Yelp Profits But Shares Drop



Yelp is down 8.% after being one of the best IPO performers this year. Even though the company beat revenue forecasts, it is clear that its operations are profitable. Analysts still aren’t’ convinced by Yelp, even though Yelp has had fourth straight quarter of revenue increases. Will Yelp be able to beat competition coming from Google? While its revenue is increasing, it is not profitable and the competition from other companies such as Google is increasing. Google recently bought Zagat, a fancier review competitor. And Yelp also gains most of its traffic from Google itself, so if Google heavily promotes Zagat, Yelp’s consumers group could be at risk. Yelp clearly needs to be able to innovate and set itself apart from the Google powerhouse in order to maintain its advantage of its competition. As the leader currently, they should be able to maintain their consumer base for a while because they are so heavily consumer focused, with their consumers providing reviews.

While many technology companies have outstanding IPOs, it seems that many are not able to maintain their success or convince investors that they will be sustainable and profitable in the long run.

-Evan Wang 

Comments

Post a Comment

Popular posts from this blog

Ireland's Economic Comeback

Image
On Wednesday, the International Monetary Fund (IMF) released a billion dollars of financial help to Ireland, as the country complied with the requirements set up in its 2010 bailout plan. The plan, which saved Ireland from bankruptcy after it suffered a massive banking crisis starting 2008, is reaching its end, as Ireland is getting ready to start issuing sovereign debt again in December. However, the country has to reach a minimum annual growth of 2% for its debt to become sustainable. Ireland is now out of its second recession in five years with a 0.4% second quarter expansion. This positive data, however, falls short of the optimistic 1.3% growth over the entire year predicted by the Irish government. Irish exports have grown by 4.3% over the same period, while household consumption grew by 0.7%. The IMF decision came almost one week after other good news for Ireland: on Friday, September 20, Moody's announced positive forecasts on Ireland's sovereign debt, which it now judg
Read more

Ongoing Contact

Students today commonly use Twitter and Facebook and, therefore, they receive lots of information on a regular basis. Information comes to them in small bits many times each day. Therefore, the 48 to 72 hours between class meetings can seem like an eternity. It is little wonder that students often seem incapable of remembering what took place in the previous class meeting. The amount of correspondence they have received in the interim is probably massive. I don’t use Twitter because I can’t write anything in 140 characters but I use email A LOT. I want to keep the students engaged in the period between my classes. I want them to think about Financial Accounting every day not just when they are walking into class. The emails that I send to my students vary enormously from motivational to practice questions to simply informational. I often ask the students about these emails in class so they know they need to read them. Yesterday was our first class where we discussed ow
Read more

Obama pushes for diplomacy on Iran's nuclear program

Image
President Obama and Iranian President Hassan Rouhani both openly stated their support for a new diplomatic effort regarding Iran's nuclear program. Obama, addressing the UN General Assembly on Tuesday, stated that there was "basis for a meaningful agreement." In recent weeks, Rouhani, who was elected in June, has suggested that he is open to developing a program in which Iran is allowed to further their nuclear energy program but prevents them from building a weapon, claiming that a nuclear weapon program would "contradict our fundamental religious and ethical convictions." Obama said that Secretary of State John Kerry was working with the Iranian government to resolve the negotiations about Iran's nuclear program. In his statement to the UN General Assembly, he stated that success in the negotiations would be a "major step in a long road to a difficult relationship, one based on mutual interests and mutual respect," adding that "the roadblock
Read more