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Summary:

My search for a top-notch ramen joint returned quality recommendations from both Twitter (as to the restaurant) and Foursquare (as to actual menu items), all in near-real time. Which made me wonder if services like Yelp have a future in our increasingly always-connected world.

Om’s note: I wrote this long before the rumors about Google buying Yelp for $500 million started flying around. In my post from today that breaks down the Yelp-Google deal, I explain why it is a good move for Yelpers to take the money and run. I also say that it is a good move for Google in the short term. Over the long term, value of Yelp is limited.

The cold and damp December weather has taken hold here in San Francisco. It’s the kind of weather that forces you to stay indoors and hang out with friends — and find comfort in warm food. I typically don’t eat out thanks to some diet restrictions, but occasionally it’s good to break the rules. Like earlier this week, on the 8th birthday of GigaOM.

My friends and I settled on piping hot ramen noodles, but couldn’t agree on where to get them. In light of a conversation Liz and I had just had about how much she likes the tips she gets via online networks like Foursquare, I asked my Twitter followers to weigh in. The answers came back fast and furious, most of them pointing us to Katana-ya.

Once there, I turned on Foursquare to log my whereabouts (aka “check in”) with the service and, as expected, found some great tips on what to order. And while the soup I ended up with hasn’t done my salt intake any good, it sure lived up to my Foursquare-induced expectations.

Like Liz, I once would have turned to Yelp in order to make such a decision. My Twitter + Foursquare experience, by comparison, was simpler and more importantly, “friendlier” because it involved people in my social graph (it’s important, for the sake of our virtual relationships, to keep the fidelity of their messages high). And it all happened in near-real time.

This near-real-time interaction — and its outcome — makes me wonder if older services such as Yelp have a future. The growing popularity of smartphones such as the iPhone and BlackBerry are already impacting our usage behavior, making access to information more portable.

More importantly, virtually omnipresent wireless connectivity is impacting how we seek and consume information — and boosting interest in (if not mainstream adoption of) real-time social environments such as Foursquare and Twitter. When a service is assigned a time value, its DNA undergoes a mutation.

Indeed, in this new, always-connected world, spontaneity is going to be a defining feature of successful applications, and Yelp doesn’t have it. Yelp is a great place for leaving reviews and always will be, but like many web services of yore, it was crafted with a fixed connection in mind.

I wonder how many companies will find themselves on the sidelines as this shift towards a more dynamic, interactive and immersive Internet picks up steam.

This article also appeared on BusinessWeek.com.

  1. Couldn’t agree more. The main reason Twitter + Foursquare trumps Yelp is simplicity. I don’t have the time nor the patience (unlike the “Elite”) to review every restaurant I visit. It’s either 140 characters or Zero characters worth my time :)

    BTW, it’d be nice if the Om network had Facebook and / or Twitter connect for commenting purposes. And, someday, hopefully a LinkedIn login as well :) Just a thought.

    Mario

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  2. All true. However, a good (and have to be good) update to Yelp! iPhone app could tip the balance a bit. Currently Yelp! iPhone app already has tip feature (but not well designed). If they can work out some check in/out and more real-time interaction, Yelp! can still live for a while.

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  3. I totally agree with you. I find myself using Twitter + Foursquare to get around and “check in” to most NYC spots. I would go a step further and say that – Twitter should either buy Foursquare or at least go into a joint venture. It would be a fantastic team-up.

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  4. Good points, but most people do not have the extended, connected, urbane, realtime social graph that you do, so in the near and medium term as far as mass market products are concerned, aggregator services that already have critical mass like Yelp have a secure place. When the shift that you describe shows signs of life, Yelp should already be prepared and positioned to add the social graph. In the end, it’s a battle to provide the best user experience including the success and accuracy of recommendations. Let’s take a seat and who will deliver on this promise.

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    1. Howard,

      I disagree with you on “how size of social graph” matters. Liz wrote about this earlier this week (I linked to her post) where I got the idea in the first place and she points out that the fidelity of the network (social graph) is what matters and not the sheer size. I didn’t want to repeat that.

