Week 4 Popular Press: Yelp Partnerships
This week articles centered around corporate alliances and networks, as well as mutuality and trust among partnerships.
Considering that we are in the era of
social networks, I wanted to illustrate how Yelp, one of my favorite social networks, has grown its reach through
recent lucrative strategic partnering.
As far as
search engines go, Google has been king, dominating the market share with 66%
as of January 2012 (Norris, 2012). Since
Google Chrome took over Internet Explorer, it has taken the lead with nearly
33% of the market share, and Google’s Android mobile OS leads all other smart
phones (Norris, 2012). However, with
the recent partnership of Apple, Yelp could very possibly be on the road to taking the throne, as far as local search and SEO were concerned. The possibility of their growth is relying heavily on how
successful the Apple Maps app turns out to be (Norris, 2012).
Yelp's partnership with Apple did not start with the new maps application. When the iPhone 4S launched last year, one of its most hyped
features was the featured voice-recognizing personal assistant, Siri, which
Yelp had been providing most of the content for. Yelp’s branding for this service was kept
quiet for the most part because the collaborating company’s had bigger plans,
“namely, teaming up to bring Yelp’s check-ins and local business listings to
the new and highly anticipated Apple Maps, an application to be included in the
upcoming iOS6 that will be replacing Google as the default location tool for
iPhones” (Norris, 2012). This feature would give Yelp a serious advantage to other geolocation apps such as Foursquare or Facebook's check in feature (Norris, 2012).
Yelps partnerships can serve as a wake up call for
Google. In June of 2012, Yelp announced
it is powering Microsoft Bing local search engine results. If users search on Bing, relevant Yelp reviews
will display on the right side of the screen (McCue, 2012). The partnership is
said to be a positive move for Yelp and for small business owners who have
figured out how to use the service wisely (McCue, 2012).
Why is Yelp an attractive alliance?
·
Yelp had an average of about 71 million monthly
unique visitors in Q1 2012 (McCue, 2012).
·
6.3 Million unique visitors used a Yelp mobile
app (McCue, 2012).
·
Every second a consumer looks up or calls a business
from a Yelp mobile app (Q42011) (McCue, 2012).
·
A photo was uploaded every 30 second from a Yelp
mobile app (McCue, 2012).
·
Yelpers have written over 27 million local
reviews (McCue, 2012).
·
Over 40% of all Yelp searches come from their
mobile apps (Q42011) (McCue, 2012).
·
Yelp is a dominant replacement to the colored
page directories and has antiquated the need for yellow pages (McCue,
2012).
·
Yelp is a source that customers have grown to
trust daily (McCue, 2012).
Yelp’s partnership with iOS6 hopes to see the same success
Twitter had through its partnership with Apple’s iOS5. In the first week of the launch of iOS5 in 2011, twitter
sign ups soared with three times as many people opting into the social
media network (Ludwig, 2011). The
twitter integration allowed users to tweet from the iPhone app and the tweet
would appear at the top of the screen in live time. The increase in use, sign ins and tweets
projected its revenue to hit $1 billion by 2016 (Ludwig, 2011).
Similarly, the Yelp integration on iOS6 enables users to
check in to different locations and businesses directly using Yelp service on the
maps application without the need for the Yelp app that is normally required to check-in (Trefis Team, 2012). Yelp could see a significant increase in
engagement and check-in activity since the massive iOS base is a higher average
Internet and app user (Trefis Team, 2012). Apple has sold 400 million iOS devices to date (Van Grove, 2012). Mike Ghaffary the director of business development for Yelp announced that Yelp's integration with Apple maps in now available on iOS6 on all iPads and iPhones and in 17 of the countries where Yelp has a presence (VanGrove, 2012). Considering the millions of iPhones sold to date, this could become a
major traffic driver for Yelp visitor engagement levels. Since Yelp’s entire
business relies on member activity, this could be a very promising deal. More users mean more reviews and more local businesses
advertising with Yelp to attract customers. This ultimately means more revenue
for Yelp (Trefis, 2012).
Apple and Google are competitors because of Google's partnership with Android. David Pogue of the New York Times explains that Apple wanted to leave Google for two main reasons. The first is that Google was saving its best features for phones that were using its Android software. Some of Google's technology that was never made available to iPhone was spoken directions, which Android had way before Siri, and vector maps (smooth lines, not tiles of pixles). Long after those features had been made available to other competitor mobile phones, they still were not offered for iPhone (Pogue, 2012).
