Axiom Offers 'Another Reason Why Facebook Is Likely Uninterested In Yelp'
In a recent note to investors, Axiom Capital Management’s Managing Director Victor Anthony looked into one reason he believes shows why Facebook Inc (NASDAQ: FB) (Buy rated) is likely not interested in Yelp Inc (NYSE: YELP) (Hold rated, $43 price target).
Analysts at Axiom have argued previously that they are “hard-pressed to see why Google and Facebook would buy Yelp, since they “both are organically replicating the review aspect and other features of Yelp’s business model.”
According to an article published on Grub Street, Facebook is trying out a new feature that will display critic reviews (along with users’ comments) for select dining locations across America. The professional reviews will come from publications like New York, Bon Appetit, Conde Nast Traveler, Eater and the San Francisco Chronicle.
Below is an example of the pro critics:
And user reviews:
If Facebook is launching a service that directly competes with the one offered by Yelp, why would it be interested in acquiring the latter, Anthony asks, adding that the company “could very well find a buyer,” but not Facebook or Google Inc (NASDAQ: GOOG) (NASDAQ: GOOGL).
On top of the aforementioned competitive threats, Yelp faces “a series of structural issues including: 1) declining salesforce productivity; 2) pressures on brand advertising due to the industry shift to programmatic advertising; 3) traffic growth is decelerating due to the desktop transition; 4) decelerating mobile traffic growth; and 5) advertiser attrition.”
Latest Ratings for YELP
May 2015 | Piper Jaffray | Downgrades | Overweight | Neutral |
May 2015 | Deutsche Bank | Maintains | Buy | |
May 2015 | Oppenheimer | Maintains | Outperform |
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