Yelp, the popular local review site, will soon announce a new $15 million dollar round of financing led by DAG Ventures. The valuation is rumored to be in the $200 million range. Yelp says that they will be using the money to expand geographically, add onto their sales team, and establish an office in NYC (they are based in San Francisco). This is Yelp’s fourth round of funding since their founding in 2004.

Yelp is also boasting some impressive stats: 8.3 million uniques in the past 30 days and over 2.3 million reviews (with the 1 million mark being reached on May 2007) (these are internal Google Analytics stats that the company shared with us). Yelp is in a competitive space with InsiderPages (acquired by Citysearch), and YellowBot. The real competition, though, will eventually be Google Local and Yahoo Local.

With this latest round, DAG joins previous investors Max Levchin ($1 million, Summer 2004), Bessemer Venture Partners ($5 million, Q4 2005), and Benchmark Capital ($10 million, Q4 2006). The company has now raised a total of $31 million. Revenues are rumored to be sub $10 million/year.

We just got word from Judy’s Book founder and CEO Andy Sacks that the Seattle startup will be shutting down operations, and most of the staff of twelve was let go today. The company had raised a total of $10.5 million over two rounds of financing.

Judy’s Book started off as a community driven review site for local businesses, but changed it’s focus in 2006 when the original model looked to be failing. The company de-focused on local reviews, and went more towards the shopping angle and local deals.

The assets of the company are being sold, and Sacks says the company is in discussions with a few interested parties.

Other players in the local review space have fallen in the last year, too. Intuit shut down Zipingo last summer, and Insider Pages sold for little more than the capital it originally raised to CitySearch.

Yelp is still standing and reportedly doing well, although fierce competition from Yahoo and Google as well as younger startups is looming. We sadly put Judy’s Book into the TechCrunch Deadpool.

It seems like every time you turn around there’s another site out there trying to help you rate this, that, or the other thing. There’s Rapleaf (people), StreetAdvisor (neighborhood), YourStreet (neighborhood), SodaRatings (soda), and the list goes on (we wrote about Urbanspoon yesterday). Now there’s a new one in private beta, GarageSeek, for rating mechanic’s garages in your area.

With GarageSeek users will be able to share their experiences with mechanics and rate them on several different metrics. When live, the site will provide a potentially very useful service, the ability to check reviews and avoid hiring a shoddy mechanic. However, while a complete database of real reviews is useful, a lot of review verticals don’t offer a real reason to contribute when they start and fragment reviews across multiple domain names users may not care to remember.

Yelp largely solved the chicken and egg problem that comes with user review services, even if they allegedly paid users for reviews to start. They raised over $16 million and generated traction on the service through having a system seeded with content, rewarding top users with over-the-top parties, and focusing on a service that a wide variety of people use frequently, restaurants. The other large people-driven review site, Insiderpages, had the advantage of $9 million in financing and starting back in 2004. Despite this, Insiderpages went through a slew of layoff and eventually sold off to CitySearch for $13 million.

Yelp is already in the auto repair category, and is poised to expose their audience to other review verticals as well. They’ve already moved into non-geographical service reviews such as media outlets. The one question these review verticals need to ask themselves is “Can niche vertical review sites survive up against one general review site, Yelp or otherwise”? My feeling is no.

Zipingo, the small business review site launched by Intuit in late 2005, shut down yesterday.

When it launched, Zipingo competed with a slew of other startups that were targeting local business reviews. Of the three that we mentioned - Yelp, Judy’s Book and Insider Pages - only one, Yelp, remains in it’s original form. Judy’s Book changed its model to focus on coupons and deals, and Insider Pages sold for little more than the capital it originally raised to CitySearch.

The message above is all that remains of Zipingo. Without coming right out and saying it, the reason they’ve shut it down is that no one was apparently using it. Comscore wan’t tracking them at all (see Yelp v. Insider pages below).

Other startups, of course, are joing this space all the time. Google and Yahoo will take their pound of flesh, but upstarts like AskPoodle are giving it a shot as well.

Zipingo joins the TechCrunch DeadPool.

The Insider Pages acquisition rumors that we posted on last week were accurate - later today Citysearch, a division of InterActive Corp., will announce that they have acquired the company.

