After Yelp posted the first quarterly profit in its history last week, the online business review site got panned on Wall Street. The company’s stock plummeted 11 percent the day after the results came out, wiping out its gains for the year.
CEO Jeremy Stoppelman didn’t seem disturbed as he sat down to discuss Yelp’s evolution in the 10 years since he began working on a way for people to share recommendations about local merchants with Russ Simmons, a fellow engineer he met while working at PayPal.
Stoppelman, 36, probably wouldn’t be running Yelp Inc. if he had paid more attention to the opinions of outsiders than his own insights.
Skeptics initially scoffed at the idea that people would feed Yelp free reviews of local businesses.
Today, Yelp packs more than 61 million reviews of merchants in 27 countries in a service that attracts nearly 140 million monthly visitors.
Many technology observers were incredulous in late 2009 when Stoppelman and his backers rebuffed a buyout offer from Google Inc. for a reported $500 million. Yelp now boasts a market value of about $5 billion, even after the recent sell-off spurred by concerns about Yelp’s slowing growth amid competition for online local advertising revenue from the Internet powerhouse such as Google and Facebook.
Yelp’s success has left Stoppelman with company stock worth about $400 million. Many other investors have profited too: Yelp’s shares have more than quadrupled from their March 2012 initial public offering price of $15.
Stoppelman mused about Yelp’s past and present during an interview with The Associated Press as the San Francisco company prepared to celebrate its 10-year anniversary. The remarks have been edited for clarity and brevity.
Q: What was it like when Google tried to buy you?
A: It was an emotional decision. Yelp is my baby, so I wanted it to be in a place where it was going to thrive. As it became more of an auction process where it felt like there was blood in the water and the sharks were attacking, it just felt like it wasn’t going to end up with Yelp in a good spot.
Q: You got a call from Steve Jobs during this process, right?
A: He was very anti-Google, as it turns out. He was pretty upset with Google. (Jobs had accused Google of stealing ideas from Apple’s iPhone to build Android, a rival operating system for mobile devices). He felt that Yelp was a great company and wouldn’t be a great company if it fell in the hands of Google.
Toward the end of our conversation, I had to go into complete ‘fan boy’ mode. For someone like me, who had spent a lot of time trying to build cool technology products, it was literally like talking to a god.
Q: Do you still write reviews yourself?
A: I do. I just did three or four today. I am at 1,214 reviews as of today. I was on a trip in Aspen, (Colo.) and I just gave a one-star review to this French restaurant. They gave us a hard time. We actually had to walk out. I didn’t even get to the food.
Q: Clearly, you believe people are more likely to have a satisfying experience in a world with Yelp to help guide them.
A: No question. The beauty is when you go on a road trip. Prior to Yelp, you would never have the confidence to veer off the highway and go that extra two miles into town and try out a place. And now you can actually read all about it and understand why you might want to do that rather than just hit the McDonald’s and keep on going up to Tahoe or what have you.