Yelp Inc (YELP) Versus Google Inc (GOOGL) Plus Review Growth: Piper Jaffray


Gene Munster, managing director and senior research analyst at Piper Jaffray, weighed in today with a research report on Yelp Inc (NYSE:YELP) and Google Inc (NASDAQ:GOOGL). The analyst measured Yelp and Google Plus review growth of 500 places in 20 major cities in the U.S. on a monthly basis. The goal is to measure the consumer review trends between Yelp and Google Plus.

Munster noted, “Thus far in the June quarter, the total number of Yelp reviews grew 3.9% from end of March 2015 to today, which is slightly below Google Plus review growth at 6.0%. Although review growth in Yelp is slower, we note that the 500 places on Yelp contain 5.3x more reviews vs. Google (87,971 on Yelp vs. 16,498 on Google Plus). Yelp’s review dominance remains, in our view.”

The analyst continued, “In our update of tracking of the number of reviews on Yelp compared with Google Plus, our data shows that Google Plus is growing reviews quarter over quarter by 6% vs. Yelp at about 4%. This compares to our March 2015 survey, which showed Google Plus growing at 4.7% and Yelp at 5.7%. While mathematically Google Plus is gaining on Yelp, we note the pace of growth (6% vs. 4%) is similar and the review landscape remains unchanged with Yelp still dominate. If Google Plus review growth were to accelerate with Yelp review growth unchanged over a 6-12 month period we would be more cautious on Yelp’s fundamentals. At this time, we see no reason for concern.”

In his report, the analyst reiterated a Neutral rating on Yelp Inc. with a price target of $46, which represents a slight downside potential from current levels.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Gene Munster has a total average return of 27.0% and a 70.7% success rate. Munster has a -9.5% average return when recommending YELP, and is ranked #1 out of 3610 analysts.

 

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  • DavieLand

    One has to wonder how long an analyst can maintain the #1 ranking when recommending Yelp with a -9.5% return. When Yelp indirectly “pays” Elite Yelpers to post reviews and Google does not, this metric is meaningless. A comparison of trust, customer satisfaction and reputation might find that Google rates 8x better than Yelp.

  • EIDALM

    Yelp business model is wrong,according to Forbes ,they use unethical extortion against small business to coerce them to pay add money ,but if the business refuse to pay yelp ,all of the positive reviews are wiped out or never posted while lots of negative reviews appears ,and what is even worse most of these negative reviews are fake and bogus reviews written by the so called yelp elite , in our case in the year 2006 yelp send a salesman who demanded to pay them three thousands dollars each month , when w2e refused , yelp created a page for our business EIDS TV without our permission ,and since then they removed or never post near all positive reviews while slamming us with a total of 14 horrible reviews all are fake most written by people who have never been in our business …Since the year 1973 when our consumer electronics was established we sold over one hundred million dollars worth of products ,but those 14 fake bogus reviews near destroyed our business …I contacted yelp om many occasions ,but I was told that the only way to have them remove the bogus or even to talk to me is to pay for advertizing ,when I showed my dismay and expressed my opinion about their extortion tactics to few of their sales people ,next day their phone extension was disconnected ….It is real shame for all people who invest money into this criminal company yelp which harmed thousands of small business and destoyed many ,because the refused their extortion demand.

  • Yelp law suit

    Kimzey v. Yelp Inc. – Opening Brief
    ( See Google Search )
    Extortion – Libel – Unfair Business
    2015 Pending
    Federal Lawsuit – Seattle – San Francisco

  • JonInCa

    In 10 years Yelp has reported a profit *one* time – largely due to tax manipulation. Revenues are slowing. Expenses are increasing. Significant investments in International acquisitions have yielded an insignificant return (3% of revenues coming from outside the US). Yelp has managed their business like a frat party. Lavishing attention on their favored (Elite) users with literally free food/booze/swag yet ignoring the chorus of complaints from business owners (who make up 80% of Yelp’s revenues). The solution from Yelp? Cost-per-click pricing! That’s right — charging businesses for every click. What could go wrong? Bots spamming the yelp application. Yelp users boosting their clicks in pursuit of the “Duke” or “King” royalty designation (users clicking on businesses pretending to “check-in” but never patron the business). Does Yelp care this fraudulent activity happens? NOPE. Yelp gets paid for every click – real or fake. And.. Increased Yelp activity (even if it’s fake) gives Yelp positive news to sell in the quarter reports. Three words: House. Of. Cards.

  • ram

    yelp and isis is same. thug and crooked. isis muslim killed human being mercilessly whereas yelp kills businesses unless you pay them ransom. i do not. pay penny to yelp, yelp is kiiling our very small businees, yelp wants money from us . if the justice system of america cannot thug yelp. somebody must come forward to stop. stp yelp cruelty.

  • martinw392

    Yelp is a notorious legalized extortion racket, they use other peoples trademarks and business identity without their permission to 1st hurt them by making them look bad on the same limited internet pages businesses use to advertise then call them and ask them for money to make them look good once again, they are the most crooked thing since the mafia! they are scum and should be shut down, have some morals and do not invest in this company that hurts so many!!