How Does Yelp Make Money?

Yelp is an online review platform that allows users to discover all kinds of venues ranging from bars to hairdressers. 

Content on Yelp is user-generated, meaning that members are the ones who post pictures as well as rate the service. 

Yelp, which is based in San Francisco, was founded in 2004 by former PayPal employees Jeremy Stoppelman and Russel Simmons.

The founders managed to raise $56 million in funding before taking Yelp public in 2012. 

In some cities, “The Yelper” actually became a cultural phenomenon. The platform was even parodied during a South Park episode.  

However, Yelp has also been criticized for manipulating and censoring reviews at the cost of business owners.  

In 2021, Yelp generated around $1 billion in revenue. But how does the firm actually make money? 

The majority of Yelp’s revenue (> 90 percent, in fact) stems from the advertising products that businesses purchase on its platform.

ADVERTISING

Yelp generates commission revenue on transactions that it facilitates on behalf of other partners.

TRANSACTIONS

Businesses can receive a verified license that provides them with a stamp of authentication for which they are charged a subscription fee.

SUBSCRIPTION

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