Tag Archives: yelp

Angie’s List Raises $22.5 Million; Sees IPO Within 18 Months

Angie’s List, the premium ratings and review service for home and medical services, has announced that it has raised $22.5 Million from institutional investors as it prepares for an IPO within 18 months. Investors in this round include some public funds managers, including Wasatch Funds. The company previously raised $48 million, making for a grand total of $70.5 million raised. Battery Ventures remains the lead investor.

The Indianapolis-based service charges members anywhere from $10 to $67 per year for access to its ratings and reviews. The service reports over one million members, which probably translates into at least half a million paid and trial accounts, since there are typically two members per account.

Current revenues are not disclosed. But in 2008, roughly half of Angie’s List’s $50 million in revenues had come from membership and set up fees. The other half had come from advertising from reviewed companies that are highly rated (“B” and above) as well as national companies, such as appliance makers and retailers. Advertising can be found on the website as well as in a printed, monthly magazine that is well read by members.

Angie’s List has grown its mission considerably in the past couple of years. It has raised its profile with aggressive television, radio and print advertising, and added medical reviews, which it has intended to eventually break out as a separate, paid service. It has also added national services, for categories such as custom car restoration – it takes its Indianapolis roots seriously– and recently unveiled The Angie’s List Big Deal, a group buying effort that is now in 30 local markets and will be in 50+ markets by year end.

The big question marks for Angie’s List are whether it can simultaneously sustain its growth in the face of free competitors, such as Yelp, ServiceMagic and others; get beyond its older, home owner demographic; successfully extend its service to the new categories, and others; and maintain its friendly, home-spun “community” image.

OpenTable Launches Group Buying Deals (Updated)

Restaurants are among the top categories for group buying deals. Now OpenTable, the restaurant reservations service, is getting in on the game. On its blog today, OpenTable announced that it is launching a weekly “Spotlight” offer that provides diners with $50 of dining for $25 at a featured restaurant, which must be an OpenTable customer.

The revenue is being split with restaurants, and represents OpenTable’s first transaction product with consumers.OpenTable says it will feature a wide range of restaurants, both casual and formal.

Most dining parties will probably end up spending more than the offers, since typical OpenTable customers spend $50 a head and bring 2-3 people to dinner. Yelp has also been experimenting with group buying under the “Yelp Eats” and “Yelp Drinks” monikers.

Spotlight launches first in New York and Boston, with the weekly offers available beginning on Thursdays at 5pm. Other U.S. cities will follow in short order. In its first day, 1100 New York offers have been sold, and 700 Boston offers. The infrastructure for the offers is being provided by IMShopping’s Nimble Commerce.

OpenTable intends to juice demand for the coupons by dropping “get a clue” hints as to the restaurant’s ID prior to the coupon going online – something that might spark additional page views.

Here are this week’s clues:

Boston Secret Spotlight Clue #1: The chef at this hotspot in Boston’s South End learned her culinary techniques from both Bobby Flay and Malaysian street food vendors. Share your best guess here!

New York Secret Spotlight Clue #2: Dine under Midtown’s starry sky, where they’ve mastered the art of infusing classical French technique with American cuisine. Share your best guess here!

‘Sprichst du Yelp?’ Yelp Launches in Germany

Yelp has added to its international portfolio, following up on its May launch in France with a launch in Germany. Berlin and Munich are Yelp’s first German markets. Fifteen additional German markets have been seeded with “scout” reviews, but won;t be fullky turned on for a bit.

These markets include Bielefeld, Bonn, Breman, Dortmund, Dresden, Duisburg, Dusseldorf, Essen, Frankfurt, Hamburg, Hannover, Koln, Leipzig, Nurnberg and Stuttgart. German versions of Yelp for iPhone and Yelp for Business Owners will also be available in the near future.Yelp had previously launched Yelp UK in January 2009 and Yelp Ireland in June 2009.

The German and French services are Yelp’s first non-English language markets. While English speakers may see the Interface in English, the reviews are all in native language and at this point, there is no translation of reviews by non-German and French speakers (i.e. American tourists).

Yelp, OpenTable Team Up; ‘Reservations Without Registering’

OpenTable has affiliate relationships with hundreds of sites, which receive a percentage of OpenTable’s reservation fees in exchange for the link. Diners are treated as regular OpenTable customers. They register and are entered into a Guest Directory, where they are eligible for dining credits etc.

Now, OpenTable has opened its network a bit, allowing registered Yelp users to directly make reservations from Yelp – whether they have registered with OpenTable or not. Users that have registered with both services will automatically get the benefits that OpenTable provides (i.e. dining credits). But they don’t have to.

The immediacy of linking Yelp’s reviews with reservations should prime the pump for Open Table, and get more customers to ultimately register. Among OpenTable’s 11,000 restaurant customers in North America, there probably isn’t a single one without a Yelp review. OpenTable says it also won’t be watering down the comprehensive customer info that OpenTable has on every registered diner (i.e. missed meals, preferences, etc.). They’ll just keep files from the Yelp IDs.

OpenTable, in general, is aggressively moving to bring more diners and restaurants into its system. Another move the company recently made was the launch of Open Table Connect, a Web-based reservation system that restaurants can use in lieu of the core OpenTable system. OpenTable Connect, which is aimed at mid-priced restaurants, such as bistros and sushi houses, costs $49 a month, and $2.50 per diner. More than 82 restaurants are currently signed on.

