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Yelp: Revolutionizing Local Search with Personalized Reviews and Services

Yelp: An Overview of the Review Giant

As one of the world’s largest platforms for local search personalization, Yelp has turned into a go-to source for millions of users seeking information about restaurants, shops, and various other businesses. In this article, we will explore Yelp’s background, business model, and how it remains a leader in the market.

Yelp’s Background and CEO

Yelp was founded in 2004 by two former PayPal employees, Jeremy Stoppelman and Russ Simmons. Yelp started as an email recommendation service in San Francisco, California.

The company quickly expanded, as Yelp’s founders recognized the need to help small businesses connect with customers in a highly personalized way. Jeremy Stoppelman took the helm as Yelp’s Chief Executive Officer (CEO) since 2005, guiding the company’s growth towards unparalleled success.

Under his leadership, Yelp has grown beyond being just a review site to include other offerings such as food delivery, gift certificates, and reservation services. The company’s innovative approach has led to it becoming one of Silicon Valley’s most successful companies.

Company Details and Financial Information

As of 2019, Yelp operates in 31 countries around the world, including the United States, Canada, Europe, and Asia. The company has headquarters in San Francisco and employs over 5,000 employees globally.

Yelp was founded in 2004 and has gone public, with revenues of over $1 billion. Its net income was around $15 million in 2019.

With these strong figures, Yelp’s success is an even more remarkable feat, given the intense competition in the industry. Yelp’s Business Model

Customer Segments

Yelp identifies three primary customer segments: local businesses, users, and content contributors. This offers a unique value proposition for each group.

Users can browse through an expansive database to find businesses that cater to their specialized needs, be it a gluten-free restaurant or a vegan bakery. Yelp’s search functionality is designed to offer personalized results based on a user’s location, search history, and user behavior.

Local businesses can claim their business’s page and use it as a platform to engage with Yelp users. They can use Yelp’s advertising platform to purchase local advertisements targeted at their desired customer segment, grow their online presence, and attract more customers.

Yelp’s review system provides feedback for local businesses, allowing them to improve their services continuously. Content contributors are users who provide reviews and ratings, which are at the heart of Yelp’s business model.

Over the years, contributors have played a vital role in keeping Yelp’s content fresh, engaging, and relevant. Value Proposition for Different

Customer Segments

Exposure: Yelp provides businesses with an online platform that allows them to showcase their products and services to its millions of users worldwide.

It offers a unique opportunity to businesses to get out the word about their products and services. Engagement: Yelp gives businesses a tool to engage with their customers, receive feedback from them, and collaborate on improving offerings.

Reviews: 92% of users consult online reviews when considering whether to visit a business. Yelp offers a platform for users to provide detailed feedback.

This information is critical for local businesses to gain insights on how to improve and continue growing. Targeted advertisements: Yelp’s Targeted Local

Advertisements allows businesses to connect with potential customers via their own Yelp page and search results with customized advertisements relevant to their location, cuisine, and services.

Reservation: Yelp’s online reservation system enables users to make reservations at local businesses, with no need to call and wait on hold. Yelp’s review platform also allows users to see other customer reviews and ratings for the business before making a booking.

Delivery Services: Yelp’s partnership with GrubHub and other food delivery services enable users to order food from local restaurants and have it delivered seamlessly. Gift certificates: Yelp’s platform enables local businesses to sell gift certificates online, which works well for local shops and businesses in the community.


In conclusion, Yelp’s business model is to empower local businesses while providing users with personalized information about local businesses. Yelp has grown over the years to become one of Silicon Valley’s most successful and innovative companies, providing a platform for different customer segments to interact dynamically.

Yelp has a broad value proposition for users, local businesses, and content contributors, which ensures that the platform remains attractive to users and businesses alike. As local search continues to gain momentum globally, Yelp is undoubtedly poised for success.

Customer Relationships

Yelp’s success can be attributed to its ability to create a self-service platform that allows users and businesses to interact with each other. In this section, we will see how Yelp’s transparency and engagement with customers keep its platform active and how its broad network of partners contributes to its growth.

Self Service Platform

Yelp’s self-service platform is available through the website and its mobile app, making it accessible to users on all devices. Yelp users can find businesses, leave reviews, tips, and upload photos from their desktops, smartphones, or tablets.

Users can also personalize their feeds to include reviews, photos, and other content relevant to their interests. Yelp’s “For You” feature provides users with personalized recommendations based on their recent ratings and reviews.

