BusinessWeek on Yelp

BusinessWeek’s Sarah Lacy, of SWSX-Mark Zuckerberg interview infamy, profiles Yelp: “Yelp is one of the few companies that has tried to tap the elusive local market and actually succeeded.” What she means is startups, of course.

An excerpt:

Another contrast between Yelp and other consumer-Web startups: Stoppelman insisted on building his own ad sales force from day one. That lifted Yelp’s costs dramatically, compared with peers that outsource ad sales to the likes of Google, Microsoft, or Federated Media. But Stoppelman knew he couldn’t sell to local businesses using computers and mathematical models à la Google. He’d have to do it the old-fashioned way, manning the phones, calling one local business at a time.

This is the kind of “patience” that’s required to succeed in local, although it requires enormous “heavy lifting.” Yelp’s ad sales success is driven by its consumer success. And that success is a mixture of intuition, careful thinking, hard work and luck.

Yelp is now regarded as the model in local by many. It didn’t invent community or the combination of reviews and local by any means but it has mixed those elements very successfully — obviously. There are skeptics who believe — I get these comments from time to time — that the site only has appeal in a few top DMAs and in limited numbers of categories.

Now that Yelp has grown to this point, one thing that the site might want to do is develop the ability to sort by “network.” This is something that Loladex has done on Facebook and it’s potentially valuable as a way to filter in markets where there are too many listings or reviews. Of course it only works if there’s a critical mass of participation on the site.

On a somewhat controversial note, Google recently added a “search within” search box for site search. Here’s what it looks like for Yelp:

Do you think Yelp (or any site owner) benefits, is harmed in some way or should care at all?