Buyout Bait Tech Stocks: Yelp (YELP)
Messaging is one of the core functions of mobile, which is a key reason Facebook spent so much on WhatsApp. Well, local reviews and information are another core function, and the dominant player in that space is Yelp (YELP).
Yelp also is growing rapidly, at least on the top line. In its most recent quarter, YELP grew revenues by 72% year-over-year to $70.7 million and shrunk its net loss from 8 cents per share to 3 cents. During this period, Yelp’s monthly active users improved by 39% to 120 million.
There’s no arguing that Yelp is a potential buyout prospect … it already has fended off several buyout offers, including (again) Google. The search giant likely views Yelp as attractive because its own efforts in the industry have lagged.
However, to me, the most interesting buyer could be Facebook. While it doesn’t seem like a direct one-for-one with what Facebook currently does, and again, while Zuck has said the powder will stay dry for a bit, YELP very much aligns with Zuckerberg’s mission to dominate mobile. Facebook’s endless data combined with Yelp’s own information and services could make a formidable pairing.