Google vs. Yelp: A Zero Sum Game

The founders of Yelp, the same company that rejected a $500 million acquisition offer from Google two years ago, must be feeling absolutely fantastic about their first day trading on the stock market. But Google hasn't given up trying to take over the listings business.

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The founders of Yelp, the same company that rejected a $500 million acquisition offer from Google two years ago, must be feeling absolutely fantastic about their first day trading on the stock market. At the time of this posting, the share price had sky-rocked over 70 percent from the price of its initial public offering, though it's settled down to around 60 percent up by midday. Yelp -- which managed to snag the very cool YELP ticker symbol at the New York Stock Exchange -- ended up making $107.25 million, giving the company a valuation of nearly $900 million.

This, for a company that's been bleeding money as it faces stiff competition from everyone from Foursquare to its would-be parent Google. On that note, we just can't stop wondering what Google must be thinking about its strategy to compete with Yelp after their acquisition offer was refused. The GOOG's been buying up companies related to local reviews and recommendations for years, so we thought it would be helpful to see how they're doing in assembling their own Yelp-killer. (If you read and empathized with our post yesterday, "A Beginnger's Guide to Quitting Google," you might want to consider reading no further.)

Google Maps

Yelp doesn't stand a chance of competing with Google in the maps space. Long story short: Because it requires satellites and licenses, making an interactive map from scratch is prohibitively expensive.

Perhaps understanding their dominance, Google's been folding all of their local reviews and recommendation features into their Maps product. Light on caffeine this morning, we tried to find a cool coffeeshop nearby. WIth four keywords, three clicks and about two seconds, we did just that.

While it lacks the robust social element that Yelp is famous for, we didn't really care what other people said about the coffee shop. We just needed our fix and a warm room to consume it in. That said, since Google recently acquired the very prestigious and well renowned guidebook company Zagat, we're sure more reviews will be on the way. And since we're on the topic, it's worth mentioning that the brand of recommendation still matters to a lot of people. We don't care what our fellow Brooklynite Cody has to say about the new sushi place down the street, because we don't really know if he has any idea what he's talking about.

One more thing: the new Google Street View that lets you virtual walk into and around local business is amazing.

Google Latitude

You've probably heard of Foursquare, but did you know that almost ten years ago the startup's co-founder Dennis Crowley created a similar service for mobile phones called Dodgeball?

Google bought Dodgeball in 2005 for an undisclosed sum, and integrated it into its then little-known Latitude product. Latitude is basically a tracking device in which you can give your friends permission to see where you are at any given time automatically updating (via a an iPhone and Android app for mobile stalking) you location. But it also has a less invasive mode, in which user can, just like on Foursquare and Yelp and Facebook and lots of other sites now, check in manually and leave a message.

What's not clear is whether Google still tracks your location even if you have selected the option to remain "invisible" to your friends. One would have to read the fine print of Google's (recently updated) privacy policy to know for sure. Sound like fun? We don't think so.


Obviously, we have to pay a visit to Google's much blogged about social network, if we're going to draw any comparisons between GOOG and YELP.

But we're not going to spend too much time talking about Google+ -- it's been done. The Atlantic Wire's own Rebecca Greenfield wrote recently about how Google+ hasbecome a bit of a ghost town. Everybody on the Internet seems to have their own theory about Google+'s declining traffic and waning engagement, but as Rebecca points out, Google's not done with Google+ yet. We've yet to see Google+ completely integrated into most of Google's 46 listed products, not to mention Latitude and Maps. Will it be cool, when they do? We don't know. Maybe. Will we be using Google+ in the meantime? Probably not much more than we've been using it in the past.

All that said, we don't even remember the last time we looked at our Yelp profile, and we've never written a review.

Frankly, it's a bit of an unfair game to pit Google against Yelp. Google is a company that's built around search, and -- for better or worse --- it's also one that's rooted in the 1990s, when it was founded. Like Google before it, Yelp is an example of startup success story, except it all happened in the era of the social web. The company's been great at building a useful model for building crowdsourced directories of restaurants, bars and stuff. They're often as good if not better than the directories that Google's now building. But we'd bet a buffalo nickel that Google and it's bajillion dollars of revenue will keep getting better. Heck, maybe they'll call their old friend Dennis Crowley, and try to buy Foursquare (if they haven't already). So enjoy the day, Yelpers. The competition is coming on strong.

This article is from the archive of our partner The Wire.