GROUP 7 | INÊS OLIVA | JOÃO LAMARÃO | NUNO LOURISELA | RICARDO CANAS

MANAGEMENT INFORMATION SYSTEMS

A G E N D A

Industry Analysis

Market Trends

Porter 5 Forces

Yelp

Business Model

Competition

Competitive Advantage

Value Chain

Revenue Model

The Future

I N D U S T R YA N A LY S I S

Every business wins and loses new customers every

day before the potential customer even sets foot out

the door.

With so many businesses to choose from, being number

one on Google is almost never the only deciding

credibility or trust factor.

ONLINE LOCAL BUSINESS RATINGS AND REVIEWS PLATFORMS

These days, you’re dealing with an educated customer

who does their research and does not care what you

have to say about your business: they care what

others have to say.

Welcome to the word-of-mouth marketing

I N D U S T R YA N A L Y S I S

I N D U S T R YA N A L Y S I S

72% of consumers trustonline reviews as much as

personal recommendations

52% said that positive online reviews make them more likely to use the local

business

16% of consumers said they used the Internet

every week to find local businesses (vs. 9% in 2010)

27% of consumers regularly use online

reviews to determine whether a local business is a good business (vs. 22% in

2010)

There’s a decline in the number of reviews being read by consumers – they

are forming opinions faster and trusting reviews

more.

The continued growth of mobile internet usage

suggests that more and more consumers will be

searching and finding local businesses online

I N D U S T R YA N A L Y S I S

YELP

Y E L P

an online platform with ratings

and reviews of local businesses

Y E L P

Connecting people with

great local businesses

Businesses, both small and large, use ourplatform to engage with consumers at the

critical moment when they are deciding whereto spend their money.

Y E L P

Founded in 2004 to help find great local businesses like dentists and mechanics, and can be used to find events, lists and to talk with other yelpers

As of January 2013, Yelp

reached 100 million unique visitors on its

website

In 2012, the mobile app was

used by 9.2 million people

Yelpers have written over 36

million local reviews

Every business owner (or

manager) can setup a free

account to post photos, video and message his customers

Yelp makes money by selling ads to local

businesses and brand advertising

You can access Yelp via iOS, Android, Blackberry and other mobile OS’s

Yelp is traded on the New York Stock Exchange

Y E L P

Y E L P

Net loss for the full year of

2012 was $19.1 million, or $0.3

5 per share, compared to a net loss

of $16.9 million, or $1.10 per share, for the comparable period in 2011

Total net revenue of

2012 was $137.6 million, an

increase of 65% compared to $83.3

million in 2011

Active local business

accounts grew 68% year over

year

Average monthly unique

visitors grew 31% year over

year

Cumulative reviews grew 45% year over

year

%

Y E L P

TECHNOLOGY

Search and Ranking Technology Review Filter Mobile Solutions

Network Security Internal Management Systems

Y E L P

ARCHITECTURE

EAI – Enterprise Application Integration

ERP CRM SCM

Y E L P

Y E L P

SELLING ADS TO

Local businesses Brands

80% 15%

Others

5%

Y E L P

Y E L P

TARGETED LOCAL ADVERTISING

Advertise on Yelp search

Advertise on related businesses

Removal of competitor ads

Y E L P

9.2M Mobile devices

2012 Q4 Total Yelp Searches

Integrated Mobile Ad

Y E L P

Y E L P

Y E L P

Y E L P

Key Partnerships Key Activities Value Propositions Customer Relationships

Key Resources

Customer Segments

Channels

Cost Structure Revenue Streams

Companies

Software Development

Selling adds to Local business

BrandAdvertisement

Local Business Costumers Profiles

Internet

Staff

Advertising for companies

Software

Screening Reviews

IT Infrastructure

Microsoft’s Bing

Giving the opportunity for

Local Business to Advertise

IT Infrastructure

IT infrastructure

Facebook

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Firm Infrastructure

Human Resource Management

Technology

Procurement

Serv

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Human Resource ManagementHigh qualified workers

Technology Research & Development – most important function to be always improving

OperationsUsing the activities developed at the stages of support activities will promote the final service

Serviceactivities that maintain and enhance the product's value including customer support (feedback and advice)

Y E L P

Y E L P

Coverage

Review Trust

Search rating system

Community style

Easy to use/design

Connection with other platforms

VALUABLE

RARE

INIMITABLE

NON-SUBSTITUTABLE

Free handy guide for local businesses.

Not many platforms have so many user-generated reviews.

Yelpers experience – not a mobile-only experience (content provides website engagement)

Industry/Sector coverage

Y E L P

Y E L P

S T R E N G T H S W E A K N E S S E S

O P P O R T U N I T I E S T H R E AT S

100 million monthly users (network effect) Users generate the content Low costs (operational) Local reviews aligned with social network Peer feedback mechanisms Placement of the popular reviews Integration with mobile devices Augmented reality Mobile monetization

Potentially legitimate reviews caught in Yelp’s review filter

Revenue model Their customers (small businesses) have

limited budgets to spend on advertisement Low switching costs (small businesses can

change easily to Google or Facebook ads)

Entering new markets Developing their social network platform Gamification through augmented reality

Lawsuits Privacy issues Facebook and Google competition

THE FUTURE

T H E F U T U R E

Europe - Portugal, Greece, Czech Republic, Hungary, Luxembourg and Russia South America – Brazil, Ecuador, Colombia, Chile and Peru

Asia – China, Japan and Macau

T H E F U T U R E

1. From review provider to a social platform

2. Brand Advertising

3. Platform Expansion

4. E-Commerce

5. Mobile Monetization

T H E F U T U R E

1. From review provider to a social platform

Intensified user engagement

More interaction between them

More contribution to

the site

Incremental reviews, photos, etc.

Increased user traffic in the platform Gain momentum

Create network effect

T H E F U T U R E

2. Brand Advertising

It is a big revenue potential

Increased number of users engaged in the social Yelp platform will create the network effect

It will attract brand advertisers with big budgets

MORE MONEY

T H E F U T U R E

3. Platform Expansion – Key Platform Improvements

Social/User Generated

Content

Service offerings More integrated check-in capabilities (checked in, bought X,

with friend Y, for event Z)

Editorial Content Professionally written content Travel guides Visual and video content – Yelp Channel/Magazine

Expanded Platform

Open up their website for 3rd party apps – let the users choose what they want to adopt

T H E F U T U R E

3. Platform Expansion – Key Platform Improvements

Higherconversion

rate

Increasedrevenues

Check-in capabilities

Social network

platforms

New ReviewFilter

T H E F U T U R E

?. Scenario Analysis

% Values ($M)

Local Business to Advertising Conversion Rate 4%

Local Business Revenues 80% 110,08

Brand Advertising Revenues 15% 20,64

Other Revenues 5% 6,88

Total Revenues 100% 137,6

T H E F U T U R E

?. Scenario Analysis

Pessimistic Most Likely Optimistic

Local Business to Advertising Conversion Rate 4,5% 6% 10%

Local Business Revenues 123,84 165,12 275,2

Revenues Increase 12,5% 50,0% 150,0%

T H E F U T U R E

4. E-Commerce

Deeper integration with merchants

and more creative offers

Gift cards, ticketing for events, create their own payment and loyalty solution

They need to enter into the part of the transaction, not just at the endpoints (discovery and review)

T H E F U T U R E

5. Mobile Monetization

Gamificationthrough

augmented reality

MobileAdvertising

THANK YOU