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
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
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.
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Longtime Fool contributor Rick Munarriz is a freelance contributor to IAC's Citysearch, but he owns no shares in any of the stocks in this story. He's also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.