When the COVID-19 pandemic abruptly shut down normal life more than four years ago, few tech companies endured more wrenching change than Yelp. The familiar tool for researching restaurants and retail stores “was kind of at the center of the bull’s-eye of the blast radius of the pandemic,” remembers Jeremy Stoppelman, its cofounder and CEO.
With everyone stuck at home, traffic to the site plummeted by half. Eateries and shops that couldn’t even stay open had no need to buy ads. The existential crisis led the company to lay off and furlough thousands of employees.
Today, with the world having learned to live with COVID, it’s not surprising that Yelp’s business has recovered. In 2023, the company hit $1.3 billion in revenue, up more than 30% from 2019’s pre-pandemic total. Its revenue for the most recent quarter reached an all-time high of $357 million.
As Yelp marks its 20th anniversary—its first review was posted on October 12, 2004—it offers a comfortably familiar experience. Its homepage looks much as it always has, dominated (in my case, at this particular moment) by glamour shots of burgers, tacos, and tom yum noodle soup submitted by users.
Under the surface, though, the company hasn’t just bounced back. It’s also evolving in ways that aren’t immediately apparent. For one thing, it’s leaner now: The 4,713 employees the company had at the end of 2023 represent a reduction of 20% from 2019. That’s partly because it’s reduced its reliance on outbound sales as a tool for finding advertisers.
For years, “what we would do to grow revenue was add more local sales reps,” Stoppelman explains. “We grew to have an army of something like 4,000 local sales folks reaching out to small businesses to bring them on board.”
That investment reflected the fact that small-business owners’ expertise and attention often lay in areas other than online marketing, requiring Yelp to prime the pump. More recently, however, such local entrepreneurs have gotten more digitally savvy—in part due to the popularity of services such as Yelp—and have grown comfortable buying ads using self-service tools. Additionally, a higher percentage of Yelp advertisers are now larger operations with multiple locations, which typically make larger, consolidated ad buys. Bottom line: Yelp has gotten more efficient at monetizing its audience’s eyeballs.
Perhaps more significantly, it’s expanded beyond its traditional restaurants-and-retail domain. The app’s Projects tab is dedicated to helping users find professionals to perform tasks such as electrical work, plumbing, pest control, and kitchen upgrades. For Yelp users, these big-ticket purchases often involve complex questions, multiple bids, and other logistics far more complex than deciding where to go for lunch, requiring the company to reimagine itself with features such as Request a Quote, which lets you contact several service providers with a few clicks.
So far, it seems to be working. The pandemic “really lit a fuse on that side of our business, and we’ve never looked back,” Stoppelman says. In the most recent quarter, 62% of revenue came from ads for services, a segment that increased by 11% year-over-year. That boom offset softness in retail and restaurants, which decreased by 3%.
One persistent reality about Yelp’s business is Google. The search giant is not only a source of traffic for Yelp but also an aggressive rival. It’s long placed its own Yelp-esque summaries of information about local businesses atop search results, thereby lessening the chances that anyone will keep scrolling and click on a Yelp link. Yelp has frequently decried this practice; it also says that at times Google has scraped its content to use without credit or compensation.
In August, it turned its long-simmering anger into action. After a U.S. federal circuit judge declared Google to have a monopoly on internet search, Yelp sued the company in federal court, accusing it of abusing its overall dominance in search to gain an unfair advantage in local search, harming both Yelp and advertisers who’d benefit from more competition. “Google doesn’t play by its own rules,” Stoppelman told me. “And that is what we’re trying to get them to do.”
The resulting 66-page complaint is an interesting read full of highly specific accusations, involving matters such as Google counting simple star ratings as reviews in the metrics it uses to determine a business’s overall score. (According to Yelp, that’s misleading and can reward spammers.) Google’s tactics “really keep competitors like Yelp from growing at an even greater scale,” says Yelp general counsel Aaron Schur. “And it also increases the costs of anyone who wants to enter this market, and in fact it keeps many from entering the local search market.”
Of course, it was never a given that Yelp would survive long enough to take on Google so directly—not just in court, but at all. Back when the company was a startup, Stoppelman points out, its competition consisted of web 1.0 sites such as CitySearch—not to mention the dead-tree Yellow Pages. Using the net as an aid to everyday life was something most people did on a computer at home, not with a smartphone in their pocket.
Since then, almost everything about how we research local businesses has changed. And yet Yelp’s mission, as the company described it in the early days (“Yelp is the fun and easy way to find, review and talk about what’s great—and not so great—in your neighborhood and beyond”) has proven robust.
“It’s really held up through all these years,” Stoppelman says. “That makes me happy, that we got it right, that we meant it. And here it is, still helping people 20 years later. That’s pretty cool.”