This creates a more personalized and engaging experience for users, keeps their interest on the platform, and encourages them to leave reviews of their own.

Transparency and Engaging with Customers

Yelp’s review system provides users with an easy-to-use interface to leave ratings and reviews. Users can rate their experiences on a scale of 1-5 and can leave comments as well.

Businesses can respond to reviews directly, providing their customers with an opportunity to share feedback and get a personalized response. Yelp’s review system also includes tips, which go beyond just rating a business and can offer other helpful information to potential users.

Yelp’s review system is transparent, with ratings and reviews visible to all users. This encourages authenticity, ensuring that the platform is trustworthy and transparent.

Users can filter reviews based on the latest ratings, most helpful reviews, and most recent reviews, making it easy to find the information they need. Furthermore, Yelp’s review system allows businesses to monitor their online presence and take necessary actions based on consumer feedback.

Yelp provides businesses with insights into their Yelp pages’ performance, allowing them to analyze the impact of customer feedback on their business.

Key Partners

Content Contributors

Yelp’s most critical partners are its active reviewers and content creators. These contributors add value to the platform, creating a valuable resource for businesses and users.

Yelp’s review system encourages contributions by awarding badges to active reviewers and creators.

Partnerships and Extended Partners

Yelp has partnered with various organizations such as GrubHub, DexYP, Sprinklr, Chatmeter, InMoment, among others, who cater to different business needs. By working with partners, Yelp supports the growth of local businesses and helps them build better online profiles.

These partners can provide additional services, such as online booking, food delivery, social media management, reputation management, in-store feedback and surveys, and much more. Yelp also works with lobbyists, government agencies, such as the Federal Trade Commission to develop best practices for online reviews and transparency in advertising.

Working with Visa, Yelp launched a program to provide free business accounts and advertising credits to small businesses. Working with GoDaddy and Google, Yelp partnered to simplify the process of creating and updating business websites, as well as improving search engine optimization results.


In conclusion, Yelp has come a long way since its inception and has grown to become one of the most significant players in the online review market. Yelp’s self-service platform and its review system enable businesses and users to interact with each other effectively.

By providing transparency and engaging with customers directly, Yelp has built a great reputation for trustworthiness and authenticity. Yelp’s partnership with various organizations that satisfy different business needs, from online booking to food delivery, has helped local businesses grow their online profiles and achieve greater success.

Yelp is a valuable resource for businesses and users alike, and with its partnerships, it will continue to grow and evolve.

Key Activities

Yelp has built a highly engaging, user-friendly platform that has become an invaluable resource to millions of users worldwide. Its key activities are centered around managing network effects, improving customer experience, selling advertisements, and building a strong sales force.

Network Effects

Yelp’s management of network effects is critical to its success. Network effects occur when a product or service becomes more valuable as more people use it, making Yelp’s platform more valuable to users as the network grows.

Yelp’s review system, ratings, and user-generated content drive its network effects. As more people leave reviews and ratings, more businesses claim their pages and respond to reviews, making the platform even more valuable to customers.

Yelp’s algorithm for displaying search results factors in the number of reviews, ratings, and authenticity of the content to provide a more personalized experience to users.

Customer Experience and Ad Selling

Yelp places particular emphasis on improving customer experience. By providing users with a personalized experience that uses advanced algorithms to serve relevant content, Yelp is able to ensure customer satisfaction.

Selling advertisements is another significant activity for Yelp. Yelp’s sales force works with businesses to identify their ad needs and make recommendations that can boost their online presence.

The sales team also helps businesses target their ideal customer demographic and improve their online visibility, thus making it easier for customers to find them. Ad sales account for a significant portion of Yelp’s revenue.

Selling advertisements allows Yelp to continue providing a free platform to users to access reviews and ratings.

Key Resources

Employees and Skilled Workforce

Yelp’s success depends heavily on its employees and skilled workforce. The company has an extensive employee base that includes skilled professionals in software development, engineering, data analysis, and product management.

Yelp’s best resource, however, is its high-performing workforce, which is continually improving the platform technology and ensuring the delivery of high-quality products and services. Yelp has invested in the latest technology to satisfy users who depend on the platform’s performance.

Additionally, Yelp has set up training and development programs to upskill its employees, ensuring that they stay current with the latest technological advancements, product development, and service offerings. Yelp encourages its employees to contribute to open source platforms, which contributes to a vibrant tech community and facilitates knowledge sharing.

