Sure, there's a lot of room in this space for competition, but it isn't looking good for Yelp's competitors.
(Alexa is unscientific, I realize - but roughly accurate at the higher volumes. The bottom two sites are InsiderPages and Judy's Book. The blue breaking-out line is yelp. The top two are CitySearch (red) and SuperPages (cyan).)
It's fairly well known in insider circles that Yelp's startup competitors, InsiderPages and Judysbook, have struggled. This isn't the place to further examine why, but an easy and true answer is that there can only be so many winners in a space. As always, would-be destination sites are competing for valuable user attention and loyalty.
There is also a potential vulnerability in the bigger traditional (superpages) and nouveau (CitySearch) listings providers. Their support seems to be gradually eroding.
Meanwhile: new startup local search and review services are launching (such as
Another business model consideration is that sales effort alone can't sell these listings. If local business owners - confused about online to begin with - are being besieged by salespeople for local listings sites, it's only those with strong brands or those with "hot" brands that can really rely on business owners paying attention to their sales pitches.
Putting it all together and looking at the strong indicators in the user numbers, I'd conclude that Yelp will triumph amidst the chaos and will likely get its favorable buyout price.
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