Yelp Looks for Exit Strategy – Will Apple or Google Bite?
The Wall Street Journal has reported that Yelp are looking to sell, and could fetch a price of over $3.5 billion
Yelp is reportedly working alongside a group of investment bankers in order to find a potential buyer for the company. Yelp’s market cap is said to be in the region of $3 billion, and the company could go for as much as $3.5 billion, according to the WSJ.
According to the anonymous source that has been quoted within the article, the deal is not yet set in stone, however there is a concrete desire to make the sale.
Google have in the past attempted to by Yelp for as much as $500 million, but with no success. Google may however look to participate in the bidding to acquire the review site.
Other interested buyers will likely include other big players such as Yahoo, Facebook, and Microsoft; in addition to tabel companies like Priceline. As Apple already have a relationship with Yelp, they will likely also show and interesting in placing a bid.
Yelp’s revenue is continuing to grow – so why the sale?
Yelp has accumulated over 77 million reviews, along with 142 million unique users, and accordingly Yelp’s revenue has continued to grow steadily, and was reported as being $119 million in the last quarter (a 55% growth). But shareholders have not been impressed with the growth rate. With the realisation that the company will not yield as great a return on their investment as hoped, and that it possibly does not have the growth potential that was estimated, investors appear to be looking to exit relatively quickly.
But how serious are they about selling? And do you think Google will snap up Yelp, or will one of the other billion dollar heavy-weights get there first?