High-Quality Content and Engaged Communities

Yelp’s content is authentic, reliable and easy to use, which offers a competitive advantage over rival online review platforms. Yelp’s highly engaged communities of reviewers and content creators create a vast pool of user-generated content on the platform, which induces network effects and helps boost Yelp’s authority as a reliable source of information.

Content creators and active reviewers are essential resources for Yelp’s platform. The platform features a system that encourages contributors by rewarding them for creating outstanding content.

Yelp also has content guidelines in place to ensure the authenticity and reliability of the information provided. These resources create a vibrant and reliable community that can build trust in the platform, leading to more users and businesses using Yelp as their preferred review platform.


Yelp’s key activities and resources revolve around managing network effects, improving customer experience, selling advertisements, and building a highly skilled workforce dedicated to platform technology and product development. Yelp’s platform’s content relies heavily on active reviewers and content creators, with a focus on authenticity and reliability that differentiates it from its competitors and helps to establish it as a trusted source.

Yelp’s focus on maintaining these key activities and resources has contributed to its continued success as one of the world’s leading platforms for local search and personalization.


Yelp utilizes various channels to reach its users and engage with them effectively. Its main channels include the self-serve website and app, as well as social media and email marketing.

Self-Serve Website or App

Yelp’s self-serve platform is the core channel through which users interact with the company. Users can access Yelp through its website or download the mobile app, providing them with a seamless and convenient experience to search for businesses, leave reviews, and engage with the community.

The website and app are designed to be user-friendly, allowing users to easily navigate through different categories and filters to find the businesses and information they need. Users can also personalize their feeds to see content that aligns with their preferences and browsing history.

The self-serve platform is essential to Yelp’s business model, as it allows users to contribute to the platform’s content, ensuring a broad and diverse range of reviews and insights for businesses and other users.

Social Media and Email Marketing

Yelp also leverages social media platforms and email marketing to connect with its users. Yelp maintains an active presence on social media, primarily on Facebook, where it has pages dedicated to different communities and businesses.

On its Facebook pages, Yelp shares interesting and informative content related to local businesses, events, and promotions. This helps users stay engaged and informed about what is happening in their local communities and encourages them to explore and interact with businesses on Yelp’s platform.

Email marketing is another channel used by Yelp to engage with users. Yelp sends regular newsletters and updates to its users, providing them with curated content, personalized recommendations, and exclusive offers from businesses in their area.

These emails help keep users engaged with the platform and encourage them to continue using Yelp and contributing to its growth.

Cost Structure

Cost of Revenue

Yelp incurs various costs related to generating revenue. One significant cost is credit card processing fees.

When users make bookings or purchase gift certificates through Yelp, the company incurs fees associated with processing these transactions. Web hosting fees are also a part of Yelp’s cost structure.

As a platform that handles massive amounts of user-generated content, Yelp must invest in robust web hosting infrastructure to ensure that its website and app are fast, reliable, and able to handle high traffic volumes.

Sales and Marketing

Sales and marketing expenses are an essential part of Yelp’s cost structure. Yelp employs a sales force that works with local businesses to help them navigate the platform, claim their pages, and set up ad campaigns.

These sales representatives earn commissions for the sales they generate, which is a key expense for Yelp. Customer acquisition cost is another significant cost for the company.

Yelp invests in advertising and promotional campaigns to attract new users, increase brand awareness, and encourage user engagement. These costs include online advertising, offline marketing activities, and partnerships with other businesses to drive user acquisition.

Product Development

To ensure a top-notch user experience, Yelp invests in product development. This includes salaries for engineers and technical staff who work on developing and maintaining the website and app.

Yelp also engages in external consulting to access specialized expertise or to support specific development projects.

General and Administrative

General and administrative costs cover a range of expenses necessary for Yelp’s day-to-day operations. This includes employee salaries, benefits, and training programs.

Yelp also incurs legal fees to protect its intellectual property rights, handle regulatory matters, and ensure compliance with data privacy laws. Additionally, the company bears costs related to office maintenance, rent, utilities, and other administrative expenses to support its operations.


Yelp utilizes a variety of channels to engage with users, including its self-serve website and app, social media platforms, and email marketing. These channels help Yelp build strong connections with its user base and keep them engaged with the platform.

