NEW YORK ( Real Money) -- On the one hand there's a company that delivers accelerated revenue growth, with expenses going down as a percentage of revenue and revenue that's flying through the roof.
On the other hand there's a company that measures itself by one chief metric, monthly average users, and engagement is now cooling.
(FB), so it isn't such a bad shorthand. On the other hand there's Yelp. Here's a company that told us to measure it by revenue growth and repeat-advertising and leverage, meaning are the company is getting more ads from more users and seeing the cost of selling those ads go down. The answer, unequivocally, is, "Yes, that's precisely what's happening," and it is a thing of beauty. Revenue grew at 72% year over year for the quarter, when it had previously been growing at 65%. Local-ad revenue grew 71%. Gross margins are sensational, because it is all user-generated content anyway. Yelp is the local version of Google (GOOG), and it is paying off huge. Yelp may literally have too much business to handle. Twitter has market capitalization of $37 billion market with advertising that is still advancing, but rates will peak if users peak. Yelp has a $5.2 billion market cap with no fence for revenue in sight. Something's very wrong with this picture. At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long GOOG.
Editor's Note: This article was originally published at 7:24 a.m. EST on Real Money on Feb. 6.
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