The bottom line is that Yelp’s service is incomplete and has suspect reviews and ratings, and even questionable stats.  However, they are the best of a bad bunch of local information and recommendation engines.  At this point, when you buy Yelp! you are buying the scarcity of their platform.  They are doing a great job of pushing their mobile app and partnering with folks like Apple – and they extract a premium from local advertisers with few options.  Consumers use it mostly because there are no alternatives.  So while we are not likely to buy the shares, and don’t think their system is all that great, we are reminded of many tech companies that came before them that either went much higher before coming down to reality, or never came down at all due to first mover advantage.  We don’t like Yelp! but have to respect the price action.

Angie’s list is another great alternative – though the pay for model is a turn off to many who end up hooked on a service like Yelp after just looking for something immediate and free and then returning.

True, it is only a matter of time before the players with huge networks, algorithms and data make a dent in this market – but the end game of how best to show results, keep data fresh, and who and what type of reviews people want is so unknown at this point I don’t think the end game is known until 2014