Sunday, December 20, 2009

Google Again Antes Up to Buy Into the SoLo(Mo) Space

Will Google Purchase Yelp To Create Its Own Foursquare?

Rumors are that Google is closing in on a potential acquisition of Yelp.According to a TechCrunch report, Google and Yelp are in advanced acquisition negotiations, and while the deal isn't complete, the price tag is suspected to be as high as $500 million.

Why would the Search Engine Giant consider such a move? Might a small savvy start-up like Foursquare be in its cross-hairs?

The next shiny thing on the social network horizon for 2010 is location-based social networks. Foursquare, often described as the next Twitter may also be considered Yelp on Steroids. It not only can surface restaurant reviews, it can accomplish that feat in real time while the user is in transit, and it canreward that same user with discounts and incentives once they get to said destination.

is Google's own location based social network. Introduced this past February, the opt-in feature lets smartphone and laptop users share their location with friends and allows those friends to share their locations in return. Although not pinpoint accurate, Latitude can display your general location based on information from GPS satellites and cell towers.

Yelp founded in 2004 by two former PayPayl employees was one of the first local review sites for restaurants and bars to appear on the Web. Covering every state in the US, users write and read reviews about anything from their favorite hole in the wall restaurant to the finest midtown Manhattan club. It also offers social networking features, that allows for adding friends, group events, forums and instant messaging.

Foursquare has some unique game-like features built into its API. For instance, becoming a "Mayor" of an establishment (bar, restaurant, nightclub, etc.) is a relatively simple process.

Combining Latitude with Yelp could potentially create a super-sized location-based social network capable of running circles around Foursquare (no pun intended). Based on copious amount of venue data amassed by Yelp over the course of the last five years, plus Google's search engine prowess in local search, coupled with their newly acquired real-time search feeds from Twitter and Facebook, the acquisition makes all the sense in the world.

Location-based marketing is the last remaining online advertising markets for Google. Over the course of 2009, it has clearly shown an interest in combining Latitude, Google Maps, search results, and advertising technology.

The Google-Yelp alchemy is like adding one plus one and ending up with three. The combined synergy of the two entities could far surpass what the start-up Foursquare can offer at this point in time. With less than a year under its belt, Foursquare's been able to accomplish remarkable things -- however the Google-Yelp deal could easily replicate the Foursquare model and take the concept to its next level -- in a fraction of the time.

It will be interesting to see in the months to come, who's "local" acumen gains the most "local" cred! (me, personally, I'm rooting for the little guy!)

My Take

Compete with FourSquare?

Google bought Dodgeball - created by the founder of FourSquare ( over four years ago. Why didn't Google cultivate Dodgeball into a robust product?

Instead Dodgeball's founders went off and created FourSquare in the same footprint of Dodgeball. Now Google's contemplating buying Yelp to compete with a service that they had previously squandered?

Is Google showing a lack of creative vision & initiative? Seller beware.

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