UPDATE 2-Yelp posts bigger-than-expected loss; shares down
* Fourth-quarter loss/shr $0.08 vs est loss/shr $0.05
* Revenue up 65 pct at $41.2 mln vs est $40.3 mln
* Shares down 6 percent after market
* Expects 1st-qtr revenue $44 mln-$44.5 mln vs est $43.8 mln
(Adds CEO comments from conference call)
By Chandni Doulatramani
Feb 6 (Reuters) – Yelp Inc posted a
bigger-than-expected quarterly loss and its shares fell 6
percent in after-market trading as the consumer review website
faces competition from Facebook Inc.
Facebook last month unveiled a new feature called “graph
search” that lets its users to trawl their network of friends to
find everything from restaurants to movie recommendations,
bringing it into direct competition with Yelp.
“That’s a big negative … Facebook has the opportunity to
replicate a lot of these smaller network players like Yelp
pretty easily over a much larger audience,” National Alliance
Securities analyst Mike Hickey told Reuters.
Yelp’s mobile app makes it easier for people to discover
local businesses. It combines Yelp’s reviews and other relevant
information with knowledge of the consumer’s location. It also
allows consumers to “check-in” at local businesses.
However, Yelp Chief Executive Jeremy Stoppelman brushed
aside the competitive threat.
“I don’t think anyone, certainly not overnight, is going to
impact the business,” Stoppelman said on a conference call with
analysts.
Yelp’s shares fell 6 percent on Jan. 15, when Facebook
launched its “graph search” feature.
The company’s net loss narrowed to $5.31 million, or 8 cents
per share, in the fourth quarter from $9.1 million, or 56 cents
per share, a year earlier.
Analysts had expected a loss of 5 cents per share, according
to Thomson Reuters I/BE/S.
The company, which went public in March last year, was
founded by former PayPal engineers Jeremy Stoppelman and Russel
Simmons as a start-up idea in a business incubator in 2004.
For the current quarter, it expects revenue in the range of
$44 million to $44.5 million, above the average analyst
expectation of $43.8 million.
Yelp shares, which have gained about 11 percent in the last
three months, were down at $21 in after-market trading. They
closed at $22.38 on the New York Stock Exchange.
(Reporting by Chandni Doulatramani in Bangalore; Editing by
Maju Samuel)
