Yelp posts bigger-than-expected loss; shares down
(Reuters) - Yelp Inc (YELP.N) posted a bigger-than-expected quarterly loss and its shares fell 6 percent in after-market trading as the consumer review website faces competition from Facebook Inc (FB.O).
Facebook last month unveiled a new feature called "graph search" that lets its users to trawl their network of friends to find everything from restaurants to movie recommendations, bringing it into direct competition with Yelp.
"That's a big negative ... Facebook has the opportunity to replicate a lot of these smaller network players like Yelp pretty easily over a much larger audience," National Alliance Securities analyst Mike Hickey told Reuters.
Yelp's mobile app makes it easier for people to discover local businesses. It combines Yelp's reviews and other relevant information with knowledge of the consumer's location. It also allows consumers to "check-in" at local businesses.
However, Yelp Chief Executive Jeremy Stoppelman brushed aside the competitive threat.
"I don't think anyone, certainly not overnight, is going to impact the business," Stoppelman said on a conference call with analysts.
Yelp's shares fell 6 percent on January 15, when Facebook launched its "graph search" feature.
The company's net loss narrowed to $5.31 million, or 8 cents per share, in the fourth quarter from $9.1 million, or 56 cents per share, a year earlier.
Analysts had expected a loss of 5 cents per share, according to Thomson Reuters I/BE/S.
The company, which went public in March last year, was founded by former PayPal engineers Jeremy Stoppelman and Russel Simmons as a start-up idea in a business incubator in 2004.
For the current quarter, it expects revenue in the range of $44 million to $44.5 million, above the average analyst expectation of $43.8 million.
Yelp shares, which have gained about 11 percent in the last three months, were down at $21 in after-market trading. They closed at $22.38 on the New York Stock Exchange.
(Reporting by Chandni Doulatramani in Bangalore; Editing by Maju Samuel)
- Washington, DC city council raises minimum wage to $11.50/hr in 2016
- Winning ticket sold in California for Mega Millions lottery: official
- India removes barriers to U.S. embassy as anger grows over diplomat's arrest
- UPDATE 5-Mega Millions lottery winning tickets sold in California, Georgia -Officials
- U.N. told up to 500 killed in South Sudan clashes: diplomats