Yelp gorges on mobile ordering with Eat24 acquisition
In a reflection of the quick growth in the mobile ordering space, local business search engine Yelp has acquired Eat24 for $134 million.
Yelp’s business continues to expand, with the company recently reporting that revenues totaled $110 million in Q4 of 2014, up from $71 million in Q4 of 2013. With Yelp’s strong user base, a logical next step for the platform is to grow its mobile ordering roots.
“Yelp is about connecting consumers with great local businesses and our local search offering performs even better on mobile, as many consumers search for local businesses on the go, and we can use geo-targeting to improve the results we serve,” said Vince Sollitto, vice president of corporate communications and public policy at Yelp, San Francisco. “Additionally, like many businesses, we are seeing a transition of our customer base to mobile, and we find our mobile users are our most highly engaged users.
Surprise and delight
The transaction of the acquisition has been valued at approximately $134 million, consisting of approximately 1.4 million shares of Yelp Class A common stock and $75 million cash. The transaction, which was approved by the boards of directors of both companies, closed on Feb. 9, and the purchase price will be recorded in Yelp’s first quarter 2015 financial statements.
Yelp is making several adjustments to its previous outlook for the first quarter and full year of 2015, including increasing its revenue outlook and expects net revenue to be in the range of $118.5 million to $120.5 million.
Eat24 was founded in 2008 to expand online food ordering while aiming to provide an improved customer experience. Eat24 provides approximately 20,000 restaurants in over 1,500 cities nationwide with the ability to offer online delivery and takeout services.
Yelp continues to impress on mobile. As of Q4 of 2014, the platform currently hosts 72 million unique visitors, which is a 37 percent year over year increase from last year. In Q4 of 2013, Yelp hosted about 53 million mobile users per month.
Yelp’s mobile users especially appreciate the review, directions and click-to-call options on its app. Yelp has seen about 45 percent of new reviews from mobile, about 34 million clicks for directions and about 48 million clicks to call.
Expanding on mobile
Yelp has made several other big moves in the last year, including extending booking capabilities on mobile into wineries via an integration with CellarPass, a digital reservations system designed for winery, brewery and distillery tasting last summer.
The partnership marked the first-ever integration of a reservation-based platform into Yelp’s new transaction platform. Mobile users that booked tours and tastings experienced all of the benefits familiar to regular CellarPass users, including real-time availability, instant confirmations, and reminder emails, all without ever leaving the Yelp site (see story).
Earlier last year, in the latest endorsement of the growing role for Bitcoin at the time, business listings on Yelp could begin to indicate if a merchant accepts the digital currency as a payment method.
The reviews site and mobile application added the new attribute to its business listings as another way to make them more useful for consumers and businesses. The move was an attempt for Yelp to differentiate itself in the increasingly competitive location-based services space (see story).
“Online food ordering is still in its early days as an industry but we believe it, too, fits naturally on mobile as does local search,” Mr. Sollitto said.
Caitlyn Bohannon is an editorial assistant on Mobile Commerce Daily, New York