Yelp VP Mike Ghaffary: We Are Now a Household Name

Share this:


Last month, Yelp officially entered the commerce business. The reviews site bought Eat24, a delivery company who was an early Platform partner, pitching the company in direct competition with GrubHub, Eat Street and some of its own partners.

Mike Ghaffary, vice president of business and corporate development, spearheaded the acquisition of Eat24 and has led the Yelp Platform initiative from the start. We caught up with Ghaffary recently to talk about what the acquisition means for its Platform initiative, concerns among investors about slowing growth, and what makes “local” local.

Walk me through the acquisition of Eat24. The move seemed to fly in the face of the partnership-driven approach that defined Yelp Platform initially. Did the buy represent a change in Yelp’s thesis when it comes to commerce?
No change in the thesis. In fact, we just did another announcement a couple of months ago that we added hotel bookings, winery bookings, and we’ve been building up several different categories. We have a bunch more coming, so we’ve really gone pretty broad across platform and we are hoping to have several food delivery partners.

It’s a similar thesis and vision, but we saw food delivery was going so well and much like with a lot of platforms, when something’s doing really, really well, we decided to double down on it and go even further. We said, “Hey, food is a really important category for Yelp.” We were really impressed with what we had seen on our platform and we decided that taking a step even further to be able to expand coverage and further improve the user experience would make sense.

But there’s undoubtedly a conflict between Eat24, a Yelp-owned property, and the handful of other food delivery services on the platform, correct?
I think what you’ll continue to see from us is that if we can improve the experience for consumers by having more partners on the platform, we’ll just keep bringing on more partners. If an acquisition can continue to improve the experience, we’ll do that, too. That’s why you’re seeing all our food delivery partners still excited to work with us, still getting transactions, and still doing well in our platform. When they’ve got either restaurants that we don’t already have or for whatever reason they can offer a better experience, we’re going to work with them on that.

The growth of Yelp’s total unique visitors has been declining on a year-over-year basis for a few quarters now. And last quarter, we saw a sequential decline in those numbers. How are you dealing with growth on mobile — where there’s not Google to provide as much traffic?
One of the nice things with the shift to mobile is that we don’t have such a concentration of traffic coming from Google. People find us through a variety of sources, and we continue to see the organic distribution and downloads that we get from people finding out about our app from word-of-mouth. We continue to see a lot of traffic that way. In addition, nearly every major kind of mobile OS platform hardware manufacturer has realize how critical Yelp is and has built it into their local experiences. We have a major Apple integration — we now we’ve continued to double down as on our Amazon integration, Samsung integration, and Microsoft integration.

Talk a little about what those integrations mean for the company beyond just reach.
Yelp has become a household name that people just expect to see tied to local.  When they find a local business — whether it’s a restaurant or a dentist — they expect to know that there’s a Yelp branding for that business. You hear it now on television. You hear it in media, in conversations, just to a scale that was never the case when I first joined Yelp.

There’s plenty of other ratings out there, but the Yelp rating  is the most reliable that you can keep coming back to and consistently get an experience that reflects the rating you thought you were going to get.

As the web and real-world converge, the very concept of local is being muddled. The terms can means small business for some or brick-and-mortar for others. How do you think of local?
I think that’s a great question. My definition of local commerce has evolved to keep up with the times. It’s any time one person transacts with a business and has some sort of face-to-face interaction with another person or place. So that could be you go to a restaurant, that could be you go to the doctor’s office, it could also be and always has been your plumber comes to you. A physical storefront is certainly a hallmark of it, but somebody could come to you and it would still be local.

Ecommerce, I think, is more about goods being shipped to you from a warehouse. That’s a valuable business. I’m a big user of ecommerce stores and I ship things to my house all the time. It’s certainly convenient, yet I think people crave local experiences. I think what’s really interesting is in the era of massive ecommerce, you’ve seen a premium placed on local downtowns and what I would call like Yelp-y businesses.

Let’s talk international. Yelp has made a handful of international acquisitions recently, but growth has been slower than some expected.  
Luckily for us, our bread and butter revenue-wise and the majority of our focus in sales and other areas has been the U.S. As you know, there’s over $3 trillion of local commerce in the U.S. alone. That’s where the majority of revenue and growth has been, but again, there’s two kinds of growth. There’s revenue growth and there’s also users growth. Revenue growth for us just keeps going up and up and up and it’s largely driven by the U.S. and I think that’s great.

We, of course, want to bring this valuable experience to as many users around the globe as possible and eventually monetize that when and where possible, but we’ve always known that the monetization comes with a delay, too, so that’s a nice thing is that we can just continue to launch these markets.

Steven Jacobs is Street Fight’s deputy editor.