With almost 170 million monthly visitors, estimated annual revenues of half-a-billion dollars, and a stock price that’s tumbled from a 2014 high of $97 to today's mere $26, could Yelp be the next great acquisition in travel?
Currently, there are no signs of any such deals. But given the potential synergies between the local-business review site and the major players in the travel space, the idea doesn’t seem that far-fetched.
As Brian Blau, research director at Gartner, said to Tnooz:
“Yelp knows the local market really well. Travel companies are in sort of the same business — hotels, rental houses, etc., are also very local-business-oriented things.”
For a company like TripAdvisor, for example, Yelp could be an aggregation play, said Max Rayner, partner at Hudson Crossing:
“It’s right in their bailiwick. They could say we not only want to be dominant in travel reviews; we want to be dominant in reviews for entertainment and other local merchants.”
Other travel companies, meanwhile, might view Yelp as an asset against that potential dominance.
For instance, Alibaba Group, which has its new Alitrip travel brand, could get a leg up in North America by incorporating Yelp’s 90 million reviews -- a move that could prove valuable in preventing users from clicking over to you know who.
Expedia and Priceline might be uninterested in Yelp, other experts speculated, because they may prefer going the "verified reviews" route of only displaying reviews from customers who have actually booked a room, activity, or other product.
Then there are the non-travel players, such as Facebook, which began testing its own local-review service in December (after several years of experimenting with its Facebook Places directory), and Google, which considered buying the company back in 2009 and instead bought Zagat in 2011. Considering that Yelp is, at-heart, a local ad business, its data could be tempting.
Still, given the buying binges some travel companies have been on in recent years, it’s not hard to imagine a more travel-centric acquisition. As Rayner says,
“Once you’re done eating up an entire vertical, what do you do for growth? You have to start looking to adjacent fields and activities, and entertainment are natural adjacencies for hospitality.”