What is the best way for Yelp to monetize generated reviews/content in the future?

Yelp was founded by two former employees of PayPal who noticed a lack of online information of consumer experiences with local businesses. Although the site’s popularity grew, providing millions of reviews of local establishments to both individual consumers and businesses, the company was unprofitable with an estimated $2- $6 million in revenues due to poor monetization skills amidst a recent decline in advertising spending. Due to the large success of building a community of reviewers, Yelp should focus its attention on developing its “Elite Squad” program to enhance trustworthy, reliable, and entertaining reviews, allowing the firm to update its monetization model by charging advertising and data fees to companies that seek invaluable consumer assessments of its venue and competitors.                                   

By 2008, Yelp had exceeded 20 million readers, many of whom were not contributing to the site. In order to capitalize on its competitive advantage, the firm must attract and maintain quality reviewers by rewarding the “Elite Squad,” therefore attracting loyal consumers and increasing its consumer base. This will entice businesses to take interest in the information learned from the site, increasing the willingness of companies to pay a premium to obtain invaluable information that will successfully assist in creating a competitive edge in its chosen neighborhood or industry. Additionally, if Yelp establishes itself as a reliable information source, companies will be willing to pay for advertising to target profitable readers, further increasing the profitability of Yelp. 

In doing so, Yelp must create pricing versions tailored to meet the unique needs of businesses by offering both high-quality versions of the site and subsequently lower quality versions. Furthermore, the firm plans to build large sales forces on both the east and west coasts. Its ability to form effective sales teams to support premium customers is crucial to increase profitability and enhance customer loyalty. Yelp clearly has the opportunity and skills to obtain substantial revenues and become a leading online information provider. Although it will be a challenge, the company must focus on its competitive advantage, quality information, and devise an effective business model to attract and maintain profitable customers.