Strategic Deal to Boost Yelp, YP

Coming on the heels of its big content deal with Yahoo, Yelp has inked a strategic agreement with directories giant YP to use the vast YP sales force to sell its inventory. The deal expands Yelp’s sales reach while at the same time exposing YP advertisers to Yelp’s large and engaged base of consumer traffic.

We spoke with Mark Ugar, YP’s VP of business development, who said the deal was comparable to what YP already does with other local search players, including Citygrid and Dex Media.

“In this new world, YP advertisers will be able to manage their presence on Yelp,” Ugar said. He wouldn’t get into the specifics of how this would work, though he acknowledged this would be a premium level product for YP advertisers. The advantage for YP advertisers is convenience, getting their presence on both platforms managed through a single source.

The big difference is Yelp’s enormity as a consumer facing local search brand. In a recent post on Yelp’s blog, the company boasted of passing the 100 million uniques (worldwide) in a single month milestone in January. This figure that doesn’t even include traffic from the 9.4 million mobile devices carrying the Yelp app.

YP’s appeal to Yelp is pretty obvious. With 4,000 local sales people, YP is the player to beat in terms of local sales coverage.

Ugar said the deal will go live sometime over the next few months. He expects the deal to be just the beginning of a long term partnership between YP and Yelp.

“This opens up a lot of possibilities in local search,” Ugar said. When asked to elaborate, he demurred. “We will let you speculate on what those can be.”

So, taking that challenge, the most ambitious possibility to speculate is a combination of the two companies. In this age where everyone is trying to achieve maximum scale, no merger possibility should be dismissed out of hand. The combination would on balance be more complementary than overlapping. Another less bold avenue is deeper content integration, similar to Yelp’s recent deal with Yahoo, which our senior analyst Abid Chaudhry addressed on BIA/Kelsey’s most recent Analyst Roundtable.

“Neither deal reflects a change in strategy. The Yahoo deal was about surfacing more of Yelp’s rich local content in other places consumers might be looking for it, and follows on the heels of similar content deals with Apple, Bing, and car manufacturers,” said Vince Sollitto, Yelp VP of Communications.

“The YP deal is about Yelp gaining access to YP’s advertiser base by letting YP sell a basic enhanced profile on Yelp as part of their multi-platform ad network; this helps YP expand their ad network distribution and provides richer content for Yelp consumers. Yelp is happy to work with third parties that can help share more content with consumers or expose more businesses to the reach and benefits of Yelp.”