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Yelp being sold is a possibility due to the business review service's inability to compete Internet giants, and its disappointing Quarter 1 (Q1) sales figures. Many financial analysts argue that Google should buy Yelp because it would be the most logical buyer.
Investment bankers are courting possible buyers, which is making investors hopeful that Yelp will be sold. However, the Wall Street Journal has reported that Yelp might not go on the auction block after all.
Yelp has not made a statement about whether or not the company is for sale. That is due to its policy forbidding responses to rumors or opinions, according to The Times of India.
Companies interested in buying Yelp include Facebook and Yahoo Inc. However, Brian Pitz, a financial analyst, thinks that Google Inc. would be the most sensible buyer.
The possibility of Yelp being sold arose a week after Yelp sales figures for Q1 failed to meet investors' expectations. They were also below analysts' projections.
These figures caused a massive sell-off that worsened Yelp stock falling already. In fact, it has shed over 50 percent of its value in just eight months.
Will Google buy Yelp? Such a Yelp-Google deal could be as high as $3.5 billion, according to Eater.
Google's corporate takeover of Yelp would benefit the search engine king. That is because Yelp's review service is popular among consumers searching for neighborhood merchants such as restaurants.
Yelp's problems include its being unable to compete with rivals such as Facebook and Google. The latter are attracting much more Web traffic.
Google already tried to purchase Yelp for around $500 million before the latter became a public company in 2012. However, last year Yelp CEO Jeremy Stoppelman stated that he halted the 2009 negotiations because he thought it would be an unwise deal.
Since then, Google and Yelp have remained arch enemies. However, the bottom line is that Google's $65 billion cash stockpile would give it leverage in negotiations.
