Google vs. Yelp and the Battle for Local

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Credit: Mad Magazine

It’s no secret that there’s no love lost between Yelp and Google. They’re like Spain and Portugal in the 15th Century — rivals trying to carve up the local globe.

As you undoubtedly remember, Google tried unsuccessfully tried to buy Yelp in 2009. At the time there was a suggestion that Google might have been manipulated by Yelp. It was never clear which party ended the negotiations.

In 2011 Yelp CEO Jeremy Stoppelman testified against Google at Senate hearings on internet competition. He complained that Google was indexing Yelp’s reviews content on Google local Places pages over Yelp’s objection. Yelp said that Google gave it a choice to permit use of Yelp reviews on local Places pages or leave the index entirely.

The FTC prohibited Mountain View from posing that “dilemma” going forward, as part of its anti-trust settlement with the company.

Google bought Zagat in 2011 to obtain the kind of reviews corpus that the company lost when the Yelp deal fell through. Since then Google has generally been “emulating” or “borrowing” from Yelp to enhance its local results and content.

One such example is the Google City Experts program, designed to generate a volume of “quality reviews” (not just star ratings). It also seeks to build a group of local content creators similar to the Yelp Elite Squad.

Google Local Carousel results dominate the page

Google carousel

In the category of supplanting Yelp is Google’s Local Carousel. It shifts attention away from traditional organic links on the search-results page, where Yelp has been very strong.

In the screenshot above the first organic result below the Carousel (and the ad) is a Yelp listing. While I’m sure Google didn’t create the Carousel specifically to obscure or bury Yelp, the practical impact is to draw attention from the rest of the page and thus Yelp’s content. 

Test of local menus in Google Knowledge Graph context

google-restaurant-menu-card

On a smaller scale Google is also experimenting with showing “card-style” restaurant menus (above) in its Knowledge Graph area. While restaurants isn’t the only reason people visit Yelp it’s still a major traffic category for Yelp in particular and local search in general. Surfacing this type of structured menu data in search results also makes it less necessary to visit third party sites. 

If Google provides satisfactory answers to common restaurant queries (i.e., reviews, hours and menus) it makes visiting Yelp less necessary — perhaps unnecessary. 

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Perhaps coincidentally today Yelp announced a major redesign of business profile pages to make them more visually dynamic and easier to read, with more information above the fold. But Yelp will need to do more to combat Google’s advances in local.

Transactions offers promise. Yelp has gotten deeper into scheduling and wants to allow more third parties, through its Yelp Platform, to turn the site into a booking engine. Payments may not be far behind.

As an aside, as Yelp moves further into booking and other kinds of transactions it can solicit reviews from users (as OpenTable, Hotels.com and Amazon do). In that way it could become a useful tool for SMBs to acquire reviews, which might change many SMBs’ attitudes toward the site.

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The other front is mobile. That’s a partial ticket out of the Google SEO game for Yelp. The company said on its last earnings call that nearly 60% of its search queries were now coming from smartphones. As it continues to build its brand and consumer value proposition Yelp can emphasize its apps, which establish and unmediated relationship between Yelp and its users.

As more local queries migrate to mobile devices, Yelp can position itself as a primary destination. Google Maps (in particular on Android devices) remains a local juggernaut that is difficult to compete with. Depth of content and value-added features such as scheduling can deliver differentiation however.

Perhaps the larger question underlying all this is: what happens to everyone else?

What happens to the other third parties that are trying to be horizontal local search sites and directories? Unless they offer unique or deeper content, transactional capabilities, loyalty mechanisms or high levels of personalization, they risk being marginalized.

Yahoo could be a player in local again if it doesn’t simply follow a “me too” course. Facebook has enormous potential but hasn’t yet developed the right consumer experience. I don’t have high hopes for Microsoft. YP has a chance too but it will require good choices and skillful execution.

Let me know what you think. Can Yelp prevail over Google in local? And who else might compete successfully in a “horizontal” way?

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29 Responses to “Google vs. Yelp and the Battle for Local”

  1. mark slater says at

    We have a front row seat to all of this via our booking API. 

    Would love to chat more about this if you are open to it.

  2. Mike Blumenthal says at

    I see the analogy as more like the US vs the Taliban or perhaps Grenada rather than one of equals like Spain vs. Portugal. 

    Yelp is struggling for survival, attempting to find a scalable way to make money before their source of money runs out. Google is trying to slow them down to be sure that they don’t succeed. 

    Google is great at this sort of passive aggressive competition. They succeeded in local against the IYPs, then the Mapping sites, then the Mapping companies, etc etc etc. Reviews are for Google, but a hobby and a tactical weapon to keep Yelp from hitting escape velocity. 

