As far as revenue, earnings, etc are concerned, I agree it is really hard to see how these folks will make much money/ Must be holding out for the mythical and mystical “event”.

I love TechCrunch and respect the way you handle yourself on tv. I blogged the following questions at the end of some comments about your back & forth with Glen Kellman at http://mpayy.blogspot.com/2008/02/wheres-beef.html

My questions respectfully are as follows:

* What is the scenario that drives these valuations, and how frequently is that “Winner Take All”?
* What is the exit for these companies, and how frequently is that assumed to be a strategic buyer in the form of Google, Yahoo or Microsoft?
* Online advertising rose 25% last year, and is expected to continue to rise. However, there is clear evidence that click-through rates are falling to an industry average of about 0.25%. Search engine marketing text links are higher, but are they concentrated enough among the highly atomized online publishing community to run a business based on this revenue stream?
* What effect does the “Bandwagon Effect” play in many of these investments in crowded sectors? Money is also flowing into the Open Social/Data Portability sector with a number of players, most recently Gmail-creator Paul Bucheit’s FriendFeed. Similarly, as I discussed here, survey participants expected Clean Tech as the sector most likely to receive investments and be over-valued in 2008.

Take care -

–
Trace

Do a search at Google for “Carol Leong Electrolysis” and her Webcard is the top result. (At least as of 2/28/08)

Another example is Ana Furniture. Their Webcard shows up higher on Google than their website, and they’re not even a customer of ours yet.

- Hal

That’s a good point on the SEO of smalltown. However, since it’s so targeted to small towns, would it get the volume it would need to appear in results anyway?

mariano.

Try http://www.smalltown.com

Post #36 is right. There definitely is some real money to go after — as a chunk of the $15B in print yellow pages moves online.

But serving small businesses is difficult work. And it’s not clear that Yelp has an appetite to tackle this — let alone already have mastered it.

Folks who are trying to build a business would test out a model(s) in several cities. And then once they validated one, would replicate it elsewhere. Without a profitable model in your early markets, what exactly will a salesforce and more office space do?

Wait a minute. Did I say build a business? I’m missing the point, aren’t I? Time to join the party. Where’s Stoppelman? Jeremy, we’re running low on wine.

OK, even if they’re “relative” numbers, how can Yelp claim *100%* greater traction than these third-party indicators?? A factor of 2x?? No way.

Quantcast, Compete and the others really are only good for trends and relative numbers - not for absolute numbers. For comparison (which of course you can’t verify either), compete is showing less than a quarter of the UU analytics says and quantcast less than half.

The trends they display are about right though!

- ask

And yes, there are those local sites that are doing well in this arena, they just don’t have a $31MM investment and $200MM post valuation over their heads. I like the lower-cost approach to this market, just because spending your way to it hasn’t proven to me an effectively sustainable strategy for the amount of time it takes to get over the hump.

They will need to be pretty good at execution to roll out the plan adding more cities, and , off course, selling local …,
mariano.

The CPM rate doesnt support the $28 P/U either so it really baffles me why DAG is accepting such a high valuation.

A

We are going to see a lot of movment in this space….it’s the next big market.

There are plenty of other local sites outside of “the big guys” that do well. They’re not all local search sites, either. Some of them are SEM companies, for example. There are also many other opportunities for moentization outside of having your own customers (there are plenty of local search sites partnering with similar sites to distribute their advertisers, for example).