Maps for Recovery & Yelp for Discovery – a great combo

Last night, reports started circulating (see TechCrunch who broke the story as well as Greg Sterling at SEL & Scoble for analysis) that Google was in late stage conversations to acquire Yelp for $500 million. It is deal that, whether it occurs or not, will have huge impact on the makeup of the local landscape. With Yelp in play, additional consolidation in the space is likely to occur rapidly.

I have no idea whether this deal will go through but I have been an active user of both products and can understand why it is in Google’s and Yelp’s interest that it would. I am more intrigued though by the user experience and what will become of that if a merger does take place.

Since June when I purchased an iPhone, I have travelled without a laptop, using the iPhone exclusively as both computer and to navigate the unfamiliar local environments. Over that time I have experimented with a great number of local apps but in the end have always returned to and continue to use two: Google Maps and Yelp.

I would use Google Maps mostly for the “recovery” process of local navigation; what is the address of Kossars’s? Where is the hotel in relation to the subway exit? What is the quickest way to get 8th Avenue and 14th St? In large urban areas at least, it provides incredibly accurate AND useful results.

Yelp on the other hand, I would use for “discovery”. What tasty ethnic restaurant would meet our budget? Where can we get Ethiopian food? What is cheap and near the hotel? In fact, upon arriving in NY and meeting my “nephew” near my hotel for dinner we had both identified the same restaurant as a likely choice. He by asking his college roommate and me by asking Yelp.

Google clearly had the recovery process nailed and Yelp had a well developed discovery process. It struck me at the time that what was missing in the local space was the ability for the Yelp like discovery process to take place across all local businesses not just restaurants or hotels.

What did Yelp have that Google didn’t?
- More granular data about pricing, dishes and other specifics in the restaurant arena
- A greater quantity of passionate reviews and reviewers
- A more faceted search process

I had always thought that it was the reviews and business details that made Yelp so useful. But in the end, the ability to quickly and easily direct the program to narrow the choices of what met my needs, made Yelp really work for me. This is, at least in a limited way, faceted search. Where the user, by working a little harder at giving the machine more information, can get better results. Some parts of the structured search were provided automatically but all were provided seamlessly.

With Yelp, the process of selecting a restaurant, particularly on the iPhone, allows the user to narrow down the data set to a meaningful number of useful results. What neighborhood, what price range, what quality range are user inputs that quickly allow the service to rank and present a list of restaurants that is satisfying. Yelp really seemed to want to know what I, the user wanted.

Google, on the other hand, has always treated search as a commodity and the user as a simpleton. It has always taken the single field, brute force, we’ll make a great guess at what the user wants approach to providing the answer. With its many algorithms and huge amount of available horse power, this has worked well for web search. It, does however, have severe limitations in local search where ground truth is the ultimate measure of success, not relevance.

But for a structured search like Yelp’s to work and for Yelp to keep growing, they need data and lots of it. That is something that Google has plenty of in local.

So while I think Google would be acquiring a great number of valuable assets if they were to acquire Yelp (a large social network, 8.5 million reviews, a local sales force, a rapidly growing audience), it could also be acquiring a new way of looking at search in the local space. One that clearly works very well.

Please consider leaving a comment as your input will help me (& everyone else) better understand and learn about local.
Maps for Recovery & Yelp for Discovery - a great combo by

16 thoughts on “Maps for Recovery & Yelp for Discovery – a great combo”

  1. Mike: Nice writing and interesting descriptions. Its good to get a perspective from someone who has been using both elements….and who came to rely upon them. Interesting. Did you try other search engines or other review sites? Just curious.

    Very small point relative to your writing: Yelp doesn’t have much of a sales force at this point. I recieved a call re: a couple of businesses we claimed on Yelp. A sales office on the West Coast, one on the East Coast in NYC. Certain cities have something called “area managers”. Not exactly sure what these folks do. Got the feeling they were sort of cheerleaders. (shrugs). I think Yelp is opening a sales office in Texas. (not sure).

    I enjoyed the way you described your combining the 2 services.

    Bing…you should read this review. Anyone looking to move in on Yelp’s territory you should also read this.

  2. @Dave

    I have tried and used Mapquest, Urbanspoon, wikitude, Safari and a number of others that I can’t remember. All were tested and deemed not productive, trustworthy or useful…I am currently testing Bing which just released yesterday..

    I am not that familiar with Yelp’s advertising nor sales processes although I think from some of the rumors floating around that some of their practices would not go over at Google.

  3. “What did Yelp have that Google didn’t?
    - More granular data about pricing, dishes and other specifics in the restaurant arena
    - A greater quantity of passionate reviews and reviewers
    - A more faceted search process”

    Mike,

    I do not see either #1 or #3 as difficult problem for Google to overcome. Certainly if they just wait a year, smaller players will develop around restaurant menus that they could acquire for a much smaller price. Additionally Localeze et al are starting to move into that rich-data space with admirable alacrity…on #3, G’s technology is surely able to accommodate faceting but it is a brand choice to continue to use the OneBox.

    I think #2 is really the key point. 8.5MM reviews, and a userbase that might actually be able to make Community Edits a good idea–given how committed they are to that concept–strikes me as the key acquisition.

