Reports: Google in talks to buy Yap

Yap would instantly give Google millions of reviews of local business in hundreds of cities.

Google is rumoured to have made a $500 million offer for local social network Yelp, according to the New York Times. If the deal goes through, it will give Google a wealth of data to boost its local search results, according to Adam Bunn, head of SEO at Greenlight, an independent search marketing agency.

Yelp is a business review site, which contains hundreds of thousands of users ratings on thousands of local businesses and services, across cities and towns in the UK, US and Canada. It boasts over a quarter of a million users. As we know, user ratings is one of the central features of Microsoft Bing, and why it bills itself as a decision engine. More than 26 million people visit the site monthly, and at least 8 million post reviews, reports Bloomberg News.

By acquiring Yelp, Google gives itself a jump start in adding that feature. Says Bunn: "These kind of deals give search engines direct access to structured data allowing them to reliably and accurately incorporate that data into their search results without the need to go through the usual crawling and indexing process, and increasingly offer functionality directly to users rather than simply sending them to another site."

Says CNet's Rafe Needleman, Yelp is attractive to Google because the next frontier for search advertising is "The Yellow Pages" ... or searches for local information. He writes:

"The motivation behind Google's recent moves and its possible acquisition of Yelp is simple. The number is squishy, but Google estimates that anywhere from 15 percent of 40 percent of all search queries have some sort of local intent. A large number of those searches are also done from mobile phones, a number that will only grow larger as sales of the devices themselves continue to grow. And, of course, maps are required to find local businesses.

"That gives Google three ways to target someone looking for local information. They'll see an ad on the search results page for a local query. They'll see an ad on the Place Page for that business, which might soon be more attractive with Yelp content. And they'll see listings and ads on Google Maps when they try to find directions to that business, which might alert them to nearby businesse--which starts the cycle anew."

Google has cash to burn and, as CEO Eric Schmidt said last September, the search engine giant was ready to go shopping. And so it has. Its last acquisition was a double dip AdMob for $750 million and Gizmo5 for $30,000 in November. It bought reCAPTCHA in September for an undisclosed sum. A month earlier it bought video compression vendor On2 Technologies for $106.5 million. If this sale goes though, and Google announces no more in December, it will have purchased seven companies in 2009, and 60 since its first acquisition in 2001, according to Wikipedia (Deja for Usenet).

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