In terms of its cost structure, Yelp incurs expenses such as credit card processing fees, web hosting fees, sales commissions, customer acquisition costs, product development costs, and general administrative expenses. These costs are necessary to maintain the quality of Yelp’s platform, drive revenue generation, and support its day-to-day operations.

Through its effective channels and cost management, Yelp continues to provide a valuable resource to millions of users and businesses around the world.

Revenue Stream

Yelp has developed a diversified revenue stream through various channels, including advertisements, transaction revenue, and other services. These different revenue streams contribute to the company’s financial success and allow it to continue providing valuable services to users and businesses.


Paid advertising is a significant revenue stream for Yelp. Businesses have the opportunity to promote their products and services through various ad formats on Yelp’s platform.

These include a branded profile that showcases a business’s unique offerings, an enhanced profile that highlights the business in search results, and a Yelp verified license that verifies and displays valid licenses for certain industries. Search ads are another form of paid advertising on Yelp.

These ads appear at the top of Yelp’s search results when users search for specific keywords related to businesses. This prominent placement ensures that businesses can reach their target audience effectively.

Yelp also engages in ad resales, where it takes a portion of the revenue generated from reselling ads on partnered networks such as Google and Yahoo. This strategy allows Yelp to extend its advertising reach beyond its platform, expanding its revenue potential.

Transaction Revenue

Transaction revenue is an essential component of Yelp’s revenue stream. Yelp’s platform offers various transactional services, including food delivery and online reservations, which generate revenue through partnerships and other means.

Through its partnership with Grubhub, Yelp offers a seamless food delivery service to users, giving them the option to order food from local restaurants directly through the Yelp platform. This transaction revenue is generated through commissions on orders placed through the Yelp app or website.

Yelp also earns transaction revenue through Yelp Deals, a feature that offers exclusive discounts and promotions from local businesses. When users purchase these deals, Yelp receives a portion of the revenue generated.

Additionally, Yelp’s gift certificate program allows users to purchase gift certificates from featured businesses. Yelp receives a percentage of the gift certificate revenue, providing an additional revenue stream for the company.

Other Services

In addition to advertisements and transactional services, Yelp offers various other services that contribute to its revenue stream. Yelp Reservations is a service that allows users to make online reservations at local restaurants.

Yelp charges a fee to restaurants for each reservation made through the platform, providing an additional revenue source. Yelp Waitlist, introduced in 2017, enables users to join waitlists remotely, eliminating the need for physical waitlists at restaurants.

This service aims to improve the overall dining experience, and Yelp charges restaurants a fee for each party seated through Waitlist. Yelp Wi-Fi Marketing leverages Wi-Fi networks in businesses to provide targeted advertising and marketing opportunities.

By partnering with businesses, Yelp can offer customized marketing strategies and charge fees for these services. Yelp Knowledge is a platform designed to provide businesses with insights, data analytics, and other tools to enhance their online presence and attract more customers.

This subscription-based service generates recurring revenue for Yelp. Furthermore, Yelp continues to explore other partnerships and revenue-generating opportunities, such as collaborations with payment processors, as well as strategic alliances with industry-specific service providers.

These partnerships allow Yelp to expand its range of services and revenue potential.


Yelp’s revenue stream is diversified, with a combination of advertisements, transaction revenue, and other services contributing to its financial success. Paid advertising on Yelp’s platform provides businesses with an opportunity to reach their target audience effectively.

Transaction revenue is generated through partnerships in food delivery, online reservations, deals, and gift certificates. Other services, including Yelp Reservations, Yelp Waitlist, Yelp Wi-Fi Marketing, and Yelp Knowledge, provide additional revenue streams.

Through these revenue channels, Yelp can continue offering valuable services to users and businesses while ensuring the company’s financial growth and success. In conclusion, Yelp’s success and growth can be attributed to its self-serve platform, which allows users and businesses to interact effectively.

With a focus on transparency, engagement, and the creation of authentic content, Yelp has built a trusted platform that is cherished by millions of users. Through partnerships and various revenue streams, such as advertisements and transaction revenue, Yelp has established a strong financial foundation.

The importance of user engagement, customer relationships, and the value proposition offered to businesses through targeted advertisements, online reservations, and other services cannot be overstated. Yelp’s ability to consistently deliver a personalized and valuable experience is a testament to its commitment to customer satisfaction.

As Yelp continues to innovate and expand its offerings, it remains at the forefront of the local search and review industry, providing an indispensable resource to users and businesses alike.

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