More IPO Thrust to the Social Media Bubble: Yelp IPO Tentatively Poised for 2012

After the IPO rush by dot-com companies in 2000, it seems like the turn of the social media bubble to make its presence felt in 2011—a fact underlined by numerous IPOs launched by social media companies and more IPO launches expected from companies like Yelp.

San Francisco-based Yelp provides online reviews for local businesses. The company has indicated its plans to go public during the first quarter of 2012. Yelp has already hired Citigroup and Goldman Sachs for leading its IPO. Yelp is hoping to achieve an evaluation figure between $1.5 billion to $2 billion. It is expected that Yelp will file its IPO with SEC towards the end of 2011.

Yelp has not clarified its status in terms of profitability of its business model but some figures suggest a robust financial health for the brand. Its last funding phase of January 2010 presented valuation of nearly $500 million. The company has also raised in excess of $50 million through Venture Capitalists such as DAG Ventures, Benchmark Capital, Bessemer Venture Partners and Elevation Partners.

Yelp is yet to confirm its IPO schedule but has repeatedly confirmed intentions of going public. In April 2011, the company’s CEO, Jeremy Stoppelman, told the Wall Street Journal that the search for a CEO with credible IPO experience had already started. In July 2011, Rob Krolik was appointed as the CEO. Krolik was credited with helping Shopping.com in going public in 2004.

Yelp’s intentions aren’t surprising considering that recently, social media brands have generally fared well. In May 2011, the leading social networking site in the business niche, LinkedIn, impressed with an incredible IPO where its original pricing of $45 per share settled in the $80 to $85 range. However, Yelp might want to hurry through its public offering since some social media companies haven’t fared well. Leading social bookmarking provider Delicious was valued at $30 million while photo-sharing service-provider Color was pegged at $41 million.

Yelp’s IPO is estimated to go public after Zynga which goes public in the week preceding Thanksgiving and Facebook which is believed to go public before 2012 ends.

Source: International Business Times