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Google (Nasdaq: GOOG ) may have a thing or two to say about your dinner plans tonight.
TechCrunch reports that Google is in negotiations to snap up Web 2.0 darling Yelp.com, in a deal worth $500 million or more.
Yelp is a community-driven site where users share reviews on restaurants, nightclubs, and other local establishments. Editorially driven sites including IAC's (Nasdaq: IAC ) Citysearch and AOL's (NYSE: AOL ) City Guide once drove this niche. However, just as Expedia's (Nasdaq: EXPE ) Trip Advisor empowered the travel-savvy community to revolutionize the way we score hotel suggestions, Yelp and IAC's Urbanspoon are turning to the wisdom of fork-wielding crowds.
Google would be eyeing Yelp for more than just its raw traffic. Given Google's intentions to grow in local and mobile search, Yelp is a perfect fit. It's the kind of move that may leave archnemesis Microsoft (Nasdaq: MSFT ) with little choice but to snap up IAC to get its hands on Citysearch and Urbanspoon. (Ask.com could be a search-engine dessert.)
Google has $22 billion in cash and short-term investments, so a deal for Yelp wouldn't break the bank. It also wouldn't get in the way of the larger and logical pursuit of either Facebook or Twitter. However, Yelp would be an easy property to monetize, given Google's position as the country's largest platform, by far, for online advertising. The only caveat is that Google has to be careful not to overpopulate Yelp's pages with ads of rival eateries and businesses. The sticky community that made Yelp a success could quickly turn away if they think the site's become too corporate.
Clearly, we'll have to wait until either side makes this official before tossing the wedding rice. But the deal certainly seems to make sense, given Yelp's ability to cash out at a great price, and Google's appetite for local content that practically creates itself.
Do you think Google will buy Yelp? Is it a good idea? Share your thoughts in the comment box below.