The business review site Yelp (NYSE:YELP) has had a rough past three months, with its stock price down nearly 40%. With such a decline in value, you might wonder if it's time to buy into a site that seems to have trending concepts like local, mobile, and online advertising behind it. To help discover that answer, check out the below infographic and the following discussion on whether Yelp is a buy or sell.


Source: Yelp 10-Ks and 10-Qs.

Mobile threat
Yelp maintains a strong mobile presence, with mobile users growing over 50% in the first quarter of 2014 versus the first quarter of 2013. As mobile use increases, Yelp's free application can continue to grow its audience and expand functionality for both businesses and users. For example, Yelp just released a new service for small businesses to book reservations, outside of its more complete SeatMe service or through the OpenTable (NASDAQ:OPEN) integration. OpenTable's stock suffered after Yelp announced this new service, but Yelp and OpenTable's 600 other partners only contribute between 5% and 10% of North American online reservations with the majority coming from restaurant websites and OpenTable's own sites and applications.

Don't shoot the messenger
Reviews on Yelp have been proven to sway consumer preferences. Unfortunately for some businesses, they have swayed customers toward a competitor. Yelp maintains that it's completely impartial, only removing reviews that it deems fraudulent with its algorithm, but many businesses regularly complain about questionable practices if they decide not to advertise with Yelp. Yelp has even created a webpage to simply explain that an advertiser only buys an advertisement, and not manipulated reviews.

Even if it's just a case of businesses taking up a fight with Yelp rather than the displeased customers, it's unlikely Yelp will be able to completely clear its name. But as a positive sign for the company, the proportion of businesses buying advertising has risen to 4.6% out of the total businesses that have been "claimed" by the business owners. This is up from 4.1% last year.

Buy or sell Yelp
Overall, Yelp still has yet to post a profit and has ramped up marketing costs to push revenue, but the company can afford this with $400 million in cash and little debt. It does have a strong brand with a growing audience of both users and advertisers, even though growth seemingly has not been as fast as some stockholders desired. As Yelp ropes in more businesses, continues to work to shed its somewhat tainted image, and becomes the go-to site for consumers looking to spend money, the long-term prospects look solid.

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Dan Newman has no position in any stocks mentioned. The Motley Fool recommends OpenTable and Yelp. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.