There has been a massive dip in the shares of Yelp, which has been preceded by the revelation of the earning of the company in the third quarter and a number of advertising company abandoning the site and the non-addition of any new company are being slotted as the two top reasons.
The decrement can be judged by the fact that the shares fell down to 29 dollars, which is the lowest that it has been for almost a period of a year. Though it closed at $31, it was still quite a downfall. One major change that occurred in the policy of Yelp that was a major reason for this situation was the fact that they decided to shift from the long-term contracting system to a non-term contract that made dealings more flexible.
Though this change would affect the advertising status of the company, as expected, as many companies were bound to back up, it looks like Yelp did not have a backup plan in place. They lost more than they could add to their company, which was a major reason for the loss of revenues.
A number of other factors have also been responsible, according to the Chief Financial Officer of the company, Charles Baker. He believes that though the change in the advertising propaganda was crucial, a technical error that did not allow smooth flow of leads to the people responsible and poor performance by the recruitment group to contact the new business ventures who could be potential advertisers compounded the problems. Moreover, Google changed its algorithm to search and a large number of sales representatives quitting the company only compounded the problems.
Experts believe that if Yelp had to compete with other giants in the digital platform, they have to make huge reforms in their strategy and the service they provided. The company has already lowered its expected revenue generation and has to do something substantial in order to keep matters from worsening.