      I think the point is that the tools of discovery are going to change over next few years. Hope that clarifies my position.

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      1. Om, we agree on key points: discovery tools are shifting toward “people-close-to-me-right-now curation”, no doubt about it, and that quality matters much more than quantity. I did not mean to suggest that a large number of people in your net trumps quality/closeness. (See how I tried to avoid saying ‘size matters’? :-))

        On the other hand, too small a number does matter.

        In the real world, today, I believe that a huge majority of people will hear only deafening silence about recommendations once they veer off of their geographical home turf, where they already know a lot of what there is to discover. This would be Yelp’s battle to lose. If they are not already thinking deeply about how to answer this challenge by intergrating the intimacy element, then yes, RIP, ciao, bye bye, been nice to know ya.

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      2. Om,
        As a person with a smaller less connected social graph, I found the same twitter/facebook query (i.e. where can I find X in Y) failing too many times.

        Thats what yelp rocked at. If you do not have a large or great (as in people who know things) social graph, Yelp will still tell you whats hot and happening. And the obvious matter of being in a new place.

        I think twitter will not replace yelp, but foursquare definitely can. It has too much good data. And in the end thats all that matters.

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    2. Replying to your second comment, I think if you think of the world in “just here and now” then you are right.

      However, if you are willing to peer into the future, how long do you think something changes. Jerome brings up a good point: if you veer off the home turf, then Yelp becomes good for tourism. Its current use case that revolved around being a local social network changes and so does its entire business model.

      I think what we are seeing is the new way of doing these kind of things. What is not to say, Facebook can’t develop such an engine inside its four walls and well be more effective.

      Further thoughts?

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      1. I agree with you 100% on that! I’m just saying that the direction, speed and shape of these changes is very much up for grabs for reasons already stated. Who can argue with that? ;-)

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  5. I don’t agree Twitter and Foursquare = Yelp’s death (yet).

    I think they still answer different needs. (It may change, however).

    I use Yelp a lot but in other cities when I don’t know where to eat in the area I’m in. It’s a much more efficient and quick way to decide.

    In my city, Montreal, I use Foursquare to check in and mostly discover places and what to order from worth of mouth. Sometimes, Foursquare tips can be useful, but very rarely.

    So, my opinion is Yelp is more like a guide for tourism/travel and Foursquare/Twitter are more about hanging out with friends.

    Maybe if I had tens of thousands of followers I would completely agree with you because then, I would never eat or go out alone in any city and there sure would be people to tell me to best places to go.

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    1. Jerome,

      Please read my response above to Howard regarding the size of the social graph.

      On the timing — death is a slow process and from the way when I try and look into the future, the decline has started for Yelp. In my analysis of the Google-Yelp deal rumor, I pretty much point that out. I hope you get a chance to read that. I think it would address some of your questions.

      On the travel/tourism aspect, sure that sounds like a reasonable development and an interesting observation.

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      1. Om, I read your post on the Google-Yelp rumor and I see what you mean.

        I also agree on your point to Howard about the coming disruptions in discovery. We’ve just seen the tip of the iceberg in that area.

        On the other hand, Yelp could have some social graph elements coming up it sleeve… But, if they are bought by Google, they’ll probably die a slow death anyway. ;)

        In any case, reading your follow-up comments, I think you’re probably right after all.

        One thing is sure is that both Yelp and Foursquare have to evolve to eventually pick the winner. Foursquare is missing good classification and contextual search. Yelp lacks in social discovery. Foursquare’s tips are cool, but it’s hard to quickly discover the best places just by doing a local search. Better ratings aggregation would help, I think. I believe social recommendations from people you trust are better.

        Thinking about it, adoption of both Yelp and Foursquare is not too high in Montreal. I found Yelp to be pretty useless here as a local but Foursquare, not so much. With more data, I found Yelp quite useful in major cities in the US but Foursquare wasn’t that popular yet at that time… Because of this, you probably know better! :)

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        1. Thanks Jerome,

          I think FSQ (or any other service like theirs) will need to reach scale and some sort of a tipping point but it is not clear which one. I think this is the first inning of what will be a 12-inning game and it would be lot longer things get cleared up.

