Yelp Touches New All-Time Highs as Company Pushes Into Local Delivery (YELP)
Shares of San Francisco-based review site Yelp (NASDAQ: YELP) hit new all-time highs on an intra-day basis Tuesday after the company announced the launch of a local delivery service.
Yelp has developed into a leading Internet property, valued at around $2.4 billion, with the success of its ubiquitous local user reviews. The service has provided a unique level of insight and transparency for consumers while simultaneously becoming a leading marketing portal for local businesses.
Yelp went public in May 2012 at $15 per share. Investors who purchased a piece of the company at the IPO price have subsequently been rewarded as the stock touched an all-time high on Tuesday of $37.66 before closing at $37.24, for a gain of 6.67 percent on the session. The catalyst for the jump in the share price was the launch of a local delivery service which will further optimize the site for consumers.
Yelp is hoping to expand its business from reviews and offers into a platform capable of executing complete transactions. The service will begin with local food deliveries in San Francisco and New York utilizing partnerships with Eat24 and Delivery.com. Initially, customers will be able to order food from 100 local establishments through the Yelp platform.
“The actual transaction happens on Yelp,” CEO Jeremy Stoppelman said at VentureBeat's MobileBeat conference in San Francisco. Using the new service, consumers will now be able to search for restaurants on Yelp, access reviews, and then pay for their order and have it delivered through the site. Although the initial launch is limited in terms of geography and participating restaurants, the service represents a significant leap in terms of Yelp's utility to consumers.
In addition to food delivery, Stoppleman said that Yelp will also be rolling out other categories in the future. He compared Yelp's vision to that of bringing Amazon.com's (NASDAQ: AMZN) one-click shopping to local goods and services. “You don't really have a one-click equivalent in local,” he said.
Other categories that are being eyed by the company include spas, yoga studios, salons and dentists. According to VentureBeat.com, partnerships to bring transactions onto the site in these areas are in the works with Booker, Intuit's (NASDAQ: INTU) Demandforce and MindBody.
In an interview with VentureBeat, Stoppelman elaborated on the overall direction of the company. “The idea is that there are all these consumers shopping on the site, and Yelp Platform allows them to take that next step — to transact,” he said. “The Yelp experience is all about going to local businesses. As you switch between different services, you as the consumer will have a one-stop shop.”
The developments at Yelp should be eye-catching to investors. The company's well-established online footprint and focus on local commerce provide a solid footing for the platform to optimize its user utility beyond reviews. The stock has been trending sharply higher in 2013 and a further breakout appears likely.
Year-to-date, shares have nearly doubled and Tuesday's announcement sets the table for more near-term catalysts as Yelp rolls out additional one-stop services. The site receives 102 million unique visitors per month and 30 percent of its traffic comes from the mobile web. The company's enviable position at the crossroads of local and mobile trends in technology should offer plenty of growth ahead if it can successfully execute on its plans.
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