Following the news that Yelp Inc YELP 6.21% management has been exploring a sale of the company, analysts at Jefferies released a report discussing five big-name potential buyers. Jefferies also declares which of the five it sees as the best strategic fit for Yelp.
Facebook Inc FB 0.11%
Analysts point to the large number of small and midsize businesses (SMBs) that already have a presence on Facebook and believe that Facebook “clearly” intends to expand its advertising business.
Analysts also highlight Mark Zuckerberg’s recent focus on “recommendations of products and travel and restaurants” when discussing Facebook’s search business, exactly the type of content that Yelp is most known for.
The Priceline Group Inc PCLN 0.72%
Analysts see Priceline’s purchase of OpenTable as a sign that the company wants to “put relevant restaurant content and a booking platform in front of its large, highly engaged traveler audience looking for food and entertainment options in travel destinations.”
Yelp has both a large database of local restaurant and attraction reviews, as well as its own SeatMe booking platform.
GrubHub Inc GRUB 2.08%
Grubhub already has a highly-engaged audience looking for food, but the small relative size of the company would likely mean that stock issuance would play a role in a buyout of Yelp.
Yahoo! Inc. YHOO 0.5%
Yahoo is an interesting candidate for a Yelp buyout because of its $6 billion or so in cash and its drive to find a clear vision for the future of the company. Yahoo already has a partnership with Yelp for Yahoo’s Local Reviews, but Marissa Mayer has stated in the past that the company had no intentions of competing on a local level.
Google Inc GOOG 1.42%GOOGL 1.27%
Of all the potential Yelp suitors, Jefferies analysts see Google as the best fit. While Google remains the overall dominant force in online advertising, analysts note that it “still has some holes to fill in local.”
In fact, Google even made a $550 million bid to buy Yelp in 2009, but was turned down. Analysts believe that Yelp’s wealth of local SMB advertising potential might be too inviting for Google to pass up this time around.
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