  3. Greg says at

    Yes

  4. Greg Sterling says at

    Yes, open to a discussion

  5. mark slater says at

     Greg – hit me up at my email and lets arrange a time to chat.

  6. Greg Sterling says at

    Yelp is the Taliban? I think that from a consumer standpoint Yelp is doing OK. Ultimately Yelp has more to worry about from someone like Facebook (should they really “commit” to local) than Google. Yelp has more challenges on the advertiser side. For its part, Google hasn’t been able to develop a deep and fully coherent local experience. Though they are trying to “pre-empt” Yelp in various ways. 

  7. Mike Blumenthal says at

    Not from a political point of view but one of scale. 

  8. mark slater says at

    dont forget twitter. this is a dark horse that i am betting on

  9. Greg Sterling says at

    Yes, Twitter also has potential but it very much remains to be seen what they do.

  10. William Anderson says at

    What do you think about Amazon trying to get into this space if they can leverage customer reviews to local merchants?

  11. mark slater says at

    i dont see amazon getting in to this space. they are very much a product not a service play to the consumer.

  12. Greg Sterling says at

    Amazon was in local for a time (yellow pages, maps) but they walked away essentially. 

  13. William Anderson says at

    Greg – What about Amazon’s daily deal program.  Do you see this going anywhere?

  14. Greg Sterling says at

    I think it has some strength (haven’t seen any sales data) because of the Amazon brand. It depends on a sales effort from LivingSocial. So if the latter tanks then Amazon’s program will suffer. 

  15. Jeff says at

    Great overview Greg. The local battle seems to be trending away from Yelp towards Google. Yelp had a head-start but their closed system, desire for control, alienation of SMBs, and high advertising costs for SMBs are hurting their growth as a platform.

    I’m seeing SMBs putting their efforts into the more open Google+ Local. It’s much more business friendly and advertising options are less expensive. Businesses in my area, with the notable exception of restaurants, are ignoring Yelp and Foursquare but are jumping on the Google+ bandwagon.

    Yelp may do well by narrowing its focus and becoming a niche restaurant review platform.

  16. Greg Sterling says at

    SMBs aren’t ambivalent about Google? Their service is notoriously bad and frustrating. Really SMBs are adopting Google+ Local. On one level they’re forced to. But how active are they. I would imagine that Facebook dwarfs Google+ in terms of adoption and participation. Correct me if you’re seeing something different.

  17. Tom Bickel says at

    As an SMB, and enthusiastic reader of your great work Greg… We are thankful for both. Is Yelp’s review filter maddening? You bet. Have the constant changes at G been almost impossible to keep up and adjust for? Of course. However, both have delivered plenty of great customers, and we are thankful. Will we buy what Yelp is selling? Probably not at this time.

    I just wish there were other, more truly local, options available. Options offering help to SMBs without the motivation to “serve shareholders”. It would be great if some hyper local options, run by people invested in the individual communities, could gain some steam. However, that does seem quite unlikely. Doesn’t it?

  18. Jeff says at

    To Greg: “I would imagine that Facebook dwarfs Google+ in terms of adoption and participation.”

    Yes, true in terms of installed base. But what I’m seeing is Google+ Local leading in momentum whereas Facebook’s momentum seems to have stalled…I see plenty of businesses with a page/presence on FB but not spending a dime on advertising which is a waste of money.

    To Tom: “I just wish there were other, more truly local, options available. Options offering help to SMBs without the motivation to “serve shareholders”. It would be great if some hyper local options, run by people invested in the individual communities, could gain some steam.”

    I think that’s inevitable as global vertical niches and local horizontal niches chip away at the large general platforms don’t you? 

    So here’s another analogy: Yelp is like Sears, the large chain of general stores that used to be the place to go in small towns before specialists carved all the niches away leaving Sears with a narrower focus on tools and appliances. Likewise, niche review sites offering more depth will carve out small segments from the generalists leaving Yelp with restaurant reviews.

  19. Judith says at

    Good for google that they are competing yelp.

    Yelp hide more than 10 reviews from my past clients that carried 5 stars they filtered it and they displays my negative reviews from my past clients. I have 12 5 stars reviews that yelp kept in the filtered. box Maybe if I paid to advertise they will display all my reviews. I stopped mentioning yelp to my clients.

  20. Greg Sterling says at

    Judith: understand your frustration. Tom: are there any services in the market that you like? Have you tried any of the YP digital offerings (just curious). Have you tried Yext? 

  21. Ericka says at

    Yelp has been manipulating businesses for a while by filtering out good reviews and leaving the bad reviews posted. Then they call the business and offer to bury the bad reviews if they buy advertising. Because of this, they have multiple lawsuits from small biz owner so I hope that the big G and their review system eventually fazes them out of search results. 

