Yelp Gets Good Ratings On 2Q12 Earnings, Revenue Jumps 67 Percent – Lifts Stock:
Yelp, the online ratings site that allows users to rate restaurants, eateries, dinners, bars and local businesses had a stellar second quarter 2012 posting a much lower than expected loss. Yelp’s revenue jumped 67 percent from the a year ago and the company reported revenue of $32.7 million.
Ratings And Reviews Matter Online
Ratings and reviews online is a business model that may have been overlooked for years. Angie’s List hasn’t been able to make significant headway with investors but sites like Yelp which make it much easier to review and rate are still growing. Google purchased Zagat last year for more than $151 million and incorporated the listings for restaurants, diners and entertainment into their search results. This had somewhat of a negative impact on Yelp but the company is able to weather the storm by obtaining reviews and creating corporate partnerships.
Will Yelp’s Earnings Help Internet Companies Get More Attention From Wall Street?
Yelp went public in March to begin trading at $15 per share and the recent IPO price debacle from Facebook as well as other social media companies has made internet investing less attractive. Yelp was rewarded for its earnings after the close of trading. The stock initially fell precipitously to 18.52 before the close of trading at 4:00 pm EST before the earnings news was announced. Yelp shares rose to 22.33 moments after its earnings were revealed.
Yelp’s earnings could have a positive impact on the overall market if investors begin to see a light at the end of the internet investing tunnel. It’s been rocky for social media investors particularly now that Facebook is hitting new lows and could soon fall below $20. Facebook shares hit a new all time low of 20.84 in today’s trading. Its cousin Zynga, the social media gaming site is now selling for $2 and change. What’s good for Yelp may not work for LinkedIn, Pandora and others who are now selling in the public markets. A year from now the story might look brighter and better ‘connected’.