Last week Greg Sterling noted: … Yelp and Google. They’re like Spain and Portugal in the 15th Century — rivals trying to carve up the local globe.
The analogy seemed wrong to me as Spain and Portugal were to a large extent equal in their strength. I noted in the comments that “I see the analogy as more like the US vs the Taliban or perhaps Grenada rather than one of equals like Spain vs. Portugal“.
Is Yelp, as Greg portrays, a powerhouse in local search? Or is their position more one of a far distant second to Google as a general local search site with little hope of competing? Or is the answer more complex than that?
When we view Yelp stricly from a consumer frame of reference (and ignore the lack of profitable business model and their thuggish SMB tactics) is Yelp a strong contender in the general local search category?
On the surface, my recent consumer survey would indicate that Yelp is running a far distant second (or third or fourth) to Google with little chance of competing:
Yet the answer is more nuanced and complex than that. When you parse the data by age, region and urbanicity the picture changes. Much more favorably for Yelp but even with those changes does the data rise to level of proof of Yelp as a general local search engine?
These insights from Google surveys provide clues as to why there is such a divergent view on the reality of Yelp:
Clearly age is a strong determinant in who uses Yelp. Usage in those over 45 drops way off.
Regional and state differences seem to play a big role as well. The west region and the northeast are more likely to use Yelp than the Midwest or the Southern regions.
This is true as well at a state level. This is particularly visible when you compare the state of CA or NJ (one of the most urban) with either MN or Georgia you see dramatic shifts in usage:
This custom report looks at those variables in aggregate and compares younger, urban searchers with rural, suburban older searchers:
In the end what you see with Yelp is a strong young, urban, bi-coastal bias that makes them a contender in those markets but a true also ran every place else and amongst all other users. Hardly rising to competitor to Google in a broad sense.
I think that the answer to the question of whether Yelp is a competitor to Google as a general local search engine lies in their own behaviors as well.
Yelp, as far as I understand it, has pretty much stopped attempting to add every business listing that companies like Localeze and InfoUSA can provide. They are only adding businesses added by their readers or by the business itself. This leaves their offerings very urban centric.
Their business model, which doesn’t scale well currently, can’t scale well at all in a rural or suburban territory. Its way too expensive.
So what Yelp has become is an urban local search engine. One that is popular in certain geographies and limited age groups.
While they might not be the Grenada that I implied initially, they are no Spain yet either.
Consumer Mindshare and Yelp: An Empire in Local Search Or a Wannabe? by Mike Blumenthal