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    2. I’ve been using Aardvark more than Yelp when travelling (score 1 for social and near-real-time, I guess). But I agree that Foursquare, in Montreal, still doesn’t have scale where it becomes truly valuable. It’s still just a silly geekgame at this point. Not enough iPhones on the street yet, I think.

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  6. +1 to Howard’s statement

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      • 1 to my response to Howard.
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      1. Did you really just award a +1 to your own comment?

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  7. “I wonder how many companies will find themselves on the sidelines as this shift towards a more dynamic, interactive and immersive Internet picks up steam.”

    Om, I think the question to ask should be the usage scalability measured against realtime issue. It seems when you look at how your users do things that makes the most sense to their lifestyle and disposition, then you see where a service feature set fits within that scale. Im in dev on a more traditional social net that based on the target user makes a lot of sense to how they do things and interact with their peers. So Yelp may find its niche shrinking and the sell off may be warranted but someone will more than likely find value in that service process no matter what happens to the developer.

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  8. Om, only in Silicon Valley could a post like this have been written. No disrespect (and you know I mean it), but the world outside the real-timesian bubble still has a lot going for it, Yelp included. Death’s a slow process, as you said, so I could say anything A + B = Z RIP, and chances are it is true. Doesn’t mean it is logical.

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    1. Rafat …No disrespect taken.

      You are right: this is only in Silicon Valley type of post, because some one would dare to think about what are the implications of the various technology trends and what it might mean for the future.

      Five years ago when I was sitting down with one of the guys who had the original idea for Yelp (not current co-founders and not the early backer), he also met the same kind of resistance about how it wouldn’t work.

      You have have made no counter-argument to argue against my thesis. Jerome and Howard asked specific questions and I have answered those. If you read those response and the post, then you know what I am talking about is a larger, web trend.

      You might like to dismiss this as a “Real timeseian bubble” but the reality is that the information consumption patterns are changing. Sure there are those who are on the leading edge of this change, but that doesn’t mean it won’t happen at large.

      And to be very clear, Twitter + FourSquare are mere tools, representing a trend that is more powerful.

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  9. Normally I find Om’s perceptions pretty refreshing but this one makes me feel like your an investor in Foursquare and you want to nudge the crowd. The biggest problem Foursquare has is the mad, rampant competition that is just now beginning to take steam. Let’s see Gowalla, 4sq, Going, Rally.. lots more to come and we haven’t even gotten into retail brand specific checkin game apps, I can’t wait to get the Olive Garden one where I get free breadsticks just for checking in.

    By this time next year 4sq will have a dozen or more competitors all in one big game for check-in attention mayhem- and the question is how long will the checkin game last? I think its foolish to think that this can unseat Yelp’s considerable and sizeable data set.

    Right now the checkin game is a fad at best, its purely new, very silicon and wizbang but its not state wide mass adoption, to make the speculation that it could = Yelp’s demise is pretty lame.

    Google is after the data and where the data will be next. They want as many infrastructure players out there. They can turn on a 4sq concept over night and still feed it to twitter/facebook even. They can combine their places/web experience with Yelps data set and be even more robust to the consumer. Yelp should take the deal and joy the growth.

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    1. Dan

      First of all thanks for your nice words, but as to your question about being in an investor in FourSquare .. not true and not even close to the mark.

      In case of Twitter/FSQ — they are signposts to the future which as you say might include dozens of FSQ competitors. Is FSQ the perfect service — not sure, but it is going to be a service like theirs which is eventually going to “catch fire” like Yelp itself did a few years ago. I hope you can take a minute to read my previous responses to others and hopefully that gives you better context.

      On the Google-Yelp deal, you and I are in agreement: Yelp should take the deal. It might be good for Google too in the near term. IN the long term, well, I think things are going to change. If not in 2010, then the year later or next. That is the nature of technology. I am sure we will be arguing about this (or something else) if we are both around to see the change.

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  10. I agree with all of the comments. ;-)

    To add to the mix, services like Aardvark help mitigate the size of the social graph, since self-anointed experts will be willing to help complete strangers, in near-real-time.

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