Summary:

In the online local listings and reviews segment, US big boy Yelp is giving a five-star review to Hamburg-based peer Qype – and buying it to expand the breadth of its business overseas.

Yelp
photo: Flickr / roboppy

Against the threat from Google’s own local listings, Yelp is beefing up through acquisition on its internationalisation tilt.

The local reviews service is buying European peer Qype for $50 million (€18.6 million in cash, the rest in 970,000 Yelp shares).

Why buy? Jeremy Stoppelman (via release):

“With its strong local content in key markets like Germany and the United Kingdom, we believe that Qype will help Yelp become the de facto choice for local search in those markets.

“Qype’s established European sales force will also bring more local business owners into the Yelp ecosystem, which in turn will bolster our mission to connect people Yelp CEO with great local businesses all over the world.”

Yelp on Wednesday also guided observers to expect a Q3 net loss of $2 million on revenue of $36.4 million – above analysts’ average expectation of $35.79 million.

Founded in 2006 by German entrepreneur Stephan Uhrenbacher, Hamburg, Germany-based Qype was loaded with $23.1 million in investment from Advent, Partech, Wellington and others, according to CrunchBase – a string of European VCs.

This marks another European exit to a larger US category rival. But it is not one of the largest in money terms.

The outfit’s strength has always been its international breadth, operating in Germany, the United Kingdom, France, Switzerland, Austria, Ireland, Poland, Spain, Italy and Brazil.

The startuppy name has always proved a bit awkward, leading to an amusing scene in the UK TV show The Apprentice when one contestant struggled to pronounce “Qype” but nevertheless used it as the inspiration for a pie shop.

Such services have eaten up traditional Yellow Pages directories’ classifieds business. Now Google’s integration of Google+ and its local listings challenges dedicated local reviews services, too. But Yelp has lucrative supply partnerships with Apple, for example, and Qype will now be injected in to that offering.

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