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Yelp Made $83.3 Million In Revenue Last Year

Sites include . Published on February 29th, 2012. Written by Anthony West.

Another company founded or funded by the so-called “PayPal Mafia” is about to go public, but Yelp’s underlying performance is suspect—leaving many to wonder if the valuation being touted is sound.

Founded in 2004, Yelp has become a vital tool in the marketing and branding efforts of local business. This they achieve through leveraging the millions of reviews that Yelp currently channels through its millions of users. Last year Yelp made $83.3 million in revenues but that was dampened by news that it lost over $16 million overall. That losing trend seems to be affecting its core business because although the company managed to raise revenues year on year by 78%, it had a corresponding growth in year on year losses of 74%.

With a impending IPO, it’s difficult to tell if Yelp will be able to raise the $100 million or so its executive is aiming for. It’s also difficult to tell if the market will agree with the over $778 million valuation being touted by the company. But perhaps the biggest clunker is the fact that Yelp has never made a profit; every year since its founding in 2004 it has lost money.

How a company that has never made a profit can go public is beyond me.

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