Goldman Sachs, Citigroup to Help Yelp with IPO

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Yelp is going to need help when it has an initial public offering so it has selected some prominent bankers. They are: Goldman Sachs and Citigroup, according to news reports.

The IPO could take place early in 2012 – perhaps in the first quarter of next year, say news reports. The Business Insider adds that Yelp was discussing a public offering as early as July. Back then, the company named a new CFO, Rob Krolik, who used to work at Move Inc., according to The Business Insider. He also was a key player in the 2004 IPO of Shopping.com, news reports said.

With the IPO, the company may be valued somewhere between $1 billion and $2 billion, according to a report from The Wall Street Journal. The New York Times said the value of the company would be between $1.5 billion and $2 billion in connection with the IPO.

IPOs for social media and similar companies have led to anticipation from investors. It was just last week, for example, when Groupon sold $700 million in shares, “the largest technology I.P.O. since Google’s in 2004 — despite a lack of profits and skepticism about its long-term sustainability,” The Times said. Although Groupon shares dropped in value on Tuesday, on its first day of trading Groupon shares jumped 30 percent. The company was valued at $16.5 billion, The Times said. Goldman Sachs and Citigroup took part in the Groupon IPO.

In 2009, Yelp turned down a $500 million offer from Google. It was valued at $500 million as of January 2010.

Yelp offers consumers online reviews of local businesses. Yelp includes some 22 million reviews. Yelp saw some 63 million users a month during the summer, The Times said.

The Times also reports that altogether the “local online ad market is on track to grow to $15.1 billion this year, according to Borrell Associates, an advertising research firm. That market is expected to grow to $26.9 billion by 2016.”

Also, Yelp has gotten more than $50 million from investors such as Benchmark Capital, Bessemer Venture Partners, DAG Ventures and Elevation Partners.

In other company news, last month a report on TechZone360 said Yelp Switzerland was available to users.


Ed Silverstein is a TechZone360 contributor. To read more of his articles, please visit his columnist page.

Edited by Rich Steeves
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