It’s official: Yelp has now turned away more suitors than Penelope, the long-suffering wife of Odysseus.
In December, the blogosphere reeled at the announcement that Google was stepping-up to buy restaurant-review site for a cool $500 million. Not bad for Yelp, considering it brief history as a startup, nor for Google, considering its botched attempts to dominate the local review market.
Observers did a double-take a few days later when it was announced that Yelp had walked away from the offer, citing fiduciary duty. It was further disclosed that an unnamed suitor was willing to pay more than 50% above Google’s offer price. Some observers correctly predicted that the only company desperate enough to make such an offer was Microsoft, which has never balked at paying excessive prices for a piece of the social networking pie. We now know that it was, indeed, Microsoft, which approached Yelp with an offer north of $700 million.
Which Yelp rejected.
Founder Jeremy Stoppleman is now sharing more details about his vision for the company, including a distant IPO:
Yelp “will definitely not go public this year,” he said. “2011, who knows? But why rush out the door if I can avoid it?”
This disclosure suggests at least a couple of things–
- Yelp has enough cash in the bank to make it for a while, to which its recent injection of $100 million from private equity-shop Elevation Partners certainly attests.
- Yelp estimates its true value north of $1 billion.
- Yelp expects the IPO market for tech startups will significantly improve after 2010.
Time will tell if Yelp’s holdout strategy will work. It is a risky business, however, considering how quickly the market can turn against review sites.
Just ask CitySearch.





