Plugged In: The Transformation of Yelp into a Home Services Giant

Yelp's Resilience During the Pandemic

When the COVID-19 pandemic abruptly shut down normal life over four years ago, few tech companies endured more wrenching change than Yelp. The familiar tool for researching restaurants and retail stores “was kind of at the center of the bull’s-eye of the blast radius of the pandemic,” remembers Jeremy Stoppelman, its cofounder and CEO. With everyone stuck at home, traffic to the site plummeted by half. Eateries and shops that couldn’t stay open had no need to buy ads. This existential crisis led the company to lay off and furlough thousands of employees.

Reviving Business and Achieving Record Revenue

Today, with the world having learned to live with COVID, it’s not surprising that Yelp’s business has recovered. In 2023, the company hit $1.3 billion in revenue, a notable increase of more than 30% from 2019’s pre-pandemic total. Its revenue for the most recent quarter reached an all-time high of $357 million.

Adapting to New Market Conditions

As Yelp marks its 20th anniversary—its first review posted on October 12, 2004—it offers a comfortably familiar experience. However, while its homepage looks much as it always has, underneath the surface, the company hasn’t just bounced back; it’s also evolving. The 4,713 employees the company had at the end of 2023 represent a reduction of 20% from 2019. This change is partly due to a reduction in reliance on outbound sales as a tool for finding advertisers.

The Shift in Advertising Strategy

Stoppelman explains, “For years, what we would do to grow revenue was add more local sales reps.” The strategy involved an army of around 4,000 local sales folks reaching out to small businesses. Recently, local entrepreneurs have become more digitally savvy, partly due to the popularity of services such as Yelp, allowing them to feel comfortable buying ads using self-service tools. Additionally, a higher percentage of Yelp advertisers are larger operations with multiple locations, making larger, consolidated ad buys. The bottom line: Yelp has become more efficient at monetizing its audience’s eyeballs.