Earlier this year consumer review site Yelp was reportedly exploring a sale as it continued to struggle with sluggish user and advertiser growth. Despite the popularity of the site and its position at the top of many web searches, the San Francisco-based company was rumored to be looking for a buyer.
But sources with knowledge of the matter told Bloomberg yesterday (July 2) that although Yelp hired Goldman Sachs to help find a potential buyer, it has decided to put a hold on the pursuit of a sale.
While the company has had several interested suitors, it will no longer continue a transaction in the immediate future, the sources said, adding that the company may look to find a deal again if cofounder and CEO Jeremy Stoppelman changes his mind.
As of 2:05 p.m. yesterday in New York, Yelp’s stock dropped 12.2 percent to $37.26, putting the company’s market value at about $2.8 billion, Bloomberg confirmed.
When contacted for a statement on the reports, a Yelp spokeswoman told Bloomberg that the company does not comment on rumor or speculation.
While Yelp has amassed hundreds of millions of consumer reviews, it has struggled with a similar issue experienced by other locally keyed in firms — monetizing a localized business model. But the company, which has continued to expand in different ways through various acquisitions to its platform, still seems to be waiting to get things right.
Whether Yelp is on the chopping block or not, people familiar with the situation told Bloomberg back in May that management may be more convinced to sell the company to an acquirer with the ability to help convert reviewers into customers making transactions.
According to Bloomberg, about 1.5 million transactions have been completed on Yelp as of April, but that number pales in comparison to the 142 million average monthly visitors the company received in the first quarter from both mobile devices and computers.