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Yelp: Revenue Down, Chairman Out

In a slight change of pace, online review site Yelp has been collecting some reviews of its own in the wake of its last earnings report. Unfortunately, the reviews aren’t great.

Though Yelp’s initial sales estimate for 2015 called for $574 million to $579 million in revenue, that figure has shrunk to $544 million to $550 million by year’s end.

The firm cites the elimination of its brand-advertising product and a lower-than-expected sales headcount growth for the diminished figures. Brand advertising will be done at Yelp by the end of the year. The firm says it intends to pursue improved shopper experience and local advertising products in the future.

And then Yelp got some more good news. Early investor and board chairman (and PayPal cofounder) Max Levchin will also be stepping down — reportedly to “pursue other interests.” The board has set no replacement but reports it will take up the issue at its September meeting.

Yelp’s stock took a 16.2 percent hit in after-hours trading on the news of its falling revenue performance. Without a notable rally today, Yelp will be trading at its lowest level since 2013. Investors continue to be troubled by Yelp’s traffic growth and by the announcement that it will no longer disclose monthly visitors — instead seeking to focus on desktop and mobile monthly uniques.

Mobile unique views have contributed to some of the more positive recent news out of Yelp. The site’s mobile uniques were up 22 percent on average (about 83 million views). That represented the first time mobile Yelp edged desktop Yelp, which only saw 79 million unique views.

“Consumers are increasingly turning to apps when using their mobile phones, and we are excited about the growth we’ve seen in app usage which accelerated to 51 percent year over year,” the company said.

Yelp was reportedly in talks about a sale earlier this year, but those talks stalled. Yelp also continues to have a strained relationship with Google, which provides the site with a majority of its viewers via its search tool. Google is now a competitor of Yelp in the local advertising game, and Yelp executives have taken to complaining that Google uses its search engine to direct users toward its local listings — a practice it claims as anti-competitive.

 

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