Why Isn’t AT&T the Buyer of Yelp?

Again, nothing has been confirmed yet but let’s assume that Google acquires Yelp. I’ve been talking to people all day about this question and the implications for both companies.

A more interesting question to consider may be: Why didn’t AT&T (owner of YellowPages.com) buy Yelp? AT&T, with its large sales force could have provided Yelp with ad sales and Yelp could have broadened the reach of AT&T online and in mobile to audiences that aren’t using yellow pages. 

Here’s what I wrote previously in my post “If I Were a Yellow Pages Publisher . . .”

So if I were AT&T I’d be buying Yelp. The sales force could sell the ads and the brand would be an enormous addition to AT&T interactive  . . . Notwithstanding the chart at the very bottom, Yelp’s traffic is already bigger than the IYPs . . .

So what kept AT&T from trying to buy Yelp? Was it:

  • Lack of vision
  • Lack of an entrepreneurial culture
  • Too many layers of approval
  • Inability to act quickly

Or have they tried and Yelp investors wanted more than they were willing to pay? What do you think?


11 Responses to “Why Isn’t AT&T the Buyer of Yelp?”

  1. Kyle Kazak Says:


    I think that AT&T had numerous other priorities a head of looking for Mergers and Acquisitions.

    I had suspected Google to purchase some geo-locating company as soon as I head about the Local Listing Ads being released, but I wasn’t expecting it to be Yelp.

    If I was to guess I would say if they acquire Yelp it would be to enrich their own data, expand into other verticals AND leverage Yelp’s sales force (~200+) and user-base to sell Local Listing Ads 😉 to small businesses.

    When i heard about the $500M speculated offer I originally thought it was a bit low. The whole local scene is exploding and Yelp’s content and user-base is gold, especially with the amount of API users they have.

    Only time will tell.

    P.S. Nice post.

  2. Andrew Shotland Says:

    If in fact Google buys Yelp, my bet is that

    1) AT&T did not want to pay the Yelp brand premium

    2) Yelp’s management would rather be part of Google

    Nothing against AT&T but if you were a mega successful tech start-up, assuming the offer prices are equal, who would you rather be bought by?

  3. Greg Sterling Says:

    Andrew: as usual you’re logic and insights prove to be impeccable.

  4. David Mihm Says:

    Agree with Andrew, as usual. He needs to quit stealing my thoughts and writing them before I have a chance to 🙂

  5. Andrew Shotland Says:

    My bet is even if this deal does not happen it sets off a chain reaction of local search M&A activity. Adwords resellers & YP publishers are already pressured by an over-reliance on Google inventory. This deal fuels the perception that Google is heading towards the “last mile” and going direct to SMBs, which was pretty much the big competitive advantage YP publishers had over GOOG.

    Another potential interesting development is if Yelp adopts the GOOG reseller model and opens itself up to Yodle, ReachLocal, DexKnows, etc.

  6. Greg Sterling Says:

    The last-mile point is a valid one. YPs and others have been “looking around” for alternatives for some time http://bit.ly/86jnce.

    Yelp is unlikely to allow lots of third party local ads in to its site but it may seek to distribute SMB listings offsite to a network a la some of the others

  7. Chris Silver Smith Says:

    It’s really surprising that we haven’t seen some large YP mergers occuring. It would strengthen a few of those companies if they did so.

    Will we instead see some of them continue attempting to be independent all the way to making themselves nonviable?

    There’s a point at which, if you haven’t already merged, you might become worth less than the sum of your parts (broken apart and sold off in pieces).

  8. Perry Says:

    I think the YP publishers are still reeling/adjusting from the assumption (which is now crumbling) that they will be the default sales channel winner.

    Personally, I feel that US YP’s quietly gave up on winning via consumer publishing some time ago (probably in an unspoken way). Now the cards are forcing them back to the challenge of gaining back consumer traffic, and the cultures are very poorly aligned to get back in this game. The valuation metrics are radically different from channel business thinking and out of the comfort zone of the management teams.

    Couple this with the distractions of bankruptcy which prevents meaningful consolidation, a move they all undoubtedly are active in assessing.

  9. Melih Says:


    I think companies like AT & T are missing the point when it comes to new media. Their management is outdated and their knowledge about where the industry is going is equally outdated. They cannot see past their history and figure out what direction they should go.

    I agree with the comment that Yelp would rather be with Google than AT&T. Why would that be? AT &T just isn’t a company one would relate to new media, new vision, and new ideas. Old and out dated….of course many of the large companies in this space are just like that too. Why wouldn’t Verizon, Sprint want Yelp? They are just not thinking!

    One company that has been mentioned in the Local Listing space is on KillerStartUps here. This is the type of new vision ideas that these large companies just can’t figure out.


  10. Ed Kohler Says:

    It seems likely that Yelp would also be worth more to Google than AT&T based on what they would be able to do with it. Compare Google’s likely vision for Yelp vs. what AT&T’s vision for Yelp would be and you can imagine how Google would be able to value the service higher.

  11. earlpearl Says:

    One other thing, as I add to the speculation from those that aren’t in the inside; How could AT & T justify paying that kind of money for those revenues and probably nil or minimal profit on behalf of the IYP. The IYP is sinking…that kind of money would be a lot and a gamble for what are minimal profits at this time.

    The IYP’s have a lot of sales people…so what. They aren’t magicians….they aren’t well recieved in many cases….it would be a long and tough job to retrain and refit the bigger sales force w/ Yelp as a sales tool.

    If the IYP’s fall from the landscape its no big loss IMHO

Comments are closed.

%d bloggers like this: