Yelp has been facing many problems as its first quarter sales have disappointed one and all. Yelp is finding it difficult to compete with bigger internet companies for digital advertising. There are chances for Yelp to be sold out in the market hence. However, Yelp did not comment on the rumor that’s spreading like fire in the woods.
According to Jeffries analyst Brian Pitz, Google Inc. may prove to be the most logical buyer for Yelp. The other candidates that are in the race for buying Yelp are Facebook, Yahoo and PricelineGroup Inc.
The possibility of a sale emerged up after the disappointing first quarter sales of Yelp. This did not go well with the investors and they got disappointed heavily. The slumping stock of Yelp also lost half its value in a matter of just eight months. This is an alarming sign for Yelp and the investors have acknowledged it too. However, the stock of Yelp bounced back on Thursday by rising 23 percent and closed at $47.01.
Based on the company’s market value, Yelp can fetch close to $4 billion with its sale. It can prove to be an attractive takeover candidate because of its review service. The consumers looking for restaurant recommendations and suggestions, mostly go for the services of Yelp. It is a free online service company. The revenue that the company makes is through advertising. Companies like Facebook, Yahoo among the others are eyeing on purchasing Yelp.
An attempt for the purchase of Yelp had already been made by Google in 2012 when the company went public. Google offered Yelp a whopping amount of $500 million, but the CEO of the company Jeremy Stoppelman denied it. He was also warned by Steve Jobs that if Yelp falls into the hands of Google, it would not remain to be a great company.
Yahoo is opting for boosting up its advertising sales and hence, it could take over Yelp for the purpose. We will have to wait to see how Yelp manages its sales letdown and who takes over the company in the coming days.