Yelp Falls, Netflix Rises: Tech Winners & Losers

NEW YORK (TheStreet) -- Yelp (YELP) shares fell 1.9% to $70.04 after it was reported that the company believes Google (GOOG) is discriminating against it in searches.

An internal Yelp report leaked to TechCrunch shows that the company believes that Google is manipulating search results such that Yelp loses up to 20% of clicks from search results that the company should have received. In one example from the report, titled "Barnacle Impact Analysis," the authors searched the San Francisco restaurant Gary Danko and found that Google was acting as a "barnacle" by pinning Google+ information to the URL of the restaurant and other local businesses. A search of "Gary Danko Yelp" had the same effect, with Google+ appearing as the top result and Yelp as the second through fifth results. The report noted, "G[oogle] appears to be intentionally serving up search results that contradict the users' intent in order to preference G[oogle]+."Yelp, an online business review guide, relies on clicks for advertising revenue, so any search engine directions to Google+ amount to less revenue for Yelp.

On Tuesday, Yelp joined the formal opposition to a proposed European Union settlement with the search engine behemoth. Google is even more dominant in Europe than in the United States, holding a 90% market share in some EU countries.

Yelp frequently accuses Google of monopolistic activity. In May, Yelp CEO Jeremy Stoppelman wrote in a letter to the president of the European Commission, "I truly fear the landscape for innovation in Europe is infertile, and this is a direct result of the abuses Google has undertaken with its dominant position." In January 2013, Google avoided a similar legal battle when the Federal Trade Commission concluded after a two-year investigation that Google had not violated any antitrust laws. When testifying against Google in September 2011, Stoppelman said, "Today represents a rare opportunity for the government to protect innovation. Allowing a search engine with monopoly market share to exploit and extend its dominance hampers entrepreneurial activity."
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