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Google Trumps Yelp In Local Business Searches

Google Maps benefited from coming pre-installed on Apple iPhones from 2007 through 2012, but it's been replaced by Apple Maps, which uses Yelp data....

Google Maps benefited from coming pre-installed on Apple iPhones from 2007 through 2012, but it’s been replaced by Apple Maps, which uses Yelp data…. View Enlarged Image

More consumers are turning to Google Maps than to Yelp for local business information, yet another sign that the search engine’s mapping data will be the key to winning on mobile ads.

Google (GOOG) is the first choice for about 35% of users, according to a survey released Thursday by Cowen Co. analyst Kevin Kopelman. That trumps second-place Yelp’s (YELP) 16%.

That’s important, because the search giant is betting that its investment in mapping and location data will pay off as it navigates toward being a mobile-ad-focused business, says Global Equities analyst Trip Chowdhry.

“Google Maps is now a very strong platform for almost every activity,” Chowdhry said. “You can now use it to write geo-targeted applications, do geo-targeted ads and social networking based on location.”

Maps Key To Mobile

The more users Google can attract by building apps based on its location-based software, the more highly targeted — and valuable — ads it can eventually serve them. Because location is so vital to success on mobile devices, Google Maps might be as important on mobile as Google Search has been on the desktop, says Chowdhry.

Yelp has long been seen as a front-runner in local ads, though it’s been held back because it does not advertise, wrote analyst Kopelman, who nonetheless rates the stock as outperform, or buy.

That lack of awareness is one of its weaknesses vs. Google. While 98% of surveyed users had at least heard of Google Maps, only 65% had heard of Yelp.

Google Maps benefited from coming pre-installed on Apple (AAPL) iPhones from 2007 through 2012, but it’s been replaced by Apple Maps, which uses Yelp data.

But analysts see Google taking steps to try to sideline those rivals, as well as smaller local-business search firms such as TripAdvisor (TRIP), Groupon (GRPN) and Angie’s List (ANGI).

Each of those earned just 3% of users in Cowen’s survey.

Google earlier this month bought Waze, an Israeli mapping program that adds crowd-sourced traffic information. It reportedly beat out Facebook (FB), which also is trying to find ways to monetize its fast-growing mobile users.

Google Favors Google

When Google this month altered the way local search results are displayed on mobile and desktop, the search engine started favoring its own local business data vs. Yelp’s, according to Macquarie Research analyst Ben Schachter.

Before that change, “more than half” of Yelp’s 100 million monthly visitors were Google referrals, but that could drop off because Google has prioritized its own maps and data, Schachter says.

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