An alternative version of the Yelp-Google story is explained by Miguel Helft at the NY Times. He writes that various sources (including “Google executives”) contend that Google, rather than Yelp, declined to pursue the sale because of a lack of “transparency” in the negotiations:
[A]nother person who was briefed on the negotiations said that it was Google that walked away. The person said that Google executives believed that their counterparts at Yelp weren’t being “transparent.” The executives also didn’t want to let the negotiations be driven by leaks to the press . . . implying that it was Yelp that had first leaked word of the talks . . .
It seems apparent, based on conversations with multiple sources, that after the two sides tentatively agreed on a deal, Yelp came back to Google saying it had received a higher offer from another party. Why Yelp didn’t take that offer, which the sources said was in the vicinity of $750 million, is a bit of a mystery. The people who said Yelp walked away from the deal implied that there wasn’t a good fit with the other company. However, as Anthony Alfonso, president of Trenwith Valuation, told Claire Cain Miller, some of Yelp’s actions may have been an exercise in brinkmanship.
My original suspicion was that one of Yelp’s investors leaked the negotiation story to TechCrunch in an effort to bring out other bidders and ratchet up the price being discussed.
Another theory floated is that the $500 million number came out to establish a valuation for a big investment round to be announced.
Somewhere on the Yelp side it would appear somebody’s being a bit greedy.