C = Catalyst for the Stock’s Movement
Let’s start out by saying that there is still potential for Yelp, but odds are stacked heavily against the company. Yelp is best known for reviews of local places. The best part about the site is that the reviews are detailed, which gives potential customers a good idea of what to expect. However, there have always been questions as to what reviews are real. It’s easy for a company to pay a writer for a positive review. This led to Yelp filtering some reviews. This might have backfired because any real detailed reviews may now be filtered. In simplest terms, it’s difficult to know which reviews to trust.
Another negative has been competition from Google (NASDAQ:GOOG). That’s certainly not a competition you want to be involved in. Yelp has been holding its own, though. Just when the stock price was moving up slowly but steadily, Facebook (NASDAQ:FB) announced its Graph Search. This feature allows people to search social connections for information friends have shared. This includes restaurants. Yelp dropped 6.17 percent yesterday on this news. Many people will still prefer to use Yelp because of the more detailed reviews, but this Facebook news isn’t going to help matters in any way.
Let’s take a look at some important numbers for Yelp.