  22. Tom Bickel says at

    Have not tried Yext. I like what they are doing, but question the value of some of those citations. Listing management is a beast of a task though. What they are doing probably makes sense for many SMBs. Did read quite a bit about their pay per action programs they were offering in the early going, and the reviews were not glowing.

    Don’t mean to sound like a naysayer, but I am a skeptic of pretty much all of them. The opportunity for something to compete with the value Adwords offers seems like it is right there for someone to take advantage of, but it just doesn’t seem like their is anything out there. Of course, there is a TON of noise to fight through everywhere you look, so I could be missing it.

    The YP industry has lost credibility. My former professional life was invested in dealing with YP companies all over the world, and knowing what I know about the industry, I just do not find it to be trustworthy. Maybe I have just been “too close”. Plus, my perception is that YP offerings are too convoluted. I could be wrong. The companies seem to be trying to evolve, but seems like it is too little, too late.   

    We speak to our peers in small business at length about this topic, and we just simply have not heard of anything offering the type of ROI that makes a great case. We have heard a couple minor success stories from companies using PPC programs from Yodle/Web.com/ReachLocal type companies. However, to an SMB like me the price up front is a barrier. Seems like many are beginning to look at taking a CRM angle, which appears somewhat compelling.

    On the local media front… local media channels are either too big (owned by large corps) with crazy high prices, or so small that they have not figured out how to really capitalize on the local audience (even though their are valuable eyeballs there).

    I like what SupporLocal is doing. It just seems like it is going to be tough for them to fight through the clutter in consumers and SMBs minds to get a ton of momentum. If something like if that type of resource existed in a local market, with local horsepower steering the narrative to create a real disruption, that would be really interesting. Do you know of anything like that in any market that is  experiencing any success at a local level? 

    Facebook is really as close as I have seen in terms of sparking that real local peer driven conversation, but they seem sort of half in/half out of the local game. Sorry for the comment length. I am just wondering if my perceptions are way off base?

  23. Hendrik says at

    Greg – this is an excellent post and highlights the importance that Google has placed on local. I think that they will do anything to ensure that they win in local via maps, reviews etc. Hindsight is easy but increasingly I think Yelp should have sold to Google..

    The 3 companies not mentioned in your post that will have an impact on local is twitter, foursquare and groupon.

    Twitter commerce with localisation could be a very interesting concept as their trial concepts with Starbucks have been interesting.

    Foursquare for me is the company that is sitting in a very good position – have lots of users, have lots of data on users behavior via checkins and lists which will make commerce a logical extension. Who buys foursquare in the end? Apple and Google will bid big to acquire them.

    Groupon is the dark horse in local as they also have transactional data from their deals but have steadily been acquiring companies to be able to leverage local..

  24. Alibaba to enter the US? & Gilt to go public in Q3 2014 says at

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  25. Greg says at

    Hendrik: I agree that Foursquare’s in a very interesting position but I still think they get bought by someone. Twitter is very interesting but it’s all push and no pull right now. And Groupon is also interesting however I’m not sure they can fully transform the company into a more full-service marketplace or platform for SMBs. 

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  28. Jerry says at

    Yelp is the winner because that’s what customers prefer. It’s fun to use and it just works better. When Google and FB are juggling so many things it makes it harder for them to focus exclusively on local. Plus they both have issues with integrating everything to not affect the overall experience. I think Yelp ends up being a big winner. I’m surprised someone doesn’t just take them out for like $10 Billion. There is a lot at stake here and if Yelp takes the lead and runs away with it GOOG could see 1/4 of their business go down the drain.

  29. Greg Sterling says at

    Do you by any chance work for Yelp or own yelp shares?

  30. Jerry says at

    I wish jerry but i don’t have much money. Basing it on everyone I know that uses yelp and the quality of their community. There’s value in the community of reviewers. Most of the reviews are more in depth on yelp

  31. Jerry says at

    I’m prob a bad person to ask though because I’m a 25 year old grad student in NYC which apparently is the sweet spot for yelp:
    http://blumenthals.com/blog/2014/02/24/consumer-mindshare-and-yelp-an-empire-in-local-search-or-a-wannabe/

  32. Jerry says at

    where is the user generated content on google? i mean i see the reviews but the thing that is so helpful with yelp is you can see people’s # of reviews, read their other reviews, etc…there’s just a lot more there for me as a potential customer of a local business to grab onto and get a warm fuzzy feeling about. the google local search thing is just cold and drab to me. who knows maybe i’m wrong but i think yelp has a lot more depth to their site and that’s pretty important when trying to figure out which plumber to user or what sushi restaurant to eat at.

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