How does Yelp make money?

The followings are the different revenue streams: - Sponsored Search: local businesses pay Yelp for traffic to their website maybe with a CPC model. Sponsored search allowed businesses to move their links to first Search Engine Results page (SERP). - Advertisements: monthly subscribing packages from $300 to $1,000 primarily to customers with a business account. This feature allows businesses to place banner advertisements on any search related to their category including competitor‘s Yelp pages. Also Yelps sold advertising as parternship and some banners to companies such as Monster and Zipcar. - Apparel Store: a Yelp apparel store was launched, to let customers shop for apparels online. This stream counts for less than 5% annual revenue. - Offers/Deals: on August 2010 Yelp ran its first daily deal, similar to companies like Groupon and Living Social. I'm not sure how is the % split between the different revenue streams but I believe that the majority for the past year came from Advertisements and Sponsored Search, and I'm pretty confident that the main revenue stream for Yelp for the next year could be the Offer/Deals one. I read an interesting article about the power of the deals revenue stream: http://www.businessinsider.com/yelps-first-daily-deal-beats-groupon-2010-9 I think this math of the article is pretty impressive: "Yelp ran its first daily deal in San Fancisco…a $110 massage for $49 from the well-reviewed Psoas Massage + Bodywork…Yelp sold 1,616 deals at $49, or a total of $79,184…Assuming Yelp pockets 30% (compared to Groupon’s 50%), the company took home $23.8K in a single day. That’s the monthly equivalent of 79 hard-earned small business advertisers on Yelp’s current advertising product…"

Here are some of the ways Yelp makes money.Additional info can be found here: https://biz.yelp.com/support/compare Placement on Competitor Pages-Other competing businesses that currently do not advertise (6 placements, 2 on top, 2 on the side and 2 at the bottom)-Removes competitor placements on your pageDisplay Advertisements-Above organic search results-Placements within search results -Banner advertisements on homepageBusiness Advertising-Ability to customize photos, spotlight a review, add a photo/video gallery slideshowYelp Deals-30% cut on deals, 10% of gift certificatesSeatMe-$99 per month for reservations (competes w/ OpenTable, Resy etc.)

Yelp receives revenue from two different channels that I know of. There might be other revenue channels in the future. 1. Display ads on the site - Self explanatory 2. Small Business Advertising/Management - This is where their sales team reach out to small businesses that have presence on the site and ask them to purchase advertising as well as reputation management services. For a monthly fee, the business can respond to ratings and even reach out to yelpers who may have posted about their business. There might also be sponsorships involved but I'm not certain of this fact.

Extorting small businesses into advertising space. If the business declines, Yelp removes positive reviews so the negative ones have a higher weight. If you don't believe me, read this New York Times article: http://bits.blogs.nytimes.com/2010/02/24/yelp-is-sued-after-dispute-over-a-review/

Thought this analysis might come in handy-http://hackingrevenue.com/revenue/how-does-yelp-make-money/