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Yelp Surges to Record Amid Local Ad Gains: San Francisco Mover

Yelp Inc. (YELP), owner of a website that
lets consumers review local businesses, surged to a record high
after second-quarter revenue and a sales forecast for the
current period beat estimates, buoyed by local advertising.

Second-quarter sales climbed 69 percent to $55 million, the
San Francisco-based company said yesterday in a statement,
topping the $53.3 million average analyst prediction compiled by
Bloomberg. The stock gained 23 percent.

Chief Executive Officer Jeremy Stoppelman is banking on
partnerships with companies such as reservation site OpenTable
Inc. (OPEN)
, food-delivery site Eat24 Hours LLC and iPhone maker Apple
Inc. (AAPL)
to get consumers spending more time on Yelp. Increasing
user engagement can help the company attract more advertising
from local businesses, which jumped 77 percent to $44.8 million
— or 81 percent of total revenue — in the second quarter.

“We’re increasingly positive on Yelp’s efforts to close
the loop and drive transactions on the site,” Kaizad Gotla, an
analyst at JPMorgan Chase Co. in New York, wrote in a report
earlier this week. He has a neutral rating on Yelp.

Yelp shares advanced to $51.50 at the close in New York,
and have more than doubled this year.

Sales Forecast

The company’s second-quarter net loss narrowed to $878,000,
or 1 cent a share, from a loss of $2 million, or 3 cents, a year
earlier. Analysts on average had projected a loss of 4 cents in
the recent quarter.

Third-quarter revenue will be $58 million to $59 million,
Yelp said. That compares with the average analyst projection of
$57.4 million, according to data compiled by Bloomberg. Annual
sales will be $222 million to $224 million, higher than the
average estimate of $219.8 million.

Total reviews on Yelp’s sites, where consumers rate and
comment on local businesses such as coffee shops, hair salons,
pet shops and plumbers, increased 41 percent in the second
quarter to more than 42.5 million, while average monthly unique
visitors grew 38 percent from a year earlier to about 108
million, Yelp said.

The company expanded search ads to its mobile application
in the fourth quarter and added display ads in the first three
months of 2013. About 59 percent of Yelp searches originated on
mobile, including its app and through the Web, in the second
quarter, compared with 45 percent in the first three months of
the year.

To contact the reporter on this story:
Danielle Kucera in San Francisco at
dkucera6@bloomberg.net

To contact the editor responsible for this story:
Pui-Wing Tam at
ptam13@bloomberg.net

(237)

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