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The story
Founded by Jeremy Stoppelman and Russel Simmons in 2004.1
Origins (2004–2009)
Two former PayPal employees, Jeremy Stoppelman and Russel Simmons, founded Yelp at a business incubator, MRL Ventures, in 2004. Stoppelman and Simmons conceived the initial idea for Yelp as an email-based referral network, after Stoppelman caught the flu and had a difficult time finding an online recommendation for a local doctor. Max Levchin, the co-founders' former colleague as founding chief technology officer of PayPal and founder of MRL Ventures, provided $1 million in Angel financing. MRL co-founder David Galbraith, who instigated the local services project based on user reviews, came up with the name "Yelp". Stoppelman explained that they decided on "Yelp" for the company's name because "it was short, memorable, easy to spell, and was familiar with 'the help' and 'yellow pages'".
According to Fortune, Yelp's initial email-based system was "convoluted". The idea was rejected by investors and did not attract users beyond the cofounders' friends and family. Usage data showed that users were not answering requests for referrals, but were using the "Real Reviews" feature, which allowed them to write reviews unsolicited. According to The San Francisco Chronicle, "the site's popularity soared" after it was re-designed in late 2005 with the distinctive Burst logo. Yelp raised $5 million in funding in 2005 from Bessemer Venture Partners and $10 million in November 2006 from Benchmark Capital. The number of reviewers on the site grew from 12,000 in 2005, to 100,000 in 2006. By the summer of 2006, the site had one million monthly visitors. It raised $15 million in funding from DAG Ventures in February 2008. In 2010, Elevation Partners invested $100 million. $75 million was spent on purchasing equity from employees and investors, while $25 million was invested in sales staff and expansion. Yelp grew from 6 million monthly visitors in 2007 to 16.5 million in 2008 and from 12 to 24 cities during the same time period. By 2009, the site had 4.5 million reviews. By 2010, Yelp's revenues were estimated to be $30 million and it employed 300 people.
Private company (2009–2012)
Yelp introduced a site for the United Kingdom in January 2009 and one for Canada that August. The first non-English Yelp site was introduced in France in 2010; users had the option to read and write content in French or English. From 2010 to 2011, Yelp launched several more sites, in Austria, Germany, Spain, and the Netherlands. International website traffic doubled during the same time period. An Australian website went live in November 2011. It was supported through a partnership with Telstra, which provided one million initial business listings, and was initially glitchy. By the end of 2012, Yelp was publishing reviews for establishments in 20 countries, including Turkey and Denmark. Yelp's first site in Asia was introduced in September 2012 in Singapore, which was followed by Japan in 2014.
In December 2009, Google entered into negotiations with Yelp to acquire the company, but the two parties failed to reach an agreement. According to The New York Times, Google offered about $500 million, but the deal fell through after Yahoo offered $1 billion. TechCrunch reported that Google refused to match Yahoo's offer. Both offers were later abandoned following a disagreement between Yelp's management and board of directors about the offers. In June 2015, Yelp published a study alleging Google was altering search results to benefit its own online services.
Yelp began a service called Yelp Deals in April 2011, but by August it cut back on Deals due to increased competition and market saturation. That September, the Federal Trade Commission investigated Yelp's allegations that Google was using Yelp web content without authorization and that Google's search algorithms favored Google Places over similar services provided by Yelp. In order to avoid an FTC anti-trust lawsuit, in January 2014, Google agreed to allow services like Yelp the ability to opt out of having their data scraped and used on Google's websites.
Public entity (2012–present)
Having filed for an initial public offering (IPO) with the Securities Exchange Commission in November 2011, Yelp's stock began public trading on the New York Stock Exchange on March 2, 2012. In 2012, Yelp acquired its largest European rival, Qype, for $50 million. The following year, CEO Jeremy Stoppelman reduced his salary to $1. Yelp acquired start-up online reservation company SeatMe for $12.7 million in cash and stock in 2013. Yelp's second quarter 2013 revenue of $55 million "exceeded expectations", but the company was not yet profitable.
In 2012/13, Yelp moved into its new corporate headquarters, occupying about 150,000 square feet on 12 floors of 140 New Montgomery (the former PacBell building) in San Francisco. The company was profitable for the first time in the second quarter of 2014, as a result of increasing ad spending by business owners and possibly from changes in Google's local search algorithm. The algorithm dubbed Google Pigeon made authoritative local directory sites like Yelp and TripAdvisor more visible. Over the course of the year, Yelp websites were launched in Mexico, Japan, and Argentina. Also in 2014, Yelp expanded in Europe through the acquisitions of German-based restaurant review site Restaurant-Kritik and French-based CityVox.
In early February 2015, Yelp announced it bought Eat24, an online food-ordering service, for $134 million. Then in August 2017, Yelp sold Eat24 to Grubhub for $287.5 million. The acquisition resulted in a partnership to integrate Grubhub delivery into the Yelp profiles of restaurants.
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In late 2015, a "Public Services & Government" section was introduced to Yelp, and the General Services Administration began encouraging government agencies to create and monitor official government pages. For example, the Transportation Security Administration created official TSA Yelp pages. Later that year Yelp began experimenting in San Francisco with consumer alerts that were added to pages about restaurants with poor hygiene scores in government inspections. Research conducted by the Boston Children's Hospital found that Yelp reviews with keywords associated with food poisoning correlates strongly with poor hygiene at the restaurant. Researchers at Columbia University used data from Yelp to identify three previously unreported restaurant-related food poisoning outbreaks.
On November 2, 2016, concurrent with its earnings report for Q3 2016, Yelp announced it would drastically scale back its operations outside North America and halt international expansion. This resulted in the termination of essentially all international employees across Yelp's 30+ international markets from the sales, marketing, public relations, business outreach, and government relations departments. Overseas employees now primarily consist of engineering and product management staff. These layoffs affected only 175 individuals or 4% of its total workforce.
In March 2017, Yelp acquired the restaurant reservation app Nowait for $40 million. In April 2017, Yelp acquired Wi-Fi marketing company Turnstyle Analytics for $20 million.
In early 2020, Yelp listed space at 55 Hawthorne Street, San Francisco, for 235 employees as available for sublease. Business closures and stay-at-home orders during the COVID-19 pandemic in the United States caused a massive decline in searches on Yelp (down 64-83% from March to April, depending on category) and company revenues. On April 9, the company announced it would lay off 1,000 employees, furlough about 1,100 with benefits, reduce hours for others, cut executive pay by 20–30%, and stop paying the CEO for the rest of 2020.
In September 2021, Yelp announced that it was relocating its corporate headquarters to a smaller space at 350 Mission Street to be subleased from Salesforce. On June 1, 2023, Yelp decided to close its offices in Phoenix, Arizona and Hamburg, Germany. According to an announcement made by the company, less than 6 percent of the available workstations in these offices were being utilized. This move comes after Yelp had already shut down its New York, Chicago, and Washington, D.C. offices. As of mid-2023, Yelp maintains a single remaining office in the United States in San Francisco. Additionally, the company will continue its operations in Toronto, Canada, and London, United Kingdom. The closure and downsizing of these offices are expected to result in approximately $27 million in annual cost savings for Yelp during the 2023–24 fiscal year. As of February 2024, its website listed reviews for establishments in 32 countries.
In November 2024, Yelp Inc. acquired RepairPal, an auto services platform, for $80 million. In January 2026, Yelp Inc. acquired Hatch, an AI-powered lead management and communication platform, for $270 million in cash with an additional $30 million of employee retention.
From Wikipedia’s article on Yelp, shared under CC BY-SA 4.0.7