Photo: Bob Lee via Flickr
Yelp’s first-ever earnings report this afternoon was mixed — revenue came in ahead of expectations at $27.4 million, while its loss-per-share was a bit worse than expected at ($0.31).Compared with Google, Yelp is a flea — Google’s revenue in the same quarter was almost 400 times as much, at $10.65 billion. Its free cash flow, $3.09 billion, will probably be many times Yelp’s revenue for the entire year.
But Yelp did say one thing on its earnings call that ought to make Google a little bit nervous:
We do derive a lot of traffic from search egines, particularly Google. We’ve said in the past it’s about 50 per cent. We continue to see really nice growth there, on the web site, both including direct traffic, people typing in the URL, and navigational traffic …. Then of course on mobile, that represents a very new distribution channel for us, and one where we have a much more intimate relationship with consumer because they’ve chosen to download the app. They’re much more engaged, we’re now a button on their screen. That actually disintermediates search. We like that trend.
Yelp is no friend of Google — last fall, Yelp CEO Jeremy Stoppelman testified that Google basically scraped Yelp reviews to try and boost its own local products, and bumped Yelp out of Google search results after Yelp complained.
But mobile is the fastest growing segment of Internet users. And when users download an app, they no longer need Google to find what they’re looking for.
Yelp likes that trend.
Again, Yelp is tiny compared with Google. But the same story is being repeated with every single consumer web company out there. They all have apps. And as users move more and more toward smartphones, they’re more likely to use those apps instead of searching for the company on Google.