Yelp Posts Q4 Loss, CFO Resigns

[danso]

Yelp in 2014 Q4 had revenue $110M and a profit of $32.7M [1].

Its revenue for Q4 2015 is $154M and a loss of $22.2M [2].

I see that there is an income tax expense of $20.3M in 2015 and other depreciation costs...but is this change in profit with growth in revenue typical?

[1] http://www.yelp-ir.com/phoenix.zhtml?c=250809&p=irol-newsArt...

[2] http://www.yelp-ir.com/phoenix.zhtml?c=250809&p=irol-newsArt...

[timr]

This is really the only interesting question regarding the CFO's resignation. The CFO isn't responsible for revenue growth, but would be on the hook for something like a bunch of previous quarters' botched taxes.

That said, it could just be that Krolik resigned to do something else. It's not like he was fired and kicked out of the office -- he's given notice, and they're looking for a replacement.

[fspeech]

That kind of swing is unlikely in this line of business. Checking the 8k shows that Yelp had a one-time writeup of tax assets in 2014.

http://www.sec.gov/Archives/edgar/data/1345016/0001144204150...

[dopamean]

I wonder if there was something they delayed accounting for in Q4 of 2014 that allowed them to have that profit. What do the numbers look like for the quarters in between?

[Steko]

I wonder when they intentionally crippled their mobile website because that's when I uninstalled their app.

[mark_l_watson]

The top three stories on hacker news right now are about top management resignations in three high profile tech companies. Earlier, LinkedIn lost 40% of their value in a day. Deutch Bank lost 11% of their value today.

sorry to be off topic here, but these seem like crazy times.

[aaxe]

A great read before people get on the "Yelp removes bad reviews if you pay" bandwagon: http://screenwerk.com/2016/02/02/reviews-rashomon-plumber-re...

[josephjrobison]

I'm 90% sure that the people calling about removing bad review are shady marketing services companies that are offering this.

The same thing happens with Google. Someone says "hi I'm your local Google specialist..." They're not exactly claiming to be from Google, but it's confusing to an offline small business owner that thinks Google is calling them.

I've heard many of these messages for Google. I don't recall any from Yelp, but if you have any friends or family that claim that Yelp is doing so - ask to listen to the recording. I wouldn't be surprised if it's some other company claiming they can help.

I too have heard from a few businesses telling me directly that they don't trust Yelp and they know someone who got threatened. But like the parent comment said, it's hard to find a direct link.

At the end of the day it's shady businesses claiming to be a Yelp or Google specialist that are muddying the waters from what I can tell.

[stordoff]

I'm not on the bandwagon (I don't use Yelp regardless, and I suspect long-term it would be damaging to the brand if good Yelp reviews don't correlate with good experiences), but the evidence Yelp present here is hardly cast-iron. I can see a number of ways such a suggestion could be made without it being evident in those recordings, such as:

- [Unlikely] Recordings have been edited, or certain recordings not disclosed

- Additional contact before/after this series of interactions where review removal was discussed

- Threats not made to this plumber, but another company/plumber who passed on a warning

- Raised by the plumber, and so not recorded ("Will you remove my bad reviews if I advertise with you?" "Yes, sir, we will do that" sounds perfectly benign if you only hear the Yelp end)

- [Not Yelp's fault, though could warn against(?)] Scam by a third party - Attempting to blackmail the plumber by pretending to be Yelp and threatening to post bad / remove good reviewss

[kevindeasis]

Wow, there are soo many resignations happening this week! I am stunned. Anyone have articles on how this happened and what it means?

[finance-geek]

I was thinking the same, but it is earnings season in a down market...

[awqrre]

Do they all know that a crash is coming?

[Mc_Big_G]

Anon from elsewhere - "It's called smart money cashing out at the top." He's not wrong.

[pippy]

Could it be the hike in Federal Reserve Rates causing credit tougher to find?

[perseusprime11]

Yelp is kind of stuck like Twitter. Product is not shaping up well. I am not sure how they plan to grow without improving their product. Their mobile app still kinda sucks

[neptunespear]

Why is Yelp untouchable by the FTC or DoJ? The company gets up to some really shady stuff but hasn't faced much punishment if any.

[010a]

Because every time the FTC/DoJ investigate it turns out that most of the accusations are unfounded.

