No Deal for Google and Yelp…For Now

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Last week, rumors and reports were swirling that Internet titan Google was in talks to acquire local search and review service Yelp for something in the neighborhood of $500 million. Now, it looks like no deal is going to happen, with the New York Times reporting that Yelp has received a better offer from an as-yet-unnamed suitor. And the number on that offer could be as high as $750 million.

When reports of a pending deal between Google and Yelp began to circulate, there was some industry speculation that perhaps the negotiations had been leaked in order to drum up interest in Yelp from other parties: for instance, Microsoft might be interested in acquiring Yelp purely as a tactic to stymie Google’s expansion into local information services; Yahoo, IAC, and even AOL might also make interesting suitors for Yelp.

Some industry watchers also note Yelp could be considering an IPO, although the current economic climate isn’t exactly conductive to raising large amounts of cash via a stock offering. Others speculate that Google may have walked away from the deal, frustrated that news of negotiations had leaded to mainstream media.

Google’s interest in Yelp is to bolster its local and regional search offerings, particularly to the growing population of mobile users. Yelp integrates local and regional information with social networking elements, enabling users to not only see reviews and information on local businesses and events, but see what other people—and potentially their friends—thought of them too.