UPDATE 2-Yelp loss narrows as advertising grows

Wed May 1, 2013 5:58pm EDT

* 1st-qtr loss/share $0.08 vs estimates loss/share $0.06

* Revenue up 68 pct at $46.1 mln vs estimates $44.6 mln

* Sees 2nd-qtr revenue $52.5 mln-$53.5 mln vs est $50.6 mln

* Shares up 10 pct after market (Adds comments from conference call and analyst; updates shares)

By Chandni Doulatramani

May 1 (Reuters) - Consumer review website Yelp Inc reported quarterly results ahead of analysts' estimates, helped by strength in its local and mobile advertising businesses, and it forecast second-quarter revenue above expectations.

Yelp shares were up 10 percent in after-market trading after closing at $25.30 on the New York Stock Exchange. The shares have risen 20 percent in the last three months.

The company expects second-quarter revenue in the range of $52.5 million to $53.5 million, above the average analyst expectation of $50.6 million.

Yelp has been facing tough competition from Facebook Inc after the social networking company unveiled in January a search feature that enables users to trawl their network of friends to find everything from restaurants to movie recommendations.

Yelp said it got 36 percent of its local ads from mobile devices, and that it launched display ads on mobile phones in the first quarter. The company said it gets about 45 percent of its search from its mobile app, and about 56 percent from the app as well as Web.

The mobile app helps people to discover local businesses. It combines Yelp's reviews and other relevant information with knowledge of the user's location.

Yelp expects to further benefit from mobile ads as it focuses more on the platform.

The company said it gets more than half of its traffic from Google Inc's search engine, but it also gets a good number of referrals from Apple Inc.

"Engagement on mobile appears to be going in the right direction. Mobile theoretically is the most natural platform for them to be successful on," National Alliance Securities analyst Mike Hickey told Reuters.

He said if a user is looking for a restaurant, there are more chances he will be on the move, and is more likely to use his mobile to search for restaurants.

The company, which went public in March last year, was founded by former PayPal engineers Jeremy Stoppelman and Russel Simmons as a start-up in 2004.

Yelp said earlier on Wednesday that it launched its services in New Zealand and it planned to expand further internationally.

The company received about 6 percent of its revenue from international markets in the first quarter.

Net loss narrowed to $4.8 million, or 8 cents per share, in the quarter ended March 31, from $9.8 million, or 31 cents per share, a year earlier.

Revenue rose about 68 percent to $46.1 million.

Analysts had expected a loss of 6 cents per share on revenue of $44.6 million, according to Thomson Reuters I/B/E/S.

Active local business accounts rose 63 percent, while average monthly unique visitors increased 43 percent.

Yelp got about 79 percent of its total revenue of $137.6 million from local ads in 2012. (Reporting by Chandni Doulatramani in Bangalore; Editing by Maju Samuel)