Following the quarter, Jefferies analyst Brian Pitz, who rates Yelp shares "buy" with a $100 price target noted how disruptive San Francisco-based Yelp has a chance to become. "Yelp reported another strong quarter as the company continues to disrupt the traditional offline directory business," Pitz wrote in a May research report. "We believe the overall opportunity is very large and that there is meaningful operating leverage left in the model, even as Yelp's moat continues to grow."
During the quarter, Yelp announced a deal with Yahoo! (YHOO), bringing Yelp's reviews, business information and star ratings to Yahoo! Search. Yahoo! has also been mentioned as a potential acquirer of Yelp, as has Google. "Potential acquirers of Yelp could include: Amazon, Ebay, Google, Microsoft, and Yahoo (plus some international players)," wrote SunTrust analyst Robert Peck in a research note, when discussing the OpenTable, Priceline transaction.
Peck's research note isn't the first time Yahoo! has been mentioned as a potential acquirer of Yelp, as CEO Marissa Mayer continues to build out Yahoo! in her vision. Mayer was rumored to be sniffing around Yelp last year, as she focuses on increasing Yahoo!'s presence on mobile devices. She also tried to buy Yelp while she was still at Google (GOOG), but that never happened.
Yahoo! could not be reached for comment for this story.
With the pending OpenTable purchase and Yelp boosting revenue guidance for 2014, it's becoming clearer that mobile, particularly user generated content on mobile, is being seen as differentiators for companies when it comes to attracting users. Amazon (AMZN) is rumored to be launching a local services marketplace, with a potential roll-out in San Francisco and Seattle before a nationwide reveal.
"We all value it [UCG] quite highly," Barton said. "It spins and spins and spins. This is the moat around the business, and it gets wider and deeper every day."
--Written by Chris Ciaccia in New York
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