Household helpers
By ramping up its home services presence over the past few years, Yelp hasn’t exactly been entering uncharted territory. Angi, formerly known as Angie’s List, has been connecting consumers with home pros since 1995; even if you’ve never used it, you’ve surely seen its TV ads. Along with its namesake service, the company owns two other players in the space, HomeAdvisor and Handy. Other contenders include Thumbtack and Porch.
Still, Yelp isn’t merely a me-too entrant in a crowded space. Its ubiquity offers a competitive advantage—not just a well-known brand, but one that many people have reason to visit often. Using Yelp when you’re hankering for Chinese food may help keep it front of mind on those rarer occasions when you have a plumbing disaster or are thinking about getting your roof replaced. Rivals such as Angi, by contrast, have less opportunity to be an ongoing habit.
This difference in usage is reflected in data from Similarweb, which says that Yelp received 148 million web visits overall in August 2024—more than 12 times as many as Angi. Yelp’s own benchmarks of its scale as of 2023 include a monthly average of 32 million “app unique devices,” 36 million unique desktop visitors, and 60 million unique mobile web visitors.
Competing in home services did require Yelp to construct new features that went well beyond its classic functionality. Rather than being a onetime upgrade, that effort has been underway for the better part of a decade. Its increasing importance is a sign of the company’s desire to refocus from its old sales-centric culture to a new emphasis on sophisticated product improvements for consumers and advertisers. “We had to tie in how we were going to grow revenue and grow the overall business—every aspect of it—by leveraging technology,” Stoppelman says.
Back in 2016, Yelp turned an existing tool that let you message a business into Request a Quote, formalizing the process of collecting price estimates before committing to a major job. Four years later, during the pandemic, it built out Request a Quote with new questionnaire-style flows specific to dozens of types of services, from auto repair to pool cleaning, and added scheduling functionality. At the end of 2022, it organized its tools relating to home services into the Projects tab, simplifying the steps from initial research to communicating with a provider during a job.
Last April, the company added an AI-infused feature called the Yelp Assistant. Its interface bears a certain resemblance to open-ended chatbots such as ChatGPT. But Yelp’s goal is to quickly collect basic facts relating to a project: not just that you’re looking for a plumber, but that you need one to fix a leak in a storage-tank water heater.
“It holds your hand through a question-answer process that feels very natural,” Stoppelman says. “And in the end, it compiles all the necessary information to deliver that to the right type of pros and, with your permission, gets you right into conversations with a variety of pros to get whatever the thing is that you’re trying to get done, done.”
Yelp monetizes these conversations through fees it receives from service providers for some of the leads they get via Request a Quote. The company gets paid for about 30% of such leads, up from less than 10% in 2018. (Just as with its classic business listings, the company doesn’t restrict Request a Quote to paying advertisers, which would make the results too scattershot to be useful.)
With Request a Quote transactions, as with Yelp experiences of all kinds, user reviews are the biggest single reason why the app is valuable Overall, 20% of the app’s reviews are now for home and local service providers. (Restaurants are in second place at 17%.) However, not all service providers have enough reviews to establish their credibility, which helps explain a new program called “Yelp Guaranteed.” Introduced last year, it offers up to $2,500 of coverage for qualifying projects in case of problems. “That gives you just an extra bit of peace of mind and allows you to move forward,” says Stoppelman.
More AI to come
By the standards of much of the generative AI currently consuming the tech industry’s mental bandwidth, the Yelp Assistant is focused and practical—low-key, even. Still, it’s the closest thing the app currently has to an in-your-face AI element.
Which isn’t to say that AI isn’t changing Yelp. It’s just doing so in ways that are subtle enough that you might not recognize them as AI. For example, the company has adopted the technology to better match user sessions with the most relevant ads. It’s also producing one-line AI-generated business summaries (“Retro diner well-known for its classic cheeseburgers and affordable prices”), saving you from having to wade through too many long-winded reviews to get the gist of a place.
Stoppelman characterizes Yelp’s current embrace of AI less as an inflection point than a continuation of its long utilization of machine learning. “As the more recent large language models emerged, it was like pouring gas onto the fire,” he says. “We were able to take some of our existing expertise and really rush forward and take advantage of other exciting opportunities.”
What’s next? The company has previewed AI-generated videos it’s working on—nothing radically synthetic like the output of OpenAI’s Sora, but rather straightforward overviews of businesses based on reviews, photos, and videos from Yelp users. Another idea Stoppelman is at least noodling on: a speech-driven Yelp interface. Now that AI is going well beyond what the Siris and Alexas of the past could achieve, “I do think there’s the possibility that LLMs will unlock the hopes and dreams that all of us had for voice technology,” he muses.
Maybe so. But if Yelp stays true to the approach that’s worked for 20 years, the Yelp of the future—no matter how wild the underlying technology—will remain recognizable. It’ll still feel like, well, Yelp.
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