The arrival of local reviews giant Yelp on the UK scene will have a lasting impact on the local players who have painstakingly built local reviews sites. Some mirror Yelp’s model completely, some compete on only some – but still significant – aspects of the site’s business model. I asked some of the major players in the market to comment on what they think will happen next, and how they will deal with Yelp’s arrival.
Marc Lyne Brownbook.net
For us Yelp’s arrival to London is good news. Helping small businesses succeed online is what we are all about at Brownbook and Yelps arrival will further highlight to businesses in London that they need to further engage ‘online’. Regarding the pure competition question; Brownbook is very different in many ways:
- It’s a global platform and has over 27 million businesses listed worldwide – with major coverage in USA, UK, Canada, Australia and users contributing to listings in 220 other countries
- People can add reviews but it’s not what Brownbook is all about, it’s the free local business directory that anyone can edit; it’s created by the people for the people (very much based on ‘wiki’ principals)
- It has no sales force, it’s all self service. Brownbook rewards users for their contributions, with a lifetime share of revenue
- It helps people and businesses to flourish in tough times by, offering business owners no-cost and low-cost tools to promote their businesses online (at a price point that is an order of magnitude lower than any of the competition), and offering people a way to boost their income by contributing to Brownbook (users can earn as much as $24 in a single transaction – not just nickels and dimes!).
- Launched in May 2008, Brownbook is growing at 40% per month and the mobile site is growing at 60% month on month
Joel Brazil, Tipped
Look, we recognize that Yelp and Qype are big and well-funded , essentially the Starbucks of the review community sites. But just like with coffee, we’re convinced that there still is a need and an audience for the small and independent business. We have always been and remain a small, passionate team, committed to authentic reviews of interesting and independent businesses in the UK. We don’t think it takes a massive amount of capital to build a great product and a great community. It takes innovation, a dedicated team, and commitment to our core beliefs. The game is far from over, and we’ll continue to work tirelessly to build the best community and the best product possible. To quote: “The Way of the Samurai is in desperateness. Ten men or more cannot kill such a man. Common sense will not accomplish great things. Simply become insane and desperate.” – Hagakure – Yamamoto Tsunetomo (1709AD)
Mark Livingstone, CEO of Touchlocal.com
We welcome Yelp’s arrival into the UK as its further validation of this emerging way of advertising and also allowing consumers to make informed, local choice. Touchlocal continues to grow at over 100% per year and with over 4m uniques per month has a very significant position in the market. Getting traction is one thing but monetising it is another and reliance on display advertising is clearly not the way right now. With over 100 people in the sales team at the company it had taken a very large effort to build our position and its only now that we are seeing revenue streams in the 10’s of millions. Stating the obvious although it is becoming clearer by the day it’s the well backed, access to capital companies that will survive and win. To adapt an old retail phrase “traction is vanity, monetisation is sanity” Interestingly it’s the Yells and Thompson’s that should take this as yet another hammer blow.
Stephan Uhrenbacher, CEO, Qype
Yelp is a great site in the US, but the local space is literally vast. While Yelp seems to be focusing entirely on London, on Qype you can already find reviews not only in London but also from any region in the UK – with excellent coverage in cities like Liverpool or Edinburgh – and at the same time with Qype operating in 8 countries now you can plan your trip to Paris, Barcelona or Berlin, Vienna, Zurich, or Warsaw. Nevertheless: London today is the city with the most reviews on Qype. We have built a strong local team at Leicester Square, where we are constantly adapting the site to the needs of the UK users, like making sure that people looking for a cafe in Richmond do not end up in Yorkshire. We added the “nearest tube” and TFL directions functions last week after requests from our London users. Or take the great location aware iPhone app that launched 4 weeks ago, which shows you what is good around you, not only in London, but anywhere in the UK and in Europe. We also just launched our API which connects the great Qype content to many other websites and is already being used by UK sites like Nestoria. In summary, I think that in order to be really successful in the local space, you have to become local.
Nice scoop Mike. But I reminded of Saddam’s PR chief, the so-called “Comical Ali”, painting an upbeat picture of the future of the regime as we could see US tanks rolling into Baghdad behind him…
Do your archives show similarly upbeat directors of local online auction companies just after eBay announced it was launching a UK site I wonder?
Ian Hendry
CEO, WeCanDo.BIZ
http://www.wecando.biz
Yelp maintain a quality standard that has enabled them to expand into the Uk.
The arrival of Yelp will ensure that competition will remain of a high standard which is only a good thing for us business directory owners.
For many years the business directory/review sites stood still allowing the big fish such as yell to take customers custom for granted.
Offering a service that puts the industry into the spotlight is only a good thing.
As Daniel(My collegue) has stated the introduction of Yelp is excellent news for customers within the Uk.
I for one will welcome Yelp and there quality service.
http:www.streetslocal.co.uk
I do find it worrying that you’ve set up a review website, yet can’t use proper spelling, grammar and punctuation.
It’s difficult to comment at times as we, proudly, work with all the major players in this arena.
However, I think it’s safe to say that the UK start-up scene is certainly alive and kicking. I wouldn’t bet against any of those interviewed to make massive successes of what they want to achieve.
A very tough local space has just got tougher. I laugh at all of the perifereal local search sites commenting on here that they “welcome” Yelp and the space is big enough for everyone. How many local search & reviews sites does the UK need?
If these heads of start up genuinely think they have a shot at this space they’re in even more trouble than they think. Yelp & Qype will dominate this space in 2009. ALL of the others will fade away or go bust in 2009.
Where are the revenue models for sites like TrustedPlaces, Brownbook et al? Answer: No matter what they come out with publicly the only players in this space generating money are Yell, Touch and Qype (just). I think Yelp are the only other business that have a chance.
If I had a local seach site I’d be running with my pants down to the likes of Qype trying to convince them to buy me out.
Remember early last year when Welovelocal sold out for a seemingly insignificant £400k. That looks like the most sensble bit of business anyone has done in this pace for a while now, doesnt it?
I find this article interesting. Good post Mike.
P.S. Is there any chance you could change the comments section to a) include something like Disqus, or b) not require me to leave my details every time. ? It is most stressful.
Great post Russell, having had some experience of this sector other than Yell and Thomsonlocal, the others rely significantly on SEO to generate their traffic and have no brand recognition to fall back on. Most also have revenues dependent on a fixed fee rather than performance based model, something which is bound to come under pressure during 2009.
Also key to reviews is freshness, context (who is giving the review) and depth, I struggle to see how anyone could do this alone….perhaps someone should aggregate the reviews from all these sites and publish them… now theres an idea
Yelp doesn’t stand a chance. Run by an arrogant crowd of look-at-me-roar-I’m-Americans, there’s no doubt in my mind that Yelp will come up against some true competition like they’ve been necessarily unable to find in the US (although, with all the lawsuits against Yelp’s mob rule, other reviews-based companies in the US have some glaring lessons to take away). Expect some humbling and scaling back in the near future, if you ask me.