Apple Shows Yelp Some Siri-ous Love; Sends it More Traffic

by Trefis Team
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Market
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Trefis
YELP
Yelp
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Yelp (NYSE:YELP) is one of the largest online business search, review and recommendation services, which enables consumers to access ratings and read reviews and opinions about local businesses like hotels, restaurants, salons, dentists and mechanics on their website. It generates revenue mainly from local business advertising, display advertising and from additional services like Yelp deals, and deals with reservation services like OpenTable (NASDAQ:OPEN). It competes primarily with other online business review services like Google (NASDAQ:GOOG) Places, Yahoo (NASDAQ:YHOO) Local, Angie’s List, CityLocal and Gumtree.

Yelp was also one of the third-party services integrated with Apple‘s (NASDAQ:AAPL) Siri voice activated AI assistant, which was launched with the iPhone 4S last year. However, it has been integrated even further in the latest iOS 5.1 update, which was launched last week. [1]

Check out our complete analysis of Yelp

Siri Integration Will Drive Yelp’s Mobile Traffic Growth

Now whenever users search for recommendations on local businesses using Siri, they will return results powered by Yelp. It will also direct all requests for reviews and ratings directly to Yelp’s mobile site.

Given the millions of iPhone 4S units sold to date, this could become a major traffic driver for Yelp, and also increase visitor engagement levels. Since Yelp’s entire business depends on the number of users actively using it, this is a very positive development. More users means more reviews and more local businesses advertising with Yelp to attract more customers, which ultimately means more advertising revenue for Yelp.

Additionally, since Siri is expected to be integrated with the iPad as well as Mac OS X eventually, this could lead to even more traffic to Yelp in the coming years. Since local and display advertising account for nearly 65% of Yelp’s total value, its revenue growth is definitely going to be helped by any increase in visitors.

We currently have a $10 Trefis price estimate for Yelp, which stands nearly 50% below its market price.

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Notes:
  1. Your iPhone Personal Assistant: Now With More Yelp!, Yelp Blog []
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