In order to boost growth and profitability, Yelp has been expanding its community of restaurant and business reviews internationally. The company's latest move is an acquisition, adding Germany's Restaurant Kritik to the Yelp family.
The website features 330,000 reviews of over 94,000 restaurants across Germany, and will solidify Yelp's position in the country. Yelp currently reaches 29 countries globally.
In a blog post announcing the purchase, Yelp's VP of Business Development Mike Ghaffary said:
Restaurant-Kritik has built a local reputation for high quality restaurant reviews across Germany and we are excited about the prospect of integrating this great content into the Yelp Germany experience.
Restaurant-Kritik joining Yelp helps make the largest global community of reviewers and great local information even stronger. Now available in major metros in 29 countries across the world, the addition of Restaurant-Kritik content to the Yelp family will see us further expand our depth of content in one of our core European markets.
Kritikers themselves (as Restaurant-Kritik users are known) have long been asking about the possibility of joining a global community of reviewers, and we’re thrilled to be able to connect them to Yelpers across the globe with the same passion for discovering local businesses and commitment to sharing their experiences to help other consumers find the best businesses around them, wherever they are.
This last bit is important, as it suggests that the Restaurant-Kritik community wanted to be a part of a global review community rather than a country-specific specialized site. It remains to be seen how the two sites will be integrated, and if the Kritikers will lose their site altogether.
Yelp's recent earnings announcement disappointed analysts, missing revenue estimates by $3 million while returning a net income of $3.6 million - a turnaround from last year's same quarter loss of $2.3 million. After the revenue miss, Yelp's stock dropped 15% and is still depressed from highs set earlier in the year. In a statement on the earnings, Yelp CEO Jeremy Stoppelman said geographic expansion was on the immediate roadmap:
As we look to the future, we’ll continue to engage our community, develop new ways to show businesses the value Yelp provides and expand and deepen our geographic footprint.
Yelp is also facing increased competition for the local marketing dollar, as businesses are pulled by existing services such as Google in addition to emerging products such as Groupon's recent Pages rollout. As merchants face increased options for local marketing, sales costs for companies targeting these merchants increase - so Yelp must maintain that upwards trajectory in revenue while carefully managing its costs in order to maintain profitability.
Yelp has been busy drumming up new business this quarter, most recently announcing an integration with Hipmunk that allows Yelp users to book hotels and travel directly on the Yelp site.