Yelp is clearly executing a growth strategy via acquisitions in Europe. The company has folllowed last week's purchase of Restaurant-Kritik with an acquisition of France's biggest review site, Cityvox.
The terms were not disclosed, but the narrative supporting the announcement is very similar: smaller site seeks larger partner to deliver deeper content on a global scale to its loyal user base. The timing was most certainly planned as a means to demonstrate a cohesive effort to lock down the European review maket.
Some snippets from Yelp's blog post announcing the move:
Hot on the heels of our acquisition of Restaurant-Kritik in Germany last week, the acquisition of Cityvox further illustrates Yelp’s commitment to the development of the European market and clearly underlines our goal of becoming the go-to local business review site internationally.We are looking forward to integrating this review and photo content into Yelp and putting it at the service of consumers throughout France, whether they be locals or one of the millions of annual visitors to the culture-rich country.The addition of Cityvox’s review and photo content will enrich the Yelp content in France, and hopefully attract yet more dedicated and committed Yelpers to the Yelp France community.
Over at CityVox, CEO Thibaut Viort shared some of the reasons for joining Yelp.
The words highlight just how Yelp has consolidated the global review market and created a sense of inevitable dominance for smaller review sites. Yelp's content moat has also become insurmountable, with acquisition targets pointing to the utility of having a global base of reviews in one place for traveling users.
Translating from the French, Viort shared the following insights into the decision to sell:
Sometimes websites must transform themselves, change addresses and find new means to welcome more people.We liked the idea that one of the largest review sites in the world would integrate content from Cityvox to help you discover the best restaurants, bars and businesses in France.We are convinced that linking up with Yelp is the best way to achieve our objective to furnish the most useful and reliable on nightclubs local businesses, thus creating the type of service I've wanted to build since I started at Cityvox.Yelp allows people to travel around the world and use one website and one interface to discover where to stay, eat, drink or have fun. We needed a partner to open the doors of the world to us.
The content from Cityvox will be integrated into the main Yelp product, and provide a deeper penetration in France.
These continued acquisitions are a reminder that review sites are ultimately content and community businesses - growth requires a continued churn of new reviews from both veteran and new users. At some point, in order to increase that moat at a faster clip, acquiring local competitors is the quickest way to lock that down.
This is a strategy similarly employed by Groupon during its heyday, which didn't end up working very well as that community was not brand loyal and there wasn't a content base to support ongoing engagement.
Yelp has the advantage here that the content remains useful over time, as reviews generally age well and local businesses are constantly opening and closing. More is sure to come from Yelp as the company follows this particular growth strategy in Europe.