Biz Break: Yelp gets strong recommendations after results

Top Of The Order: 

Give Those Guys A Good Yelp: It’s been quite the year so far for Yelp. In barely four months, the San Francisco-based online review and recommendation company has seen its chief financial officer abruptly quit, it was reportedly looking at possibly selling itself, and to top things off, Chief Executive Jeremy Stoppelman got caught up in an blogging-and-tweeting brouhaha after one of Yelp’s Eat24 employees was summarily fired after she posted a long “open letter” to Stoppelman about, among other things, how she could barely afford to eat on her wages.

So, maybe it was just time that something good went down for Yelp. Or, in the case of what happened Friday,  something good went up…Yelp’s stock price, which climbed almost 24 percent, to close the week at $26.50.

The impetus for Yelp’s muscle flexing was the company reporting better-than-expected quarterly results late Thursday. Yelp said it earned 8 cents a share on $158.6 million, while Wall Street analysts had forecast the company to earn 3 cents a share on $155.6 million in sales for the quarter that ended in March. Yelp’s results were helped by what is viewed as one of the key areas for it future success, local-based advertising. Local ad revenue grew 40 percent from a year ago to $139 million, with a total of 121,000 such accounts.

Yelp is also adding more local sales staff, and as those personnel begin to ramp up their accounts, Yelp’s revenue is expected to show more gains in the coming months.

“The pace of hiring is a leading indicator,” said analyst Stephen Ju, of Credit Suisse. “(And) given the usual 6-to-9 month ramp for new sales personnel to become effective, we believe the inflection point to Yelp’s revenue growth will arrive between the second and third quarters (of the year).”

Middle Innings:

Meanwhile, In Squaresville: While Yelp was surging, Square was having its corners shaved down.

Jack Dorsey’s company that’s not named Twitter was pummeled as investors beat up on Square’s stock to the tune of an almost 22 percent loss. Square’s shares ended the day at $10.22 after the company threw some cold water on expectations for its small business loan program. That effort has been thought of as a way for Square to expand beyond its hipster-cool digital payments technologies and point-of-sale registers.

But when you are looking to build your business in credit markets, and you say you are experiencing “challenging credit market conditions,” well, you aren’t going to get much credit, if you will, for what you have in mind for your future.

More For Medivation? Sanofi’s ongoing not-so-friendly effort to acquire San Francisco’s Medivation for $9.3 billion may be about get even less friendly.

Sanofi said it is willing to go to directly to Medivation’s shareholders should that company’s board reject its offer, or try to find other potential buyers. Sanofi made its initial offer of $52.50 a share public on April 28, Medivation turned down the bid, and since then, Medivation’s shares have climbed to $60. Medivation is best-known for its prostate cancer drug Xtandi.

Bottom Of The Lineup:

Here’s a look at how some leading Silicon Valley stocks did Friday…

Movin’ On Up: Gains came from Ubiquiti Networks, Aemetis, Arista Networks, ShoreTel and LendingClub.

In The Red: Data-security software company Imperva saw its shares plunge more than 25 percent after it gave a disappointing quarterly report late Thursday. Other decliners were FireEye, Impax Laboratories, Depomed and NeoPhotonics.

The SV150 Index of Silicon Valley’s biggest companies rose 0.3 percent to 1,574.

The tech-focused Nasdaq Composite Index added 0.4 percent to rise to 4,736.

The blue chip Dow Jones Industrial Average rose 0.5 percent to 17,740.

And the broad-based Standard & Poor’s 500 Index edged up by 0.3 percent to 2,057.

Quote Of The Day: “They’ve got the best cheeseburgers. It’s unbelievable.” — Golden State Warriors guard Klay Thompson, speaking about Burgerville, a Portland, Ore. burger joint. Thompson, who spent part of his youth in Portland, returns to the city this weekend with the Warriors  for Game 3 of the team’s playoff series with the TrailBlazers.

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Photo: Yelp offices in San Francisco. (Bay Area News Group archives)


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