News that consumer review website Yelp may be for sale saw the value of its publicly traded shares immediately jump 13 percent and the current price is up about 16 percent. The stock is up three percent so far just today.
The Wall Street Journal reports that, although the idea of a sale is simply under consideration, excitement around the prospect is high. Executives from Yelp have met in recent weeks with possible buyers and investment bankers, it says.
Although the current value of the company is $2.9 billion, any potential sale could be as high as $3.5 billion. Company revenue comes mostly from advertising and businesses paying to enhance their pages on the site.
As high-flying as the stock is now, it has been higher. It was only last March that it reached $97. Since that peak, a number of lawsuits have tarnished the company’s image. One recent decision ruled in Yelp’s favor, that it was not guilty of defrauding investors about a sale of stock that was artificially inflated.
The list of possible suitors is, of course, limited to those with the necessary cash. Google could do it, but that company took ownership of Yelp competitor Zagat in 2011, which could be ruled a conflict of interest. In addition, Yelp has blamed Google for altering its search results in favor the pages of Zagat and others over Yelp’s.
Priceline Group is flush with cash, but it purchased OpenTable in 2014. A merger of Yelp and OpenTable is not out of the question, however, as OpenTable is mostly about reservations, so a joining of the two could seem natural.
Facebook could do it, certainly could afford to it, and would fit with its apparent desire to dominate all it can on the internet. Apple, too is flush with cash, with $178 billion just sitting around in various bank accounts. Late in 2013 it filed for a patent for a system around restaurant reservations and ordering, signaling its interest in the market.
Amazon has already done forays into the world of food (restaurant reviews dominate Yelp), experimenting with AmazonFresh and a food delivery application in Seattle. The company’s main site is heavy on consumer reviews so a marriage with Yelp could make sense.
