yelp final
TRANSCRIPT
GROUP 7 | INÊS OLIVA | JOÃO LAMARÃO | NUNO LOURISELA | RICARDO CANAS
MANAGEMENT INFORMATION SYSTEMS
A G E N D A
Industry Analysis
Market Trends
Porter 5 Forces
Yelp
Business Model
Competition
Competitive Advantage
Value Chain
Revenue Model
The Future
I N D U S T R YA N A LY S I S
Every business wins and loses new customers every
day before the potential customer even sets foot out
the door.
With so many businesses to choose from, being number
one on Google is almost never the only deciding
credibility or trust factor.
ONLINE LOCAL BUSINESS RATINGS AND REVIEWS PLATFORMS
These days, you’re dealing with an educated customer
who does their research and does not care what you
have to say about your business: they care what
others have to say.
Welcome to the word-of-mouth marketing
I N D U S T R YA N A L Y S I S
I N D U S T R YA N A L Y S I S
72% of consumers trustonline reviews as much as
personal recommendations
52% said that positive online reviews make them more likely to use the local
business
16% of consumers said they used the Internet
every week to find local businesses (vs. 9% in 2010)
27% of consumers regularly use online
reviews to determine whether a local business is a good business (vs. 22% in
2010)
There’s a decline in the number of reviews being read by consumers – they
are forming opinions faster and trusting reviews
more.
The continued growth of mobile internet usage
suggests that more and more consumers will be
searching and finding local businesses online
I N D U S T R YA N A L Y S I S
YELP
Y E L P
an online platform with ratings
and reviews of local businesses
Y E L P
Connecting people with
great local businesses
Businesses, both small and large, use ourplatform to engage with consumers at the
critical moment when they are deciding whereto spend their money.
Y E L P
Founded in 2004 to help find great local businesses like dentists and mechanics, and can be used to find events, lists and to talk with other yelpers
As of January 2013, Yelp
reached 100 million unique visitors on its
website
In 2012, the mobile app was
used by 9.2 million people
Yelpers have written over 36
million local reviews
Every business owner (or
manager) can setup a free
account to post photos, video and message his customers
Yelp makes money by selling ads to local
businesses and brand advertising
You can access Yelp via iOS, Android, Blackberry and other mobile OS’s
Yelp is traded on the New York Stock Exchange
Y E L P
Y E L P
Net loss for the full year of
2012 was $19.1 million, or $0.3
5 per share, compared to a net loss
of $16.9 million, or $1.10 per share, for the comparable period in 2011
Total net revenue of
2012 was $137.6 million, an
increase of 65% compared to $83.3
million in 2011
Active local business
accounts grew 68% year over
year
Average monthly unique
visitors grew 31% year over
year
Cumulative reviews grew 45% year over
year
%
Y E L P
TECHNOLOGY
Search and Ranking Technology Review Filter Mobile Solutions
Network Security Internal Management Systems
Y E L P
ARCHITECTURE
EAI – Enterprise Application Integration
ERP CRM SCM
Y E L P
Y E L P
SELLING ADS TO
Local businesses Brands
80% 15%
Others
5%
Y E L P
Y E L P
TARGETED LOCAL ADVERTISING
Advertise on Yelp search
Advertise on related businesses
Removal of competitor ads
Y E L P
9.2M Mobile devices
2012 Q4 Total Yelp Searches
Integrated Mobile Ad
Y E L P
Y E L P
Y E L P
Y E L P
Key Partnerships Key Activities Value Propositions Customer Relationships
Key Resources
Customer Segments
Channels
Cost Structure Revenue Streams
Companies
Software Development
Selling adds to Local business
BrandAdvertisement
Local Business Costumers Profiles
Internet
Staff
Advertising for companies
Software
Screening Reviews
IT Infrastructure
Microsoft’s Bing
Giving the opportunity for
Local Business to Advertise
IT Infrastructure
IT infrastructure
Y E L PIn
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Firm Infrastructure
Human Resource Management
Technology
Procurement
Serv
ice
Human Resource ManagementHigh qualified workers
Technology Research & Development – most important function to be always improving
OperationsUsing the activities developed at the stages of support activities will promote the final service
Serviceactivities that maintain and enhance the product's value including customer support (feedback and advice)
Y E L P
Y E L P
Coverage
Review Trust
Search rating system
Community style
Easy to use/design
Connection with other platforms
VALUABLE
RARE
INIMITABLE
NON-SUBSTITUTABLE
Free handy guide for local businesses.
Not many platforms have so many user-generated reviews.
Yelpers experience – not a mobile-only experience (content provides website engagement)
Industry/Sector coverage
Y E L P
Y E L P
S T R E N G T H S W E A K N E S S E S
O P P O R T U N I T I E S T H R E AT S
100 million monthly users (network effect) Users generate the content Low costs (operational) Local reviews aligned with social network Peer feedback mechanisms Placement of the popular reviews Integration with mobile devices Augmented reality Mobile monetization
Potentially legitimate reviews caught in Yelp’s review filter
Revenue model Their customers (small businesses) have
limited budgets to spend on advertisement Low switching costs (small businesses can
change easily to Google or Facebook ads)
Entering new markets Developing their social network platform Gamification through augmented reality
Lawsuits Privacy issues Facebook and Google competition
THE FUTURE
T H E F U T U R E
Europe - Portugal, Greece, Czech Republic, Hungary, Luxembourg and Russia South America – Brazil, Ecuador, Colombia, Chile and Peru
Asia – China, Japan and Macau
T H E F U T U R E
1. From review provider to a social platform
2. Brand Advertising
3. Platform Expansion
4. E-Commerce
5. Mobile Monetization
T H E F U T U R E
1. From review provider to a social platform
Intensified user engagement
More interaction between them
More contribution to
the site
Incremental reviews, photos, etc.
Increased user traffic in the platform Gain momentum
Create network effect
T H E F U T U R E
2. Brand Advertising
It is a big revenue potential
Increased number of users engaged in the social Yelp platform will create the network effect
It will attract brand advertisers with big budgets
MORE MONEY
T H E F U T U R E
3. Platform Expansion – Key Platform Improvements
Social/User Generated
Content
Service offerings More integrated check-in capabilities (checked in, bought X,
with friend Y, for event Z)
Editorial Content Professionally written content Travel guides Visual and video content – Yelp Channel/Magazine
Expanded Platform
Open up their website for 3rd party apps – let the users choose what they want to adopt
T H E F U T U R E
3. Platform Expansion – Key Platform Improvements
Higherconversion
rate
Increasedrevenues
Check-in capabilities
Social network
platforms
New ReviewFilter
T H E F U T U R E
?. Scenario Analysis
% Values ($M)
Local Business to Advertising Conversion Rate 4%
Local Business Revenues 80% 110,08
Brand Advertising Revenues 15% 20,64
Other Revenues 5% 6,88
Total Revenues 100% 137,6
T H E F U T U R E
?. Scenario Analysis
Pessimistic Most Likely Optimistic
Local Business to Advertising Conversion Rate 4,5% 6% 10%
Local Business Revenues 123,84 165,12 275,2
Revenues Increase 12,5% 50,0% 150,0%
T H E F U T U R E
4. E-Commerce
Deeper integration with merchants
and more creative offers
Gift cards, ticketing for events, create their own payment and loyalty solution
They need to enter into the part of the transaction, not just at the endpoints (discovery and review)
T H E F U T U R E
5. Mobile Monetization
Gamificationthrough
augmented reality
MobileAdvertising
THANK YOU