Home > Deals, Federal-State Coordination > Google Wants to Buy Yelp – Are Regulators in Sync?

Google Wants to Buy Yelp – Are Regulators in Sync?

Rumours that Google wants to acquire Yelp (for $1.5 billion) hit the blogosphere and newswaves earlier today. While local advertisers may be part of the attraction (Google’s Place Pages for maps, etc.), I think the bigger story here is how Google continues to fortify its social search assets.  A smart move as social networking – with its mines of user profile data – continues to grow in relevance for online advertisers.  Commentators, most notably Wired, have mused that Google’s real competitor is Facebook (it’s social, not relevant search that’s key).  If you take that view, this acquisition makes total sense. Yelp – with 9 million uniques and $30 million in revenue for 2009  -is growing at a rate of 80%, while that same number for Citysearch, its nearest competitor, is around zero.  Yelp is an important acquisition for Google, as it builds its social search platform to compete with Facebook and others for online ad dollars.

The interesting question here is how regulators will view the Google-Yelp transaction. Will they view it in isolation, or will they analyze how this deal fits in with the seven other Google acquisitions currently pending with regulatory authorities? The ramifications are huge – particularly for the small, but growing mobile advertising market. Especially, since one of those 6 other transactions is Google’s bid to acquire AdMob, one of the largest providers of mobile advertising (see my post; Scott Cleland’s blog on antitrust concerns with this deal are also worth a read). Yelp is already on your app phone of choice – including phones featuring Google’s Android – and the synergies are almost poetic.  Plus, there are the persistent rumors that Nexus One (the Google phone), will be released next year.

All of this suggests that regulatory agencies need to be working very closely on merger reviews of technology deals in the coming months.  Coordination on these merger reviews needs to happen both between the agencies – here the DOJ, FCC and FTC – and with state Attorneys General that choose to review these transactions.  Coordination is key to the outcome of a process that will impact continued innovation and competition in the communications and technology industries.  Perhaps too, we will gain some insight into how the tech friendly Obama Administration really views merger policy in dynamic markets.

  1. December 20, 2009 at 10:56 am

    I am not going to hold my breath and hold on to my iPhone for now.

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