We estimate that we will receive net proceeds from the sale of Class A common
stock offered by us of approximately $96.2 million, based upon the initial
public offering price of $15.00 per share, and after deducting underwriting
discounts and commissions and estimated offering expenses payable by us. If
the underwriters’ option to purchase additional shares of Class A common
stock is exercised in full, we estimate that we will receive net proceeds of
approximately $111.2 million, after deducting underwriting discounts and
commissions and estimated offering expenses payable by us. We will not receive
any proceeds from the sale of Class A common stock by the selling stockholder.
The principal purposes of this offering are to increase our capitalization
and financial flexibility, increase our visibility in the marketplace and
create a public market for our Class A common stock. As of the date of this
prospectus, we cannot specify with certainty all of the particular uses for
the net proceeds to us from this offering. However, we currently intend to
use the net proceeds to us from this offering primarily for general corporate
purposes, including working capital, sales and marketing activities, general
and administrative matters and capital expenditures. We may also use
a portion of the net proceeds for the acquisition of, or investment in,
technologies, solutions or businesses that complement our business, although
we have no present commitments or agreements to enter into any acquisitions
or investments. We will have broad discretion over the uses of the net
proceeds from this offering. Pending these uses, we intend to invest the net
proceeds from this offering in short-term, investment-grade interest-bearing
securities such as money market funds, certificates of deposit, commercial
paper and guaranteed obligations of the U.S. government.
We compete for consumer traffic with traditional, offline local business
guides and directories, and with other online providers of local and web
search on the basis of a number of factors, including the reliability of our
content, breadth, depth and timeliness of information and the strength and
recognition of our brand. We also compete for a share of local businesses’
overall advertising budgets with traditional, offline media companies and
other Internet marketing providers on the basis of a number of factors,
including our large consumer audience, effectiveness of our advertising
solutions, our pricing structure and recognition of our brand. Our competitors
include the following types of businesses:
o Offline. We primarily compete with offline media companies and service
providers who typically have existing advertising relationships with local
businesses. Services provided by competitors range from yellow pages listings
to direct mail campaigns to advertising and listings services on local
newspapers, magazines, television and radio.
o Online. We compete with Internet search engines, such as, Google, Yahoo!
and Bing. We also compete with various other online service providers.
Company Description
Yelp connects people with great local businesses. Our users have contributed
a total of approximately 25 million cumulative reviews of almost every type
of local business, from restaurants, boutiques and salons to dentists,
mechanics, plumbers and more. These reviews are written by people using
Yelp
to share their everyday local business experiences, giving voice to consumers
and bringing “word of mouth” online. The information these reviews provide is
valuable for consumers and businesses alike. Approximately 66 million unique
visitors used our website, and our mobile application was used on
approximately 5.7 million unique mobile devices, on a monthly average basis
during the quarter ended December 31, 2011. Businesses, both small and large,
use our platform to engage with consumers at the critical moment when they are
deciding where to spend their money. Our business revolves around three key
constituencies: the contributors who write reviews, the consumers who read
them and the local businesses that they describe.
Contributors. We foster and support vibrant communities of contributors
in local markets across the United States, Canada, Western Europe and
Australia. These contributors provide rich, firsthand information about local
businesses, such as reviews, ratings and photos. Yelp users have contributed
a total of approximately 25 million cumulative reviews, which include, as of
December 31, 2011, approximately 18 million unfiltered reviews that appear
directly on business profile pages, approximately 5 million reviews that were
being filtered and can be accessed by clicking on a link on business profile
pages and approximately 1.8 million reviews that had been removed from our
platform. Although they do not factor into a business’s overall star rating,
we provide access to filtered reviews because they provide additional
perspectives and information on reviewed businesses, as well as transparency
of the efficacy of the filtering process.
Consumers. Our platform is transforming the way people discover local
businesses and is attracting a large audience of geographically and
demographically diverse consumers. Every day, millions of consumers visit our
website or use our mobile app to find great local businesses. Our strong
brand and the quality of the review content on our platform have enabled us
to attract this large audience with almost no traffic acquisition costs.
Local Businesses. Our platform provides local businesses with a variety
of free and paid services that help them engage with consumers at the critical
moment when they are deciding where to spend their money.
Powerful Network Effect. Our platform helps people find great local
businesses to meet their everyday needs. As more people use our platform,
more of them write reviews. Each review that a user contributes helps expand
the breadth and depth of the content on our platform, drawing in more
consumers and more prospective contributors. This increase in consumer
traffic and content improves our value proposition to local businesses as
they seek low-cost, easy-to-use and effective advertising solutions to
target a large number of intent-driven consumers.
Yelp Mobile. We help consumers make decisions on the go. Our mobile app
was recognized in the Apple iPhone Hall of Fame for App Store Essentials and,
as of November 10, 2011, was the #1 listed top free travel app in Apple’s App
Store.
As our community has grown and our product offerings have expanded, we have
seen significant growth in reviews, traffic, claimed local business locations
and active local business accounts.
o Our users have contributed a total of approximately 25 million cumulative
reviews to our platform as of December 31, 2011, up 64% from the prior year.
Of these reviews, approximately 18 million were available on business profile
pages, approximately 5 million were being filtered and approximately 1.8
million had been removed from our platform, as of December 31, 2011.
o We had approximately 66 million unique visitors on a monthly average basis
for the quarter ended December 31, 2011, up 67% from the same period in the
prior year.
o We had approximately 606,000 claimed business locations as of December 31,
2011, up 97% from the prior year.
o We recognized revenue from approximately 24,000 active local business
accounts for the quarter ended December 31, 2011, up 109% from the same
quarter in the prior year.
We generate revenue primarily from the sale of advertising on our website to
local businesses and national brands that seek to reach our growing audience
of consumers. During the year ended December 31, 2011, we generated net
revenue of $83.3 million, representing 74% growth over 2010, a net loss of
$16.7 million and an adjusted EBITDA loss of $1.1 million.
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We were incorporated in Delaware on September 3, 2004 under the name Yelp,
Inc., and we changed our name later in September 2004 to Yelp! Inc. and in
February 2012 to Yelp Inc. Our principal executive offices are located at
706 Mission Street, San Francisco, California 94103, and our telephone number
is (415) 908-3801. Our website address is www.yelp.com.