The size of the transaction is not being disclosed, although our understanding from a source close to the deal is that the price is in the $13 million range. The company had previously raised approximately $9 million in venture financing from idealab, Sequoia Capital, and Softbank Capital.

Insider Pages went through a round of heavy layoffs in late 2006 in the face of intense competition from Yelp, Judy’s Book and others. The site has 2 million unique monthly U.S. visitors according to Comscore.

Update: The WSJ is now reporting this as well.

Update: See Troubled Insider Pages Acquired By CitySearch
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Insider Pages, a user generated review site for local businesses, has been acquired by a public company, according to sources close to the deal. I also spoke with Insider Pages’ VP Marketing Anne Raimondi, who declined to comment.

The company, originally founded by idealab, has faced heavy competition from Yelp and others. They closed a $8.5 million round of financing from Sequoia and Softbank Capital in March 2006, but let a substantial number of employees go at the end of the year. Another company in this space, Judy’s Book, made substantial changes to their business model to avoid the same layoffs.

Our understanding is that the acquisition price is more than the total capital raised by the company, but not by much. More details as they become available.

Silicon Valley based Insider Pages, one of the many user review sites that have sprung up in the last couple of years, has reportedly laid off 2/3 of their total staff recently. The news is coming from companies that are interviewing former Insider Pages employees.

The company, which is funded by Sequoia, Softbank and idealab, seems to be unable to keep up with the growth of competitor Yelp (and others) in this crowded space. Both Alexa and Google Trends suggest Yelp is the only company with any traction right now. Other companies doing something similar include Judy’s Book, Zipingo and Riffs.

I wrote about the increasing amount of bad news we are seeing from Internet companies yesterday. This trend will probably accelerate this year, and I think it is a sign of the overall health of the industry. A little bad news keeps the market sane.

Fred Wilson is saying that when we write about bad news we are celebrating it, and that it isn’t healthy. I don’t think that’s the case. We are chronicling the ups and downs of Internet startups, and I think people can learn just as much, if not more, by studying the failures as well as the successes. I also opened up a thread in the Forums to discuss whether or not the TechCrunch DeadPool is a bad idea. Let me know what you think.

Zipingo joins the ranks of local business review and ranking services such as Yelp, Judy’s Book (which just raised $8 million from Mobius Venture Capital, Ignition Partners and Ackerley Partners) and idealab’s Insider Pages.

Like the other sites, Zipingo aims to pair yellow page-like contact information for local businesses with user reviews. It was created (and owned) by Intuit.

Since all of these sites are well done, have similar feature sets and have financial backing, it will be very hard for any of them to gain enough critical mass to dominate the market. This is certainly an attactive space (combining local advertising with the potential for premium listings).

However, it’s my belief that a single, open API (in and out) yellow page service, with consumer ratings, could dominate this market very quickly. As great as these services are, they rely on centralized content and getting users to come to them to both write reviews and find a business. An open service could have an easy way for businesses to insert their listings (and pay for enhancement), and anyone could take the data via an API (enhancing the network effect many fold). I wrote about this very briefly last week in a post about companies that I’d like to profile but don’t exist yet (no. 7 on the list).

Back to Zipingo and the other related services, if there are any dedicated users who’s seen a unique feature or have noticed heavy user participation, please ping me.

Company: Yelp
Launched: in Beta (since late 2004)
Location: San Francisco

Yelp is a website that allows users to write and share reviews of local businesses. It also has social networking features (adding friends, groups, etc.) to share reviews with a trust network. The idea is that people generally trust their freinds’ recommendations.

All of this user-generated content on local businesses, combined with the Yelp search engine, also provides great inventory for Yelp to sell local businesses contextual advertising.

The basics of Yelp: create an account, fill in your profile, add friends and write reviews. Yelp attempts to auto-fill the business information on a new review. The review consists of a 1-5 star rating and a free text area.

Searches bring up local businesses based on your zip code and include paid advertising above reviews.

Yelp is available only in San Francisco currently and plans to expand to other cities over time. They are also rumored to be closing on a Series A financing.

There are a number of other companies that are targeting local business reviews in an almost identical way. For instance, check out Judy’s Book, profiled previously and idealabs’ InsiderPages.