive to a wide range of buyers beyond online review rivals. A deep base of reviews can be a valuable asset because they take time to amass. Reviews are magnets for smartphone users, valuable for companies seeking mobile growth. Also, a website with a loyal following entices more users to visit the site directly, allowing its owner to avoid paying for search engine advertising.
Yelp launched its initial public offering in 2012. Since being founded in 2004, the site has collected over 77 million local business reviews. Yelp is also currently averaging approximately 142 million unique monthly visitors in 2015.