The Wall Street Journal is reporting that Yelp is working with investment bankers and has “been in touch with potential buyers” to explore a sale of the company. Yelp’s market cap is just under $3 billion with a sale potentially in the $3.5 billion range (or above) according to the publication.
The anonymous sources cited in the article said, however, that a “deal is not imminent.”
Prior to its IPO Google unsuccessfully tried to buy the company for more than $500 million. It would be interesting to see if Google gets involved in any bidding that could happen — if this is real.
In addition to Google, the usual suspects (e.g., Microsoft, Yahoo, Facebook) as well as travel companies such as Priceline would potentially be suitors for the reviews company. Given Apple’s relationship with Yelp, I would imagine they would be a serious contender as well.
Last quarter Yelp reported revenues of $118.5 million. That represented 55 percent revenue growth; however investors were still disappointed by those results. The exploration of a sale indicates the company may not have confidence in its long-term growth prospects.
Among the numbers disclosed in the Q1 earnings release, Yelp said that it has 77 million total reviews and 142 million unique users. It also reported more than 90,000 local advertisers.