Stephen Espinosa

Yelp announced that they hit over 29 Million Uniques per month in January and don’t have any plans to stop growing with their new $25 Million round. The company turned down an offer to be bought by Google not long ago, which will probably crank up M&A activity in the industry this year. On top of all this they have passed 9 Million Reviews on the site, which is the most any local search site has. So the big question is, who can compete with Yelp? Everyone.

If there is weakness with Yelp, and with any major IYP, it is that they are trying to be everything to everyone. They will always be outperformed in certain categories if a competitor decides to focus in on, let’s say, Hair Salons. To be honest, I think this is one of the only ways to try to compete. As more and more IYPs keep popping up, and gaining 1,000,000 Uniques becomes more and more of the norm rather than impressive, the only way to compete is to focus and not try to serve every single local search you can just because you liscenced some data.

Currently there is about one new IYP popping up every week and they all seem to not offer more than Name, Address, Phone Number, and a Map. Now there is nothing wrong with that and they do provide value to searchers no doubt. But none of those IYPs are going to change anything. None of them are going to come close to what Yelp has done because none can offer a better experience. Now one could argue it is hard to compete with a company that has raised that much money, but I would say it isn’t. You just have to do it in the right way.

As I said earlier, the only way to compete is to offer a better experience. So unless you have $100 Million in VC money, you have to start out small.  Evan Williams wrote about this and put it as his #1 rule in his infamous “Ten Rules for Web Startups.”

Focus on the smallest possible problem you could solve that would potentially be   useful. Most companies start out trying to do too many things, which makes life difficult and turns you into a me-too.

There are two ways you can approach this in local search; you can either focus on one specific category such as Vets, or focus on a specific geographic region, such as San Diego. The latter of those two is where newspapers have fallen short and actually still have an opportunity to dominate those markets. Instead they have outsourced that part of their business to the likes of Local.com and MojoPages.  To be clear, there is nothing wrong with those two companies, but the fact of the matter is they will never be better than what Yelp is offering. They are a good revenue stream for both the newspapers and the white label providers but they will never crush it in their area.

If you look at the other side of the story at vertical sites, there are plenty of success stories with sites like The Knot.  The Knot focuses on helping brides-to-be find and plan everything they need to for their big day. They spend their entire time focusing on one particular event in a persons life, rather than focusing on all the other 300+ local categories as well. So how does this pay off? They are less dependant on search traffic from Google and rely on a ton more direct and referral traffic. Users spend a lot more time on the site rather than the typical 1.7 page views per visit on average IYPs.  They have a brand which is recognizable and they bring value that is unmatched in their niche.

Complaining about Google because they have made things like Place Pages for businesses is just plain dumb. If you can’t provide a better user experience for a search like “Happy Hour in Santa Monica” than this:

… then you need to change your business model. You need to adapt, because Google or anybody else isn’t slowing down.  And of course it doesn’t need to be happy hours, it can be vets, nail salons, or anything. If the industry wants to grow beyond just SEO and their family members using it, we need to start focusing on user experience and building beyond a name, address, and phone number.