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Q3 2012 Earnings Call
November 01, 2012 4:30 pm ET
Jeremy Stoppelman - Co-Founder, Chief Executive Officer and Director
Robert J. Krolik - Chief Financial Officer and Principal Accounting Officer
Geoff Donaker - Chief Operating Officer and Director
Neil A. Doshi - Citigroup Inc, Research Division
Jason S. Helfstein - Oppenheimer & Co. Inc., Research Division
Todd Van Fleet - First Analysis Securities Corporation, Research Division
James Cakmak – Telsey Advisory Group
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Good afternoon, everyone, and thank you for joining us on Yelp's Third Quarter 2012 Conference Call. Joining me on the call today is CEO, Jeremy Stoppelman; and CFO, Rob Krolik. Before I turn in the call over to the company, I'll read our Safe Harbor statement.
We will make certain statements today that are forward-looking and involve a number of risks and uncertainties that could cause actual results to differ materially. Please note these forward-looking statements reflect our opinions only as of the date of this call, and we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. Please refer to our SEC filings, as well as our financial results press release, for a more detailed description of the risk factors that may affect our results.
During our call today, we will discuss adjusted EBITDA. In our press release issued this afternoon and our filings with the SEC, each of which is posted on our website, you will find additional disclosures regarding this non-GAAP financial measure and a reconciliation of net loss to adjusted EBITDA.
And with that, I'll now turn the call over to Jeremy.
Thanks, Stacy, and welcome, everyone. We had a great quarter fueled by the rich, authentic local content created by Yelpers around the world. The growth we're seeing today represents the power of the Yelp model. With increased numbers in content and traffic to our site, the value we provide to local businesses and advertisers continues to rise. The opportunity before us is enormous and we're just getting started. The growth strategy is simple: leverage our platform to become ubiquitous across all devices; expand our geographic presence through existing and new markets; and serve our growing base of local business customers.
I'm happy to say that this quarter we've executed in each of these areas. On Mobile, we are fortunate enough to have great partners like Apple that help distribute our brand in powerful ways. Last month, iOS 6 became available for download, and we are very pleased with the integration with Apple Maps and Siri which prompted an increase in app downloads. Although it's still early days since the launch, we are happy with the results so far.
On average, our app was used on over 8 million mobile devices per month in the third quarter, up 64% year-over-year and approximately 45% of all Yelp searches are now conducted on our Mobile apps. We believe that the migration towards Mobile ultimately leads to greater monetization as ads are better paired with the user's exact location. As a reminder, we've been showing local ads on the mobile web for some time now and have found that the click through rate on Mobile web is significantly higher than that on desktop. We will begin extending local ads to our Mobile apps soon and expect to have them fully rolled out by the end of the fourth quarter.
We also continue to expand geographically with the launch of new markets such as Helsinki and Singapore. Singapore is exciting as it marks our first entry point in Asia. We continue to broaden our presence in the U.S. as well with new markets such as Albuquerque and Jacksonville. We are now active in 96 Yelp markets including 19 countries. Just last week, we announced the acquisition of Qype, which further accelerates our European expansion, adding content and traffic faster worldwide. Their largest markets, Germany and the U.K., are key for Yelp and together we will have a significantly increased presence in these markets. We are excited to welcome Qype's employees to our team.
The buildout of our London sales office continues and we're excited about the opportunity in front of us. We believe the Playbook that has made Yelp a success in the U.S. will work in a similar manner in Europe. Also, continued to build products and services for local business customers, most recently by launching gift certificates that businesses can set up and sell directly to consumers through Yelp. While Yelp Deals are a great way to present a new customer with a reason to try a business, gift certificates are helpful for turning existing customers into promoters.
In 2010, we've started the Yelp Small Business Advisory Council to provide us with input and guidance regarding the unique concerns of local business owners. I'm excited to say that the third iteration of this annual council recently met. We now have representatives from across the U.S., Canada and the U.K. Our business outreach team offers ongoing workshops and webinars for local business owners and recently co-hosted 14 workshops across the country as part of the New York Stock Exchange's big startup initiative. With the help of programs like these, we continue to see an increase in the number of Claim local businesses which grew 68% year-over-year, and an increase in the number of Active local businesses which grew 82% year-over-year. With over 73 million local businesses worldwide, we believe our long-term opportunity is tremendous.