In a move sure to change the way we shop and find our entertainment, Google is in serious talks to purchase Yelp, one of the vanguards of user-generated content and reviews on the Web, for around $500 million, it was reported today.
Yelp, which relies on free user reviews (meaning no pay) and selling spots at the top of the search lists to advertisers for $300-$1,000 a month, is set to make $30 million in revenue this year.
The move ties in neatly with Google's recent announcement of Google's Favorite Places, where businesses and restaurants will be identified with barcodes read by smartphones. The electronic barcodes could impart significant data to one's phone such as product reviews, price comparisons and coupons to on-the-fence shoppers mulling over a purchase.
Google's blog itself suggests that you get info or a review of a restaurant, perhaps locate a coupon, eat and then write a review as you finish your meal (I guess no one talks anymore. That's so 2007!) thus becoming part of a global shopping comparison network.
Should this all be a surprise? Not really. Google's localization tools got a tune-up earlier this year -- perhaps all the better to include Yelp's new data? Google's reviews, usually tied to its maps application, have been anemic at best. Yelp's robust listings will only help to flesh out its lack of data on stores, dentists, hairstylists etc. in several major markets across the country. Google has also been suggesting ways for businesses to improve searches and customize ads obviously to make more money in local markets.
Since some reports say Google and Yelp have been in talks for years, there's definitely been time for Google to come up with a good strategy to capitalize on its locally-driven content. Yelp has been a staunch standby for many people looking for a specific store or restaurant and needing a recommendation to compel them to walk inside.
The acquisition is sure to help consumers as well, since Google's other applications allow them to shop with real-time information for products (such as finding out if other stores have better deals) and finding mobile coupons for services or items right before check out.
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