Market Overview

Yelp Drops on Facebook Competition

Shares of Yelp (NASDAQ: YELP) dropped nearly three percent on Monday to close at $18.92 on reports of increased competition from Facebook (NASDAQ: FB).

According to TechCrunch, Facebook has revamped its “Nearby” feature. The changes should make it much more competitive with services like Yelp.

Yelp is a website that allows users to browse for local restaurants and nightlife spots. Users can both read and submit reviews.

Facebook's new Nearby feature will allow its members to do much the same, using GPS coordinates to browse “nearby” spots.

Yelp went public in March. Since then, shares have declined about 23 percent. The relatively young tech company is one of the most hated stocks on the Street, with almost half of outstanding shares sold short.

Yelp's 23 percent drop is certainly horrendous when compared to the S&P 500's performance this year. Yet, it isn't as bad as say Groupon (NASDAQ: GRPN) or even Facebook.

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