From the Blogosphere
Did Yelp Catch The First Anti- Google Wave?
Yelp’s window stickers tell a tale of building local merchant trust and a lot of grunt work by “boots on the ground"
By: Wilson Kerr
Jan. 13, 2010 11:15 PM
Location Based Services on Ulitzer - On December 21st, as we all got ready for the 2009 Holiday “unplug”, it was reported that local business rating and review information aggregator Yelp rejected a hefty $500+Million takeover offer from Google. Bold move, but why did they walk away? No one seems to be certain.
Yelp’s window stickers tell a tale of building local merchant trust and a lot of grunt work by “boots on the ground”. By this I mean the literal and figurative wearing out of shoe leather for the purpose of winning over single-door business owners one by one. Explaining the power of Location-Based advertising and the impact of having real people maintain a fresh and vibrant listing infused with reviews, offers, specials, and the “inside scoop” is something best done live and in-person. This crucial element of Local Search is hard to scale and an expensive proposition, even for Google.
Google is the powerhouse leader in the race for infusing local business information into maps and they seem to be rolling out new programs on a weekly basis. Google’s Favorite Places Program attempts to add a powerful subjective element to their local search listings.
By the way, I recently blogged about Google’s Favorite Places as a new program, but was in San Francisco last week and spotted a real, life-sized Google “map blob” on the sidewalk! A pic I took last week is below. It was dusty and looked to have been there for some time, so I asked the business owner and it seems the true launch of Google Favorite Places was back in July! Was I the only one to miss this? Google tapped minor local celebrities and had them name their favorite places. Google then delivered giant “map blobs” to the selected businesses, with window stickers! Watch hotshot SF Mayor Gavin Newsom help Google kick-off this new program in this short video clip. Watch a video of the entire Google Favorite Places July SF love fest here.
Google is a giant looming ever-larger and their complete dominance might seem inevitable. Their stock was up 85% in 2009. Many local businesses do sign up with the Google Local Business Center and Google is pushing their 2-D QR code door sticker “scan for offers and info” angle aggressively.
That said, it seems Yelp has created a following with enough momentum that Google would rather buy vs build this hyper-local connection. Surely a big factor is the time and cost of collecting this information and scaling it on a national/global level. But why has Google failed to connect with local businesses the same way Yelp has? While tens of thousands of nationally-branded restaurants, for example, could be added with single ad deal, both Google and Yelp know that the real proof in the pudding for Local Search power is the subjective, variable, time-sensitive attribution that comes from trusted like-minded consumers promoting small joints that “only the locals know”. A Taco Bell is a Taco Bell the world over.
The Google “Don’t Be Evil” mantra is harder to maintain when they seem on the verge of dominating nearly every aspect of our mobile/LBS lives and positioning themselves as a “must-do” solution for local businesses. Could Google be growing so big and so powerful that simply Being Google Is Evil?
So, why did Yelp walk away from a cool half billion? It could be that they are in secret negotiations with another player. It could be because they think Google will come back with more money. It could be because of many reasons. But perhaps it is because they realize they are riding the first wave of an anti-Google movement and want to see where this wave is headed. There might be a lot of upside for those offering an effective alternative.
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