Google and Yelp: A holiday drama… or farce

December 22, 2009

Only a few days ago, Yelp insiders seemed on the verge of taking home a $500 million holiday gift basket courtesy of Google, which was in talks to acquire the online publisher of local business reviews.

Now all that good cheer appears to have turned to acrimony, with the deal talks in tatters and the two sides pointing fingers.

googleBlogTechCrunch, the blog that initially reported news of discussions between Google and Yelp, said on Monday that the talks ended abruptly after Yelp CEO Jeremy Stoppleman walked away.

That seemed a strange change in tone from TechCrunch’s initial report which said the deal was “very likely to close.” But it was less surprising given the comments of a source close to the situation who told Reuters last week that Yelp’s investors were divided over whether Google’s offer was sufficient and were feeling pressured by Google to take the deal.

The blog Silicon Alley Insider reported on Monday that Stoppleman turned Google down because he decided he’d rather try his luck in the IPO market.

But the tale of Stoppelman’s brave stand had a decidedly Yelp-tinted perspective to it. And so on Tuesday, a report in The New York Times appeared that seemed designed to recast the story from Google’s point of view.

According to the Times report, which cites “a person briefed on the negotiations,” it was Google, not Yelp, that walked away.

Why? Google executives felt that Yelp wasn’t being “transparent” during the negotiations, the report says.

The report even suggests that Google may have concluded that Yelp’s claim of a $750 million rival offer from another unnamed suitor was a mere negotiating ploy, not a genuine offer, and that Google decided to call Yelp’s bluff.

What happens next is unclear, though many commentators believe the two sides may eventually come back to the deal table. In the meantime, it’s providing plenty of entertainment as the news flow slows for the holidays.


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