Jim Cramer's Mad Dash: YELP AOL

NEW YORK ( TheStreet) -- After beating on the top and bottom lines when it reported fourth-quarter earnings on Wednesday, TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio, wanted to discuss Yelp ( YELP) in further detail.

"Unbelievable quarter," he said, before reminding investors they should be measuring the company by its revenue growth, not its user base, which is more important for other social media stocks.

Cramer added that Yelp is gaining more ads from previous customers, while lowering its costs for those ads. The repeat business and lower costs are boosting the company's leverage, which is "a thing of beauty," he said.

Cramer noted that the company grew revenue 72% year over year in the fourth quarter of 2013, and 65% year over year in the fourth quarter of 2012. This is known as accelerated revenue growth.

Turning to AOL  (AOL), the company also beat on the top and bottom lines for its fourth-quarter earnings. Cramer was very excited about the company's TV potential as well as the work that CEO Tim Armstrong has done.

Digging further into the earnings report, he highlighted AOL's drop in expenses to $40 million in 2013 from $340 million in 2009. He also pointed out that ad revenue grew 23% year over year in the fourth quarter, while third-party network revenue increased 63%.

- Written by Bret Kenwell in Petoskey, Mich.

At the time of publication, Cramer's Action Alerts PLUS had no position in companies mentioned.

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