Yelp a Successor to Newspapers?

picture-7Slate’s “Big Money” site (owned by the Washington Post) features an article on Yelp arguing it represents the successor to newspaper advertising in many respects:

[W]hile the online presentation of news has made tremendous leaps, ingenuity has not carried over to the business side. Online readers see (and ignore) the same lame online display ads they did 10 years ago, just more of them, and bigger. And the most expensive online advertising now actively blocks readers from viewing any content until the ad has fully played. This is progress?

The truth is, there has been progress in monetizing the Internet, beyond the display ads most people ignore. But that progress isn’t coming from newspaper companies. It’s coming from companies like Yelp. And Yelp is currently eating newspapers’ lunch . . .

Yelp’s founders have invented a Web site that cleaves local online advertising from journalism, right when journalism needs it most. Yelp is the evolution and replacement for the actually quite useful local advertising that used to appear in newspapers, only without the pesky journalism breaking up the ad pages. And Yelp is trying to make that separation permanent.

There’s something quite awkward and even strange about the angle the writer takes here: Yelp is contributing to the demise of newspapers. Yes, newspapers have not been as innovative as they could have been online. And, yes, Yelp has probably attracted some restaurant and other local ad dollars that at one time would have gone to newspapers. But Yelp is part of a much larger category of online advertising options for small business that collectively are drawing traditional media dollars to the Internet.

Yelp’s monetization efforts are not really novel (it uses display ads and sponsored listings) and the company has challenges on that side of the business, despite huge success with consumers.

To the extent that the author is arguing: newspapers should have created a local community site like Yelp . . . OK, sure. But what about Metromix?

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8 Responses to “Yelp a Successor to Newspapers?”

  1. Malcolm Lewis Says:

    > “And Yelp is currently eating newspapers’ lunch…”

    On what basis? Traffic or revenue? I’d love to know how much money Yelp makes. Anyone know? I like their site for personal use, but I find it hard to see where they make much money. I imagine that most online local advertising revenue is made when users click on a prominently placed ad while conducting a category search. With Yelp, the user is focusing on businesses that are highly rated, not those that are prominently positioned on the page so paid listings with prominent placement probably doesn’t work as well.

  2. Jon Carder Says:

    Hey Greg,
    Any idea what MetroMix has done to partner with local media companies. I saw some links on their page about some partnerships with local media companies but they seem to be just reciprocal links. I wonder the depth of these partnerships and if they are actually producing any results.

  3. Greg Sterling Says:

    I don’t actually know much re MetroMix’s partner relationships beyond the fact that the content is being used by some of its newspaper-owners

  4. Jon Carder Says:

    Thanks for the response. I saw ChicagoTribune owns a piece. Are there multiple owners?

  5. Rich Rosen Says:

    I also wonder how Yelp is doing w revenue. In the *good old days of yellowpage advertising* businesses believed they needed to advertise. Position was grandfathered and a businesses couldn’t afford to risk a year off and lose a front spot. Restaurants believe (or will soon) they NEED to have a presence on YELP. ReachLocal, Yodle, WebVisible and others are aggressively wooing advertisers, but does an advertiser NEED to be listed on Yodle or ReachLocal? Yelp is building a brand that is associated w reviews and will see better margins than the SEM resellers. The brand association will be a must-have for many local B2C advertisers.

  6. Greg Sterling Says:

    Jon:

    Gannett is also an owner. There may be another one.

  7. Malcolm Lewis Says:

    @Rich: I agree and I wonder if Yelp would do better with a paid inclusion revenue model. If a user rates an unlisted business, the business has a trial period to sign up for inclusion before the listing disappears and the business is no longer represented on Yelp — or maybe represented in some very basic way such as findable by name but not category. I understand some of the integrity issues surrounding this idea, but if they can be addressed I think Yelp might finally have a decent business model. Just a random thought.

  8. B. Chandra Says:

    I see the connection less having to do with advertising/monetization and more to do with community journalism- the user reviews produced by ordinary people. That content contrasts with what was exclusively expert opinion in newspapers.

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