Foursquare Ups its Game Against Yelp and Google in Restaurant Search

A new app from an "old" company is shaking things up.

Aug 19, 2014 at 11:30AM

Foursquare Labs, the mobile app company that named me "mayor" of my local coffee shop, launched a shot at Yelp (NYSE:YELP) and Google (NASDAQ:GOOG) (NASDAQ:GOOGL) earlier this year. On the company's official blog, Foursquare declared, "Local search is fundamentally broken." The new Foursquare app attempts to fix what's broken with local search, and puts pressure on Google and Yelp to improve their products.

No matter how this plays out, the way you find new restaurants is about to change.

Tastes

The new app asks users what their tastes are when it's first launched. Source: Foursquare.

A personalized, mobile-first solution
One of the biggest complaints Foursquare has about Yelp and Google is that they provide "one-size-fits-all results." Foursquare asks users to tell it their tastes, and it uses people's previously visited businesses to recommend new ones. The result is a more personalized experience.

Foursquare also has a mobile first approach. Unlike Yelp or Google, which have had to adapt their products for mobile, Foursquare started on smartphones when it launched in 2009. This made features like "tips," where users provide short (character-limited) reviews for potential patrons, much more easily digestible on mobile.

Why Yelp should be concerned
Although Yelp's product wasn't originally made for mobile, the company has adapted well. Last quarter, about 50% of Yelp's traffic came from mobile -- 68 million visitors. The number of mobile visitors grew nearly twice as quickly as overall visitor growth last quarter. Over the last two years, the percentage of Yelp traffic on mobile devices has more than doubled.

Yelp
Source: Yelp earnings calls.

Yelp's presence on mobile is fantastic, but there's one caveat. The vast majority of Yelp's mobile traffic comes from the mobile web. Yelp stopped reporting its app usage last quarter, but in the first quarter, that number was just 10.9 million users.

Comparatively, Foursquare has 45 million registered users, but only a fraction of them are active. As of the end of 2012, Foursquare reported it had 8 million active users and 25 million registered users. It's quite probable that the number of people using the Foursquare app is similar to the number using the Yelp app.

60 million-plus local searchers up for grabs
Mobile web users are easily influenced by Google's search results. The default search engine on both Android and iOS is Google, and the company's share of mobile search is even higher than its overall web search share. Last year, Google accounted for 68.5% of all mobile searches.

Yelp, by its own admission, is extremely reliant on its Google search rank, particularly on mobile. Google is already working on integrating its mobile web search with native apps. That ought to give Foursquare a boost in its mobile search results once mobile apps are fully integrated. The next logical step for Google is to offer app-install ads, which could have Yelp and Foursquare competing for consumer-facing ad space.

Huffpo App Indexing
Google added app indexing to its mobile search engine in April. Source: Google "Inside Search" blog.

Meanwhile, Google is promoting its own products. Searches for "coffee shop" or "Mexican restaurant" on mobile bring up results on Google Maps, which is integrated with reviews from Google Plus and menus from Urban Spoon, another competitor of Yelp and Foursquare.

Google is increasingly interested in local search. Most notably, the company bought Zagat a couple years ago, and included its ratings in Google Now. With Google's position as the gatekeeper of the mobile web, it has an immense amount of influence over where those 57 million non-app Yelp users find local businesses.

The pressure is on
The new Foursquare app has received very positive reviews since its release at the beginning of August. Yelp ought to respond with some improvements to its mobile interface, or it risks losing share to the more personalized approach of its competitor. Yelp certainly has the data, having added the check-in feature soon after Foursquare came onto the scene. Google, too, suffers from an impersonal approach despite the gobs of data it has on its users, but improving search results ought to allow both Yelp and Google to increase ad prices for local businesses as they develop better individual profiles for their users.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Adam Levy owns shares of Apple. The Motley Fool recommends Apple, Google (A shares), Google (C shares), and Yelp. The Motley Fool owns shares of Apple, Google (A shares), and Google (C shares). 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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers