Will Google and Yelp Finally Strike a Deal?

The question remains whether Google (Nasdaq: GOOG  ) will strike a deal with local review site Yelp. Google, the dominant, algorithm-based search engine is looking to grow in local and mobile search, and Yelp could be a perfect fit. The initial offer from Google was for more than $500 million, however, no deal has been signed and rumors are swirling that other synergistic companies such as Microsoft (Nasdaq: MSFT  ) , AOL (NYSE: AOL  ) , Yahoo! (Nasdaq: YHOO  ) , and IAC (Nasdaq: IACI  ) may be interested as well. 

In fact, the company reportedly received an offer for 50% more than Google was willing to pay, but according to a recent article in The New York Times, Yelp may simply be going through some common negotiating tactics. Apparently the two companies remain in contact and discussions could resume.

Still, a potential deal leaves open speculation about the companies' compatibility. As Reuters reporter Robert Cyran adds: "Google's mobile search ambitions makes this a natural pairing. Yet Yelp's untidy human element may fit awkwardly with Google's clean algorithmic bent."

What do you think? Will the deal go through, and if so, is it a match made in heaven? Or will there be some awkward marital counseling sessions in the future? Let us know in the comments box below.

Claire Stephanic does not own any of the companies mentioned. Google is a Rule Breakers recommendation. Microsoft is an Inside Value selection and Motley Fool Options has recommended a diagonal call strategy on the company. The Fool has a disclosure policy.


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  • Report this Comment On December 29, 2009, at 11:26 AM, thetucket wrote:

    I'm amazed yelp is worth $500M to Google, let alone $750M to anyone else...frankly, I think it's got potential, but right now, it kind of stinks. Yelp could use Google's influence to clean it up and make it shine in today's mobile world (afterall, Yelp was created before the smartphone era really began, and although it has apps for iPhone etc., and plenty of users, it's obvious that its format was not tailored to such on-the-go use. I don't like having to scroll through endless reviews with no editorial culling.) Yelp needs Google's smarts to turn it's user-based human reviews into consolidated, searchable, usefully-categorized data points. Google could use Yelp as jumping off point to improve it's "local" search engine for smartphones. Google's culture, tactics, ethos, economics, etc. are all too big and successful to be all that negatively effected by Yelp, even if they are not a match made in heaven. I say go for it.

  • Report this Comment On December 30, 2009, at 12:53 PM, GuiasLocal wrote:

    A Google buyout does not seem logical.

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