OpenTable’s moves come as it deals with more competition. CityGrid Media’s Urbanspoon, for instance, has launched two complementary reservation products that undermine OpenTable’s fees – and open new fronts in the battles of Yelp versus Citysearch; and now, OpenTable versus Urbanspoon/CityGrid Media.

The first of Urbanspoon’s new products is Urbanspoon Rez, an online reservations system that is now in 170 restaurants in Los Angeles and Seattle and ready for national rollout. The second is Urbanspoon Rezbook, an iPad based system that directly mirrors OpenTable’s proprietary Electronic Reservations Book computer. Rezbook is now in pilot mode in five restaurants. A new report on Urbanspoon’s strategy is being released today for clients of BIA/Kelsey’s Marketplaces program.

MerchantCircle Index: Mixed Awareness Levels for Local Players


MerchantCircle’s Merchant Index tracks merchant confidence in the economy (low). But it also yields some unexpected “real world” insight into merchant awareness and use of their local online marketing options.

The Index is based on 11,000+ email respondents , so there is likely to be an online bias in the results. Of its 1.1 million registered SMBs, MerchantCircle also has a strong base of rural and exurban members, but MerchantCircle officials don’t believe these businesses are disproportionally represented.

We’re most drawn to the low recognition accorded to many local mainstays that are “big deals” in our cyber capitals. The new LBS services, FourSquare and GoWalla, for instance, have recognition of just 7.5 percent and 5.7 percent each.

The principal city sites do better. Yelp has 39.4 percent while Citysearch has 66.5 percent. The disparity between them is not surprising given the latter’s longer track record and deeper national reach. Yelp’s awareness may be better pegged to its principal cities (i.e. San Francisco, where it is apparently the #1 resource).

The Index found that 26.1 percent of respondents are promoting on Citysearch, and 17.6 percent on Yelp. Google, Facebook and Twitter (among others) are used by more. Google is used by 59.5 percent; Facebook by 52.8 percent; and Twitter by 31.6 percent.

YouTube is a site that the respondents want to start using. 17.5 percent say they want to start using YouTube, while 14.2 percent say they want to start using Facebook.

MerchantCircle VP Darren Waddell is speaking on the New Directory Panel at Marketplaces 2010 in San Diego March 22-24 with Local Matters’ Mat Stover, SuperMedia’s Julie Miller and AT&Ti’s Greg Isaacs.

Yelp Reaches Out to Apartment Managers


Yelp has been a roll, and is now reporting that it gets 29 million unique visitors a month. Given that, the company’s immediate challenge is to move beyond its core base of restaurant and shopping reviews and dive deep for Yellow Pages-arena services reviews, as well as reviews for classified categories, such as autos and real estate/apartments.

Restaurants currently make up 29 percent of reviews, while shopping currently makes up 23 percent. Other major categories include beauty and fitness (9 percent); arts & entertainment (8 percent); home and local services (7 percent); entertainment (5 percent); and nightlife (4 percent).

Apartments are certainly a good place for Yelp to concentrate on, especially given the youthful target sought by apartment managers. Almost half of Yelp’s users (46 percent) are between 18-34 years old, while 36 percent are between 35-49.

So it was no surprise that Yelp COO Geoff Donaker was out evangelizing the cause this morning on a Webinar conducted by NCI’s Apartment Finder, a leading publication for managers of mega-apartment complexes.

The evangelism effort’s a good idea. In a survey before the call, just 35 percent of the Webinar audience said they were already familiar with Yelp, and just five percent said they were already engaged with Yelp as a business owner. Sixty-one percent, however, said they had never heard of it.

Donaker told the Webinar attendees that while he hoped they eventually advertised on Yelp, he was mostly interested in getting them tuned into Yelp as a marketing resource and to get them to access their business owner accounts and improve their pages. He noted that most reviews on Yelp were actually positive ones and they shouldn’t be afraid of the community feedback.

Many apartment managers, however, have cold feet vis a vis reviews due to what Apartment Finder VP of Operations Judy Bellack suggested was “extremely negative” experience with one site in particular: Internet Brands’ apartmentratings.com.

Elevation Buys into Yelp


Bono and Yelp CEO Jeremy Stoppelman

As widely reported last week, Yelp has confirmed that it will receive a $25 million investment from Elevation Partners, which is widely known for the involvement of U2 frontman Bono among its seven partners. Elevation, which manages $1.9 billion, will also seek to increase its total investment to $100 million via stock shares from vested employees and other eligible shareholders.

In a statement, Yelp said it “plans to use the additional funding to deepen its market leadership position throughout the US, accelerate growth in Canada and throughout Western Europe, and continue the development of innovative mobile applications.”

Yelp had been in apparent talks to be purchased by Google for $500 million, but it isn’t clear why the deal didn’t go through (or even if the talks really happened). Elevation’s valuation of Yelp appears to be for less than $500 million.

Elevation is also an investor in Move.com, Palm, Forbes Magazine –all contrarian bets.

Yelp Product Manager Eric Singley is appearing on the Mobile Superforum at Marketplaces 2010 March 22-24 in San Diego.