Yelp Buys Rival Qype For $50 Million To Consolidate Position In Europe

Qype was the European Yelp before Yelp was in Europe. Now Yelp has announced that it is acquiring the company for $50 million in a press release that also shares its “preliminary” Q3 revenue numbers. Founded in 2006 in Hamburg, Germany, Qype operates throughout Western Europe, with the UK and Germany its strongest properties.

In a blog post Yelp CEO Jeremy Stoppelman says that Qype  has “more than two million reviews of local businesses” and 15 million monthly uniques. However that number actually appears to be down from 17 million uniques reported in November 2010.

If that’s accurate it indicates that Qype’s momentum stalled as Yelp entered more European markets. But Yelp has also found growth in Europe uneven and slow in some markets, and this helps accelerate momentum for the company. Yelp will get uniques and local content and Qype investors get an exit. Yelp’s current content and user numbers are the following: 30 million reviews and 78 million monthly uniques on a global basis.

Qype also has an API for third party developers. It’s not clear what will happen to that, although I assume it will become part of the Yelp API.

Another pre-Yelp local reviews startup in the UK, Trusted Places, was acquired by UK yellow pages publisher Yell (now hibu) in May 2010. However any hint of that earlier reviews-centric site is long gone and hibu has shifted focus to building an e-commerce platform for local businesses.

Foursquare, Google and online yellow pages sites/apps are now the main “horizontal” competitors that Yelp faces in Europe. Recently Foursquare shifted its emphasis to take on Yelp directly as a “local search” site. However Foursquare is currently a relatively small presence in Europe vs Yelp, which is in 19 countries worldwide. For their part, most European yellow pages sites are seeing flat to declining traffic — though this is certainly not true in all markets.

In its preliminary Q3 revenue data, Yelp said that results exceed prior guidance and will be $36.4 million, with a net loss of $2.0 million.

The Qype deal, as well as Yelp’s relationships with Apple and Bing, help consolidate its position as probably the second most important local search provider globally behind Google.

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About The Author

Greg Sterling

Greg Sterling is a Contributing Editor to Search Engine Land, a member of the programming team for SMX events and the VP, Market Insights at Uberall.