Online local guide,
) recently announced that it will open a new office in Chicago's
Merchandise Mart in 2015. Per the lease agreement, the company has
agreed to take an area of around 50,000 square feet on lease at the
Merchandise Mart, which has lately evolved into a hub for tech
Over the next one and a half years, the online review site plans
to hire about 300 personnel in Chicago for the same. The company
also announced that a majority of these jobs will be related to
sales and marketing.
Yelp's Chicago office will be its seventh worldwide after San
Francisco, Scottsdale, New York, London, Hamburg and Dublin. The
company selected Chicago owing to a strong lineup of local
businesses, a flourishing tech community and a talented
Yelp continues to extend its foothold in South America. The
company recently expanded into Chile, which has a better economic
stability and prosperity among Latin American nations. Chile is the
twenty-eighth nation worldwide to get Yelp's services. In 2014
itself, the company has opened its services in Japan, Mexico,
Portugal and Argentina.
In the recently concluded second quarter of fiscal 2014, total
international traffic grew 80% year-over-year to approximately 31
million unique visitors on a monthly average basis.
We believe that the international expansion initiatives
undertaken by the company will help in boosting ad revenues going
forward. However, these will increase selling and marketing
expenditures considerably, which in turn may lower profitability
For the first time in its history, Yelp reported a profit in the
recently concluded second quarter of fiscal 2014. Management
provided an optimistic guidance for the third quarter and full
year. The positive guidance reflects strong growth in user base
(particularly mobile), its entry into new markets (both domestic
& international) and also new partnerships.
Moreover, the acquisition and integration of its European
competitor, Qype, has led to a contribution of 1.8 million reviews
and 1.4 million photographs.
Although fierce competition from the likes of Facebook (
), Google (
) and Twitter (
) in the brand related revenue market and rising product
development costs remain headwinds, we believe that Yelp will
benefit from robust growth in active local business accounts and
improving mobile customer engagement.
Currently, Yelp has a Zacks Rank #2 (Buy).
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