Pando

Yelp not worried about Google's "struggling" local content play

By Erin Griffith , written on November 1, 2012

From The News Desk

With Groupon and LivingSocial grasping to offer "anything but" daily deals and Foursquare facing an uphill battle with revenue, Yelp appears to have the biggest head start when it comes to attracting local business marketing dollars.

The public company hasn't endured the rollercoaster drama that many of its Web 2.0 peers have gone through, which, as Sarah noted, has made its slow and steady crawl to becoming the "leader" in local content an uneventful one to follow. But the position is a precarious one: Many local businesses resent Yelp for its role in hosting smear campaigns from disgruntled customers, making ad sales to them tricky. Beyond that, Google, an advertising behemoth, is spending hundreds of millions of dollars on local content with acquisitions like Zagat from last year and Frommer's from August.

Local content is an area that user-generated Yelp dominates and is only beginning to monetize with ads. Meanwhile Google's editorial deals have been with established, trusted brands that likely don't let the unwashed masses publish reviews so scathing that Hollywood actors have made a parody out of reading them.

Still, if Yelp is worried, it doesn't show. In the company's third quarter earnings call today, CEO Jeremy Stoppelman dissed Google's forays into the space, saying the company has struggled.

Google has made an announcement or two regarding its play for local content almost every year Yelp has been around," he said. "But the things they've done haven't had a big impact."

"Every year, there's a big announcement that this time its different," he said. "They're trying to reenergize something that's been struggling for a long time."

Heated words, but not uncommon for the hotly contested battle for local dollars. At PandoMonthly last month, Foursquare CEO Dennis Crowley didn't mince his words either. When asked about competition from Yelp, he said, "We are a mobile-first company. Yelp isn't."

He added: We are inventing local search around big data. ... We are going to blow up this space in a way, and build these products people haven’t seen yet. And I think that by doing what we’re doing we’re going to be big in this space and the other players are going to be irrelevant.”

Maybe they're just tired of being asked about their competitors. Maybe they're all worried the local emperor has no clothes -- that local businesses might just never spend money on digital marketing. Or maybe, in the case of drama-free Yelp, things are finally about to get interesting.