Earlier today, a source familiar with Google’s negotiations with Yelp told us the talks fell apart because Yelp leaked the negotiations to the press.
We speculated that Yelp had leaked the deal to try to jack the price up (a common tactic) and that, by authorizing this leak and blowing up the deal, maybe the company’s superstar banker, George Boutros of CSFB, had uncharacteristically screwed up.
And we still consider that a reasonable possibility.
But now, a George Boutros defender has emerged, telling us there’s no way Silicon Valley’s most renowned banker would have bumbled his way into blowing up a deal to sell Yelp to Google for $550 million plus earnout.
“Nobody earns a reputation as the best banker in Silicon Valley by bluffing,” the Boutros defender says.
The Boutros defender also insists that Yelp held up Google because it had another offer on the table…but refuses to say what this offer was or which company or investor made it. (The NYT invoked a $750 million number, but also shared no details on who the other bidder might be.)
Assuming the Boutros defender is not hallucinating, who could Yelp’s mysterious third-party acquirer be?
Here are some thoughts, in increasing order of likelihood:
Apple? Apple has the cash, but we don’t see the fit at all.
IAC? Barry Diller doesn’t pay big prices for hot companies.
Microsoft? This seems very likely, but a source close to Yelp tells us no.
AOL? Wee do see these sorts of acquisitions in AOL’s future, and the local play is a great fit. But Tim Armstrong promised no “Hail Marys,” and this would certainly qualify as one.
Facebook? Facebook revenues are finally taking off because brand advertisers love their Facebook pages and are willing to buy Facebook ads to drive traffic to them. Maybe Facebook looks at Yelp Pages and sees a similar opportunity in local advertising. This would have to be an all-stock or half-stock deal.
Yahoo? Yahoo would be a good fit, but is Carol ready to spend that much money?
The public? A source says Yelp investors are pushing for an IPO. This makes the most sense.
So, yes, it seems possible that Yelp had a $750 million offer on the table from Facebook, Yahoo, or maybe even AOL. But if this offer was solid, we suspect Google would have matched.
More likely: there will be no acquisition, but a big fundraising. Yelp was in the middle of raising a round when it started talking to Google. Maybe talk of the deal drove up the valuation.
Note: We talked to All Things D’s Peter Kafka about some of this stuff and he was very helpful. Go read his excellent coverage →