Yelp launched its local review site in Australia today and cofounder Jeremy Stoppelman traveled to the country for the occasion. Since 2004 the company has accumulated a database of more than 22 million reviews, none of which has included Australian businesses until now.
Yelp’s revenues have come from the sale of online ads on its review site to U.S. businesses. In Australia Yelp is partnering with Sensis, which is providing business listings and online advertisers.
The Australian expansion comes as Yelp is poised to raise up to $100 million in an initial public share offering next year, according to documents filed with the U.S. Securities and Exchange Commission. The IPO could value the company at $2 billion. Not a trivial sum, but a fraction of the $100 billion Facebook hopes to generate from its IPO next year.
Yelp had an average of 61 million unique users in Q3 2011. A large base of amateur reviewers are rewarded with badges and social events. However, the company has experienced both gains and losses in 2011. Its SEC filing revealed a net loss of $7.6 million this year to Sept. 30.
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I’m really curious about the strategy for Sensis here.
They already own and run Citysearch here in Australia, and of course Yellow Pages and Quotify. Surely they don’t need to increase their overheads with yet another brand to promote. Similarly their old print sales staff are really struggling with how to sell their current digital products, how are they going to add yet another digital product? In particular getting their heads around paying advertisers getting bad reviews for all to see is going to be hard for them.
It sounds like a completely defensive move from Sensis, one to stop Yelp from entering the Australian market once they IPO. It also sounds like complete brand suicide for Yelp in Australia, they should pay close attention to the poor job Sensis have done with Citysearch, Trading Post, Quotify, etc.