Yelp keeping deals program but foreshadows a downturn

Yelp keeping deals program but foreshadows a downturn

Summary: Yelp is keeping its Deals program for now, but don't expect it to expand in the near future.

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TOPICS: Google
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After just four months, Facebook axed its Deals promotions feature. Although this might be seen as a victory for daily deals giants like Groupon and LivingSocial, among others, such a move could be foreshadowing the burst of the daily deal bubble.

Contributing to that possibility is a statement from Yelp, which has a daily deals product of its own. Although Yelp is retaining this program, that doesn't mean it's all "rainbows and unicorns," as Yelp's CEO Jeremy Stoppelman colorfully wrote on his company's official blog this week.

Stoppelman explained what he thinks about the current state of the daily deals market after launching Yelp Deals last year:

The space faces some real challenges... while consumers love it when you can offer them a great deal nearby, they're not so stoked when you email them a restaurant deal for a place in Berkeley, CA when they live across the Bay in San Francisco. We've also heard consistently from certain categories of businesses (very popular ones I'm afraid) that daily deals are uneconomic for them, which does raise questions around the sustainability of "50% off" daily deals for these types of businesses.

This definitely isn't the first time we've heard about daily deals costing vendors plenty of money. It's obvious that consumers aren't too thrilled by the whole daily deals spectrum as well based on a survey from PriceGrabber earlier this summer that found that more than half of U.S. consumers are overwhelmed by all of the emails they receive from these sites on a daily basis.

Yelp is also trimming down its original 30-person team dedicated to selling daily deals and local ads down to a group of 15. (Thankfully, Yelp is quick to point out that no one was fired or laid off but rather just moved to some other project.) This move on Yelp's part also points towards the fact that Yelp (and probably other companies with daily deals on the side) don't see this venture as a viable business like they might have six months to a year ago.

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  • YELP in HELL!

    YELP in HELL!
    We pray to The LORD that YELP EXTORTION is exposed in Federal Court! Manipulation of reviews is extortion! We pray that our

    LORD shows no mercy for all the emotional damage and EXTORTION they have inflicted upon small business owners and the

    children they support. YELP is a brood of snakes and scorpions and deserve to BURN ALIVE for their extortion, lies and

    slander. PRAY PSALMS 119 FOR THEIR DESTRUCTION!
    Say five times: "Archangel Gabriel destroy YELP! Now!"
    YELP WILL BE BANKRUPT SOON! ALL PRAISE TO ALLAH! The Merciful and Just LORD OF MAN and EARTH!
    jehova140
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