[tyingq]

This looks like the California DOJ dangling some bait : )

http://www.yelp.com/biz/california-department-of-justice-doj...

[pgrote]

What is the shady stuff?

[kloncks]

Serious question.

Yelp's revenue model is a bad conflict of interest. They rank the destinations AND the destinations have to buy advertising too.

What revenue model could they do that would work and not be shady? I can't think of one. Charge users?

[ziszis]

It's not that strange. Google does the same more or less.

Search for "insurance" on Google. Google ranks a bunch of insurance companies: Geico, Statefarm, etc. They also show ratings for some specific agents. Google also sells ads if you want to drive more traffic and not just be in the organic listings.

You can find nuanced differences between Yelp and Google, but the problem is not conflict of interest. The problem is that businesses are not seeing enough value in the ad product that Yelp offers. Many advertisers dislike Google, yet they still advertise.

[ececconi]

I've replaced Yelp with Foursquare a while ago for finding things around me and trusting reviews. I've found that the character limit and smaller user base of Foursquare makes reading reviews a much more pleasant experience. I also like how there is no star system on Foursquare.

[ryanSrich]

Honest question. How do you know you're in the middle of a bubble bursting?

[chadzawistowski]

When it's become so obvious that everyone is asking the question.

[alanwatts]

What exactly do you mean by "bubble"?

[bpg_92]

These seems worring indeed, are some bubble poping now? Maybe it's just overreacting, but hopefully the trend won't continue.

[dang]

It's likely just random, with the human bias to read patterns into randomness hot on its trail as always.

[jorgecurio]

What do you predict will happen to Yelp this year?

[nugget]

Someone will acquire them. The brand and employees are worth a billion dollars, in my opinion. Local is a very difficult market to crack.

[DonHopkins]

Foursquare will buy them, to get back into the Foursquare business.

[hiddencost]

Amazon. Alexa already integrates with Yelp, and Amazon would love to have all that tasty local commerce data. All kinds of interesting things they could do to integrate with Yelp (Amazon have _so many products_)

[SatoshiRoberts]

They will be acquired by Twitter or AOL/verizon

[ratfacemcgee]

Yelp, Zenefits and Paypal. What is going on?

[smt88]

Yelp: Very hard to monetize. Because they chose a model where the businesses who pay them are also the businesses being reviewed, they've given themselves a conflict of interest. They've chosen to sell their integrity, which makes their star ratings less reliable/valuable, which makes users trust them less, which makes businesses want to advertise less. It's a vicious cycle.

Zenefits: Broke the law. Also an insanely ambitious, brilliant, risky business model.

PayPal: Hated by most people/customers. Can't wait until they go out of business completely.

[meritt]

http://avc.com/2016/01/ch-ch-ch-ch-changes/

[hasenj]

Could it perhaps be related to the recent LinkedIn plunge?

http://www.businessinsider.com/linkedin-earnings-q4-2016-2

[Apocryphon]

Maybe they're going to launch a startup together.

[feld]

He was probably told he has to give the CEO a 5 star rating or he would be fired.

edit: i have no idea if they have an internal person-rating system based on yelp, but i hope so

As far as the recent resignations, it's probably New Years resolutions when people realize they value time over money.

[jack9]

It aint his fault, so he must have another opportunity.

[bcook]

Downvoters should be required to cite their reasoning. This would presumaby hinder illogical, kneejerk, emotional downvotes.

We are here to learn & understand (perhaps painfully), not anonymously persecute.

Edit: I did not consciously realize the parent was "logicallee". ;)

[dang]

We detached this subthread from https://news.ycombinator.com/item?id=11062422 and marked it off-topic.

[pvg]

Downvoting is hardly persecution. It just means someone doesn't like your comment. They don't owe you an explanation and the site's author has explicitly stated one is not required. Think of what would happen if every downvote of a low-quality comment had to come with a polite note justifying the action. Noise explosion.

[dschiptsov]

The second dotcom bubble is finally abouy to burst?

Github, Twitter, LinkedIn, PayPal issue and bunch of small ones.

[justinzollars]

THERE MUST BE MORE TO THIS STORY. -recent paranoid end is nigh HN user.

[TeMPOraL]

Well, come on. A few days ago 3 news stories about companies losing stock value. Now, 3 stories in a row about company executives resigning. What's going on in the Valley? :O.