If Google's rumored $500 million+ acquisition of local review site Yelp goes through, the deal could open one of the few segments of the search advertising market that has eluded Google: local mom-and-pop businesses such as dry cleaners or dentists or restaurants, which according to BIA/Kelsey, is a $29 billion untapped market. (via the New York Times).
It would also provide advertisers with a wealth of new data about local markets - as well as new tools for mobile search and display ads. The deal is by no means certain; in fact with its news made public participants reportedly fear that competitors may offer a higher bid for Yelp - a testament to the huge importance local business data has to the online search and ad community.
Structured Data
The local and hyper local market has been vastly underserved by search engines, which has eluded their crawling and indexing processes, according to Adam Bunn, head of SEO at Greenlight. Yelp contains hundreds of thousands of reviews on local businesses and services, covering hundreds of towns and cities and pretty much every vertical you can imagine, he said.
Its acquisition would give "direct access to structured data allowing them to reliably and accurately incorporate that data into their search results."
Passionate Community
Thus far, Google has been primarily aggregating user reviews of local businesses from around the Web, according to the E-Commerce Times. "They allow users to write their own reviews, but it is not a prominent feature," David Erickson, director of e-strategy at Tunheim Partners, said.
"Acquiring Yelp will bolster their local business reviews by harnessing a passionate community - that is Yelp's sole purpose, after all - and a great deal of data that will give them a better indication, based on aggregate user reviews, of what is more quality "content."
Founded in 2004 by two PayPal veterans, Jeremy Stoppelman and Russel Simmons, Yelp has made its mark with its market-by-market reach - and a sales team that knocks on local businesses' doors, something that even Google doesn’t do (via the New York Times). Its ad model includes selling sponsorships to businesses - for $300 to $1,000 per month ads appear atop search results and on profile pages of competitors.
Businesses can also prevent competitors from advertising on their own pages. The company has raised $31 million in venture capital and is on track to bring in about $30 million in revenue this year.
Mobile Search
One of Yelp's more interesting offerings is an augmented reality feature called 'Monocle', according to according to John Havens, VP of social media at Porter Novelli (via TechNewsWorld).
"Augmented reality is going to be a very powerful tool," he said, noting that it is part of Microsoft's recently released Bing Maps beta. "Right now, Yelp has a tool called 'Monocle' - a user holds up a phone using the app and pans it from left to right. Let's say you are in San Francisco and want to find a coffee shop. You start panning the phone around, and you can see the icons for coffee shops, along with consumers' comments about each shop."
Such apps will have significant ramifications for commerce when they go mainstream, Havens added. "Stores will be able to tweet, for example, about products and services they are offering passersby."
