North America's most popular restaurant (and retail) review site, Yelp, is exploring a sale, reports the Wall Street Journal. Though the decision isn't set in stone, the Journal confirms that Yelp executives have been meeting with investment bankers and potential buyers "in recent weeks."
The company's shares skyrocketed after the news broke. Bloomberg notes that shares jumped 13 percent in the minutes following the news. The stock is currently trading nearly 16 percent up.
Analysts say the company, which is currently valued at $2.9 billion, could be sold for as much as $3.5 billion. The stock remains up, and is trading at between $42 and $43 per share. Per the Journal, most of Yelp's revenue today "comes from businesses that pay to raise their profile with enhanced pages and advertising."
Since Yelp first went public in 2012, its share price has fluctuated. It saw a high of around $97 last March, but since then shares have been down. This could be because the many lawsuits that have befallen the brand have marred its company image. Though individual users have been found guilty of misusing the site, Yelp itself has come out of class action lawsuits relatively unscathed. Most recently, a court ruled that Yelp did not defraud shareholders about a sale of artificially inflated stock.
But what entity has that kind of cash to blow on a site like Yelp? Google certainly has the money in the bank, but acquiring Yelp could be a conflict of interest since Google purchased Zagat in 2011. Additionally, Yelp and Google have not been the best of friends in recent years. Last year, Yelp accused Google of manipulating search results (for the second time). The company suggested that Google altered its algorithm to favor Zagat and other results over Yelp's pages. Yelp pages traditionally have excellent SEO value.
Priceline Group purchased OpenTable last year and seems to have a lot of cash lying around. Would they be interested in merging the two companies and using each for what they do best, reviews and reservations, respectively?
Facebook also has this kind of money lying around, and its current company listing services are mediocre at best. This would be a smart move in its effort to "own" everything on the internet.
According to CNN Money, Apple has $178 billion in the bank right now. In December of 2013, Apple signaled it might get into the restaurant reservation and ordering systems by filing for a new patent. Nothing has come of this, so maybe Apple wants to buy its way into this market instead of continuing to create its own system?
Finally, Amazon sounds like it has both the money and desire to buy a company like Yelp. It has already been dabbling in the food world via AmazonFresh and its Seattle-only food ordering and delivery application. And Amazon is already aware of the power of the user-generated review. Further speculation is welcome in the comments section, below.