AT&T to Build a Yelp-Like Site for Younger Users?

Picture 9AT&T has apparently decided to that attract a younger demographic (those under 30) it’s going to build a different kind of yellow pages with a different brand. It will be a mix of listings and user-generated content. According to Forbes:

Later this year, AT&T plans to roll out an alternative brand for local search, geared primarily at younger users. The site will feature the same core data–listings and advertiser information–as Yellowpages.com, but differ in how it presents information and how it uses user-submitted information. While Yellowpages.com returns data based on advertisers’ profiles, similar to a directory, the new site will prioritize results based on a user’s social connections and recommendations, says Yoo.

Though perhaps about three years late, the concept is sound. The question is whether AT&T can build the site and make it more than simply a copy of Yelp, Yahoo Local, Citysearch, GoodRec or others in the segment. This is the problem that exists in search too —  historically companies have built me-too products that are unable to compete with the market leader.

If AT&T is simply looking for incremental traffic and usage then this approach might be fine. If the company is looking for a brand and UX that are going to pull people from their existing allegiances and behaviors that’s going to be much more difficult.

A smart move perhaps would be to simply buy Yelp and run it as a separate division but with AT&T advertisers as the monetization engine. Perhaps that has already been explored.

11 Responses to “AT&T to Build a Yelp-Like Site for Younger Users?”

  1. Sebastien Provencher Says:

    Given that Yelp has raised $31M from investors and that typically investors look for a return on investment of 10x their original investment, buyinh Yelp might be a bit costly even for a large Yellow Pages publisher in the current economy.

  2. Greg Sterling Says:

    Agree. However 10X is probably not realistic in this market. Let’s call it 7X, which would be $200ish million.

    ATT paid that or at least that for Ingenio. Ingenio was a platform buy. It’s probably actually easier for AT&T to duplicate the technology back end than it is to build a successful consumer product in this segment.

  3. Sebastien Provencher Says:

    re: Ingenio. I wasn’t aware of that price range. Not too get into another debate, but is it possible AT&T overpaid for Ingenio?

  4. Greg Sterling Says:

    Yes, think they overpaid probably. Ingenio folks wouldn’t agree with that however🙂

    I’m not sure re the price, guessing. But it was easily more than $100M and probably less than $300. But again, just speculating.

  5. Greg Sterling Says:

    However ingenio did have revenues, mostly from the Keen side of the business.

  6. Scott Owens Says:

    Using the 7x return – wouldn’t the price be more like $300M – $400M range (assuming founders have still have 25%- 50%)

    Would be interesting play. Acquisitions make sense though as i’m not sure it’s in ATT’s DNA to pull in the younger crowd. They clearly have the sales force to monetize though.

  7. Greg Sterling Says:

    Perhaps. I was just doing simple math. At your price, AT&T would likely balk. The question is who would buy at $400M — nobody now. The big search engines and portals, with the exception of MSFT aren’t going to have/spend that money.

    MSFT probably doesn’t think it needs Yelp. Facebook won’t spend that money, etc. Yelp probably isn’t an IPO play, although OpenTable went IPO. But while Yelp is very successful as a consumer destination it has the same challenges everyone does on the ad sales side.

    AT&T could do an analysis of what it has to spend for traffic deals over time and perhaps factor that into the available money. According to Compete, Yelp has almost 10M more uniques than YP.com: http://siteanalytics.compete.com/yellowpages.com+yelp.com/

  8. Bill Dinan Says:

    Putting the Ingenio acquisition aside, AT&T has already been through a successful rebrand through acquisition exercise…remember the YellowPages.com acquisition.
    That was the start of a successful rebrand from Smartpages.com to YellowPages.com.

    AT&T does possess a significant current content advantage … repackage that for a segmented consumer experience…coupled with a large sales force to execute on the delivery…

  9. AhmedF Says:

    Maybe this is what they picked up YP.com for.

  10. Greg Sterling Says:

    Ahmed . . . could be. But I’m guessing it’s totally outside the realm of “yellow pages.”

  11. ø Yelp ø Says:

    […] This is the problem that exists in search too — historically companies have built … https://gesterling.wordpress.com/ Reviewer on Yelp.com is allegedly being yelp stalked aka … Anne B. of San Francisco, […]

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