Google Makes A Move to buy Yelp – What Does it All Mean?

Two pieces of online technology news has grabbed the attention of small businesses worldwide in the last few days:

• the first is that Google is willing to acquire Yelp (a massive business ratings and reviews website, if you aren’t familiar with it), although the site has just rejected an offer of $500.000.000 dollars.
• the second is that the Mountain View Giant will re-launch Google Answers (which was shut down about 3 years ago) and rename the service “Google Guru”!

These events may be tagged as being just another of the huge amount of acquisitions that Google has pursued in the last few years, which, interestingly enough, have followed the market trends: 16 in 2007 (an incredibly vibrant year for the web) and only 2 in 2008, the year of the recession.

It may be looked at as the launch of another service, but in fact there’s something very interesting behind this business deal.

Why Google would be interested in Yelp?

Yelp’s slogan is pretty straightforward: Real People, Real Reviews. In fact, it’s a website containing reviews focused on a variety of different business activities and market sectors (service providers, restaurants, bars, clubs and many more that are not strictly related to the tourism industry).  Users write a review (text + star rating) about the place they’ve experienced and others can search reviews based on address, postal code, city… a classic “local review.”

Google could be interested in Yelp because it would a strong product in order to face the competition by Bing. The Microsoft search engine in fact, has been marketed from the beginning as Decision Engine, as a “concierge” that has been integrated both the shopping and local reviews function since a few months ago.

An additional reason, could be to add new features to the Maps, in this way improving the Google Favorite Places (a new feature we mentioned last week) with a huge amount of relevant content. This helps to satisfy the demand for “real” opinions, as opposed to spam and fast food content that now have invaded many of Google search results.

And why should Google re-launch Answers?

Here we go back, in some ways, to an important point: Google needs to “fill its empty spaces with something “social”. The idea of integrating into search the views and opinions, questions and answers written by real people makes the engine more “human” and makes the answer to a specific query more reliable.

You may argue “hey, but every web page is written by real people”: well, that this is true to a certain extend, but the real dilemma is that the engine (when you search for a specific product) orders the search by mixing results that sometimes are not homogeneous among each other — for example, by presenting on the same page a review located in a blog post and the product-page of an e-commerce website.  Otherwise, Google directly points to product /price comparison websites.

Thus we see no attempt to integrate the “opinion” into the algorithm, the human response into the machine’s one, in order to return a search result set that the user can trust.  The problem is, given the times we live in, resides in trusting an opinion written by someone who seems honest, but in reality may well be a competitor or someone paid to write (there are agencies that have been doing this for years).

In short, if Google will try and make the search more “human” in order to provide better results, the risk is perhaps to put too much trust in the ethics of human beings, which can’t be taken for granted.

Another implication for a Small Business

As David Mihm points out in one of his latest posts , there’s the risk for small business owners to give more and more attention at Google and just Google (which is already the “big” player in the online advertising game) forgetting about all the other opportunities to promote themselves and succeed in their online marketing activities.  As David says:

“ad buys on such a powerful network where every small business owner is competing are going to get prohibitively expensive for some SMEs at some point…and they’ll need a cheaper alternative that actually brings them a positive ROI at some mid-term point in the future”.

The real question: is Google evaluating all these implications while still pursuing their stated mission to “organize the world’s information and make it universally accessible and useful”?

To Learn More…

Travel Online Partners will be releasing a new DIY Guide for Search Engine Optimisation aimed specifically for our small business customers in travel and tourism. It’s a very exciting development and we’re hard at work preparing for the January release. If you’d like a copy, be sure to signup for our newsletter to receive an email when it is available (plus get a discount!).

If you prefer some one-on-one support for your search engine marketing needs, our Search Engine Jumpstart package might be just the thing to increase your base of paying customers in 2010.