    That said, having some interesting discussions with an avid Yelper friend on Twitter this morning…it strikes me that the synergy between Google and Yelp may not be ideal, as Yelpers may become less passionate, or turned off, by an 800-lb. gorilla…?

  4. @David

    There is no question that acquisitions can go south and that the acquirer can not extract full value….certainly that could be the case here if Google doesn’t execute correctly….

    The many assets that Yelp has and how Google assesses them and utilizes them is for Google to decide…if and when a transaction actually takes place…it could all be a ploy to put Yelp in play at an even higher evaluation. Who knows?

    That all being said, I assume that it is easier to buy the package than to build…..while there may not be huge technical limitations in aggregate it is quicker and more profitable to just put down the cash (see Scoble’s comments about that)…and get both the technology, the brand, the visitors, the data etc etc. It really isn’t whether Google could build it cheaper but whether they can get a good return on their investment.

    In the piece though, I wasn’t analysing the strengths of the company as a buyout target with that comment but their strengths to me as a user of the product.

    For me, my interaction with both is personal and they each successfully accomplish different tasks. It is that distinction that makes them complimentary and in my (users) mind, a good fit.

  5. @Mike as with Maureen Dowd/Twitter several months ago, I have boycotted Scoble for his asinine SMB/SEO comments the other day.

    I agree that Google is right to buy SOMEbody but I think they would be overpaying handsomely if it were *just* a technology deal.

    I agree that Yelp and Google are both very attractive products, but for entirely different reasons.

  6. For companies as large as Google it is usually easier for them to acquire a company than replicate one in house. How do you put a price on Goodwill?

    @David, good point about the willingness for community edits.

    If Google acquires Yelp, all of us ‘techies’ will know that an 800 LB gorilla owns them but what percentage of their users would ever know? I don’t think it would negatively impact their user-base much.

    What happened to YouTube after Google acquired them…the traffic actually spiked and continued to rise. If this deal gets signed I would be interested to see what angle Google takes.

  7. Mike -
    Just wanted to mention that I use the same combo you do (Google and Yelp) when researching local places. The length and detail of Yelp reviews appears to me to exceed that of any other public platform I’ve encountered, and this makes it fun for me. Somehow, Yelp has managed to make this kind of research feel fun. Interesting, huh? Gut feelings like that often guide me in products I end up using over and over again, and my gut feeling about a Google/Yelp merger is that it would be super for Google. Not quite as sure about benefits to Yelp (other than monetary).

  8. Comments from Business Week on the business aspects of this proposed deal:http://www.businessweek.com/technology/content/dec2009/tc20091218_024906.htm?chan=rss_topStories_ssi_5

    It appears that Yelp sales people called one of our businesses twice. That is because we claimed the listing.

    I searched on yelp for Italian restaurants in my region. Yelp is way more urban oriented than suburban and clearly can’t accomodate rural now with a 5 mile search radius. That works for cities but it doesn’t work for suburbs or exurbs.

    Noticed one advertiser that grabbed my attention; a restaurant I’ve probably gone to for 15-20 years, though not recently; maybe 20 miles away and w/ a lot of traffic. I always thought of it as “best”.

    Still gets awesome reviews. The ads were showing when I put in some local jurisdictions but not others. My eye gravitated toward the ad because I recognized the name. The ad gave the restaurant presence beyond the 5 mile radius….and reviews included those from people in my area and beyond. Clearly a suburban business can draw from beyond 5 miles

    Yelp works hard to create a “community” and they have it.

    Its a nifty idea by google, its interesting how it worked for you, Mike, its interesting to note that the “quality” of Yelp wannabes is improving.

    David: If Yelp is generating $45 mill in sales now and Google is willing to pay $0.5 billion…that is a lot for that business…but I’m sure they are counting on growth.

    meanwhile, think I’ll go to that restaurant. ;)

  9. Google rolling up local last mile players seems just like adding real time, both allow Google to feel out the pieces of an evolving ‘place page’ for all results, makes sense.

  10. @Larry

    I agree but I also think though that in the case of Yelp…it is more than “feeling out” as the combo of Maps and Yelp creates a growth juggernaut in local that will instantly achieve market dominance of viewers and ads.

  11. The whole thing makes me a little nervous. I have played with Yelp as I learned more about its importance in local search but it just isn’t a relevant player in my industry vertical (wedding and portrait photography.)

    I like many, ask for a review from my clients through Yelp, got four or five of them and not one appears on my company listing now because they are not active “Yelpers.” Add to that the rumors and controversy about Yelp’s advertising pressures and maybe a new boss is what Yelp needs to become more useful to a greater variety of service industries.

    I have a lot of faith in Google to nail down “ground truth” as well as it has relevance given the time to make it better.

    If the Yelp local search model is the next way of doing things… I’m going sweat a little. They are not relevant to my client base. How do you see Google potentially using Yelp? Will it replace Google Maps or augment it somehow? And in what way?

  12. @Chris

    Not to worry. Apparently, the deal is off.

    I would agree with you about Yelp’s business practices being less than appealing and Yelp is not directly relevant in many industry segments at this point.

    In my opinion, Google was trying to buy was market share dominance of unique page views and the advertising growth. However, it now appears to be a mute point.

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