Mobile Application Development - Presentation
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Ten minute company presentation on Yelp.
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Mobile Application Development - Presentation
- 2. What do they do? Publishes crowd sourced reviews about local businesses Restaurants Coffee shops Parks / Hiking trails Dentists / mechanics / bicycle shops
- 3. Financials Source: Google Finance
- 4. Financials (cont.) Source: Google Finance
- 5. What’s hot Strengths Yelp is the place to go for quality reviews Revenue growth Monocle feature
- 6. What’s hot (cont.) Challenges Competition with Google Mobile app adoption and engagement Accusations for unfair ratings Competitors Yelp’s ranking
- 7. Secret sauce Dedicated community of reviewers Pervasive in all major metropolitan areas in U.S. Implementation of a social system Goals Roles Rewards and incentives Norm
- 9. Tell a story Marin Headlands, San Francisco Bay Area
- 10. Competition Google & Zagat OpenTable Seemless
- 11. Personal opinion Yelp will continue to thrive Offers underlying value to consumers It can operate on it’s own, but it’s better off being acquired. Needs a new revenue stream like OpenTable, delivery.
- 12. Q&A
- 13. References http://www.forbes.com/sites/maggiemcgrath/20 14/02/18/yelp-has-five-star-potential-but-a-three-star- rating-so-is-it-worth-your-money/ http://archive.fortune.com/magazines/fortune/f ortune_archive/2007/07/23/100134489/index.htm http://en.wikipedia.org/wiki/Yelp http://finance.google.com
Editor's Notes
- My name is Robert Wang. My unique ID is rswang. I’ll be presenting on Yelp.
- The name "Yelp" comes from a friend of the founders who simply liked the word. But it also serves as a contraction of "yellow pages” Founded in 2004, 10 years ago Headquartered in San Francisco, CA Founded by former PayPal employees: the core of which Jeremy Stoppelman, Rusesel Simmon, and Max Levchin Goal: Capture part of $100 billion that's spent every year on local advertising. Yelp has an active community of reviewers called Yelpers*** who have completed 4.5 million crowd sourced reviews Each month Yelp receives 132 million monthly visitors to it’s website Business are rated on a scale of 1-5 and a has shown that each "star" in a Yelp rating affects the business owner's sales by 5–9 percent.
- How Yelp’s done for it’s shareholders IPO’s in 2012 at $15 per share; currently it’s at ~$57 In the past two years the stock price has appreciated 136.33% Today Yelp is $4.33 billion according to it’s market cap
- This chart is supposed give some idea of revenue vs. profit 2009: $30 million 2013: $232.98 million Over the past five years, on average they had a 50% per year revenue growth For the first time this year, Yelp became profitable Yelp’s current customer base represents less than 0.3% of all U.S. local businesses, a figure that offers significant room for growth. Analyst predict over the next three years, compound revenue growth rate of 48% and an earnings per share growth rate of 65% over the next five years.
- Strengths People go to find new places Like I said before, 50% revenue growth is astonishing Monocle: Augmented reality platform that works on your smartphone by visually superimposing data about business around using your GPS location.
- Challenges Google prioritizes Google reviews over Yelp’s Google’s results gets shown first / users are more likely to click on them This is problem for Yelp because 50% of traffic come by way of Google’s search engine suppress Yelp’s local content Mobile app: weakening in both adoption and engagement of the Yelp mobile app. (1) Unique devices using Yelp, (2) deceleration of clicks to call businesses. Challenge is accusations of unfair ratings Business owners often feel their reviews are unfair, and accuse others of fraudulently writing negative reviews on their own business, or accuse Yelp of manipulating reviews. This accusation is not without merit. A Harvard professor estimated that 20% of reviews are fake reviews. Yelp own review filter identifies 25% of reviews as being suspicious. Yelp uses proprietary a algorithm to evaluate which reviews are authentic and adjusts it’s ranking of search results accordingly Personal feeling is that some of these problems comes with the territory, if people have an incentive to cheat they will. Best you can do is subordinate the likely cheats and elevate the performers
- Community of reviews: Prestige / place to be cool Implement of a social system. These are extremely hard to do right / Some notable exceptions: Amazon and Glassdoor. How do you get people to contribute? Why do they contribute? What happens when a norm is broken? How does one design an interface that supports various stakeholders goals? I believe Yelp’s ability to create an dynamic community represents, in Warren Buffet’s words an economic moat. An economic moat is a business' ability to maintain competitive advantage over its competitors in order to protect its long-term profits and market share from competing firms. I believe that Yelp holds a strategic position in online reviewing that will make it a valuable piece of property operating on it’s own or as a merger partner.
- Juxtapose Yelp’s profile with Google’s profile. As you can see there’s not as much metadata on Google that gives you the boundedness that Yelp offers. This is my evidence: Even if Yelp isn’t performing it’s own algorithm, you can to evaluate if a Yelper is trustworthy. As you can see, Yelp provides a variety of metadata that helps a fellow Yelper*** evaluate if a reviewer is trustworthy. # friends # of reviews Are they a regular contributor? Do you they a history of writing helpful reviews Elite status Rating distribution What’s their location? Do they live in the same city as the review How do they express their reasoning for their reviews How long have they had an account open?
- Marin Headlands Lived in San Francisco Bay Area for 25 years, but Yelp showed me things I didn’t even know about. I was curious and I wanted explore San Francisco a bit. Went to the Yelp and searched San Francisco: applied filtered based on highest ratings of Active Life: Marin Headlands came up as #1, Never heard of it, look at the photos, looked the reviews, I thought good enough And when I went it was just magical. It had pristine views, rolling hills, it was an old fortification which includes artillery canons, bunkers, and a radar dome If I had not used Yelp, I may never have would have had that experience, and be able to share it with my family. People want interactive systems to give you an experience which is what Yelp does.
- - Make reservations through its platform - Online reservations platform - Online delivery platform
- Yelp will continue to thrive Offers underlying value that people come back for It think it will be fine by itself. They need to do something creative to find new revenues streams other than just advertising. I think that someday will be attractive to a suitor who will pay a premium to acquire it. They are the park ave of the Monopoly board. If Facebook or Microsoft bought Yelp, that would mean Google would have to go through a competitor. Defensive of offensive.