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To follow up on the recent post about Yelp’s funding, I was able to sit down with Yelp CEO Jeremy Stoppleman yesterday at the company’s San Francisco headquarters.

The company is moving in some interesting directions and the $15 million it just received will provide the fuel. Much of it will be put toward sales and marketing to seed review activity and bring in SMB advertisers. Its 10-person sales office in New York City is the first such move and will be staffed with new and existing inside sales reps.

To clarify a point made in the last post, most of the company’s efforts to generate new reviews involve moving into new cites, rather than into new categories. Categories, according to Stoppleman, have to happen naturally and the company takes a hands-off approach when it comes to the direction of the content. Its geographical expansion plan also interestingly takes a stepping stone approach that branches out from existing cities and take advantage of the word of mouth and cross-pollination of people between nearby cities like L.A., San Diego and San Francisco in order to organically grow its branding and base of reviews.

Not surprisingly, the content categories and how they break down remain fairly constant across different cities. Also not surprisingly, restaurants is the largest category; however, it makes up only 35 percent of businesses reviewed. Retail comes in second, meaning there are opportunities to look at developing product models that take the offline conversion reality to heart (Krillion, NearbyNow, etc.). We’re seeing the online shopping world move toward more local product feeds and inventory data, and the distribution deals that let companies like Krillion push this data to well-traveled local search sites.

Stoppleman also says the company is seeing traction around the health-care vertical, which makes sense because it is conducive to review generation and community. But here, it’s harder than restaurants to build a base of reviews because of the relative infrequency of transactions (think; number of times you get your teeth cleaned vs. number of times you go out to eat). As my colleague Peter Krasilovsky pointed out to me this morning, medical reviews are also tough because it is a complex field, and it’s not always easy for the layman to communicate service quality. My father, a physician, echoed this point a few weeks ago in a discussion about a doctor I found on Yelp.

“Sometimes you’ll get a positive review because the doc is extra friendly or has good magazines in the waiting room,” he said, “but in reality they might not be good at all.”

New Directions

Most interesting I thought was Yelp’s movement toward emerging local media such as mobile and video. With video, the opportunities are to boost the user experience and the review capability by integrating user-generated video of local businesses. There is also the possibility of bringing in local merchant video which businesses pay for (the same thing being integrated at many IYPs). This fits in with Yelp’s overall monetization scheme, which includes various placement upsells.

More immediately, the company is looking at mobile. Stoppleman is excited about the directions the mobile world is moving with the iPhone and with Google and Apple’s open source mobile developer platforms. A Yelp mobile app could involve access to Yelp accounts where Yelpers can upload pictures or flag certain businesses to review when they’re back in front of their computers. Writing reviews on the go, conversely, is something Stoppleman would like to stay away from.

“We don’t want to degrade the quality of the reviews by having people write them on mobile phones. People use abbreviations and different language while texting and that’s not the quality review people expect when they are online.”

With the iPhone SDK launched last week, the company hopes to build some Yelp mobile applications and has already begun to tinker with the code to see what types of Yelp mobile apps are viable.

“It’s only been out for a few days but we’re playing with it to see what kind of possibilities it has for us,” says Stoppleman. “We did the same thing when the Facebook API was released and it’s just a matter of determining what the API can do for you and then deciding whether or not to make the investment.”

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