Another big IPO is in the works. This time it’s Yelp who filed for an initial public offering on November 17, 2011 valued at $100 million. With plans to go public in 2012, the local business review site is building on impressive revenue gains seen this year.
In the first nine months of 2011, Yelp generated a whopping 80% increase in year-over-year revenue totaling $58.4 million. Advertising sales accounted for 91% of the company’s revenue during this period. Local advertising revenues grew by 67% year-over-year to $40.3 million, while branded advertising also grew by 67% to $12.7 million.
During the past year, Yelp has been increasing its spending on sales and marketing. Year-over-year expenditures have risen 60% to $38.5 million.
Yelp is currently concentrating on local and brand advertising on its website including graphic and text display ads. While not currently featuring local or brand advertising on its mobile apps, Yelp does “see the mobile market as an attractive monetization opportunity.”
Yelp saw an average of 61 million unique visitors in the third quarter, up 63% from the prior year. As of September 30, 2011, the site was maintaining more than 22 million reviews with approximately 529,000 free business pages claimed. As of the same date, Yelp also recognized revenue from approximately 19,000 local business accounts.
Yelp user demographics are as follows:
- 42% age 18-34
- 45% college graduates
- 36% annual income of $100,000+