Yelp Upgrades Search With New Filters Though Stock Still Wildly Expensive

Yelp (NYSE:YELP) is one of the largest online business search, review and recommendation services, which enables consumers to access ratings and read reviews and opinions about local businesses like hotels, restaurants, salons, dentists and mechanics on its website. It generates revenue mainly from local business advertising, display advertising and from additional services like Yelp deals, and deals with reservation services like OpenTable (NASDAQ:OPEN). It competes primarily with other online business review services like Google (NASDAQ:GOOG) Places, Yahoo (NASDAQ:YHOO) Local, Angie’s List, CityLocal and Gumtree.

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Yelp has upgraded the search features on its service, adding some advanced search filters which help users to find local businesses based on their preferences and demographic stats like age. The first two new filters are “Liked by Vegetarians,” which enables vegetarians to find restaurants that have been liked by other vegetarians, and “Liked by X-Somethings,” which enables them to find local businesses that are popular with customers in certain age groups. ^[1]

With improved search, Yelp aims to offer better discovery experience to its users by providing more relevant results. This should eventually lead to higher engagement and usage levels, that will help it drive its local and brand advertising revenue, which account for around 65% of its total value.

We currently have a $10 Trefis price estimate for Yelp, which stands nearly 60% below its market price.

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1. Yelpy Insights: Yelp Adds Two New Search Filters, Looks To Add More, Search Engine Land [↩]