The second reason was perhaps an even larger driving force behind Apple's decision to split. Although Google was withholding all of its advanced technology from Apple so Android could have it, they were profiting from Apple's substantial customer base by collecting data such as how the maps were being used, where were customers going, and what roads were missing (Pogue, 2012). The information is extremely valuable because it not only helped Google improve its service, but it also gave them the ability to deliver location based offers and advertising (Pogue, 2012). In other words, Google was gaining a lot more than Apple, and it was in Apples interest to find an alternative.
Why did Apple break-up with Google?
The second reason was perhaps an even larger driving force behind Apple's decision to split. Although Google was withholding all of its advanced technology from Apple so Android could have it, they were profiting from Apple's substantial customer base by collecting data such as how the maps were being used, where were customers going, and what roads were missing (Pogue, 2012). The information is extremely valuable because it not only helped Google improve its service, but it also gave them the ability to deliver location based offers and advertising (Pogue, 2012). In other words, Google was gaining a lot more than Apple, and it was in Apples interest to find an alternative.
Kanter's 8 I's
In the reading, Kanter (1994) identifies eight characteristics that successful collaborating companies display. In my opinion, the Apple and Google alliance met only half of the criteria. Both companies had Individual excellence- they were both strong and had something of value to contribute; Importance- both companies offered strategic advances to each other; Interdependence- there was a certain amount of interdependence in that Apple needed a reliable server for their maps app and Google wanted access to their huge client base; Institutionalization- the two companies had clear objectives. In my opinion, where they failed to meet the other four criteria that she lists: Investment- there was no mutuality between them. Google making significant gains from the access it had to Apple's customers, however, they were keeping their best features away from Apples customers; Integration- they were competitors and operated as such; Institutionalization- although there was a clear process of how they did business, Apple was able to break away from Google by partnering with their competitors; Integrity- Google was greedy. They had a lucrative relationship with Apple, but by withholding their technology from Apple in order to support its Android product, they treated Apple like a competitor not a partner.References
Kanter, R. M., (1994). Collaborative Advantage: The Art of alliances. Harvard Business
Review, 94405, 96-108.
Ludwig, S., (2011, October 18). iOS5 Social integration spurs three times as many Twitter Signups.
[Web log post]. Retrieved from http://venturebeat.com
McCue, T. (2012, June 15). Yelp Joins in Search Engine and Apple Maps- Ignore at
Review, 94405, 96-108.
Ludwig, S., (2011, October 18). iOS5 Social integration spurs three times as many Twitter Signups.
[Web log post]. Retrieved from http://venturebeat.com
McCue, T. (2012, June 15). Yelp Joins in Search Engine and Apple Maps- Ignore at
Your Own
Risk. Forbes Magazine. Retrieved
from http://www.forbes.com
Norris, A. (2012, June 27).
Does Yelp’s New Partnership Spell Trouble for
Google’s Dominance? [Web log
post]. Retrieved from http://www.marketingzen.com
Pogue, D. (2012, September 26). A Map App, as Sleek as iPhone 5, Is Often
Off. The
New
York Times. Retrieved from http://www.nytimes.com
Trefis Team (2012, July 2).
Apple Integrates Yelp in Maps for iOS 6.
Retrieved from
http://www.trefis.com/stock/yelp/articles/129815/apple-integrates-yelp-in-maps-for-ios-6/2012-07-02
That is truly fascinating that Siri was actually prompted by a collaboration with Yelp! Honestly, this is an aspect of the software I never considered, but now it makes sense. It also makes sense why Apple Maps is so terrible! Without making this a techie discussion, I need to mention I feel the application is a terrible replacement for Google maps. After reading your article, it will be interesting to see if the partnership sustains. Consumers are generally unhappy with the new Apple maps because the yelp recommendations are distracting, and that the interface feels more like advertisements than a non-biased map source. After our readings about all the efforts that go into a merger, and reading your research about the success of Twitter, it makes sense why Yelp would want to partner with Apple. What I still can't see if Apple's gain from the partnership. Was it out of haste to release a map application after Apple cut ties with Google? I suppose time will tell how their partnership will evolve - great article and something us Apple geeks will have to follow up on!
ReplyDelete*just a note, as adorable as it would be to have Suri on my phone (Tom Cruise & Katie Holmes daughter), it's called Siri :)
Ashley,
ReplyDeleteSuri-haha!!! That is totally a typo that I will be editing now. Thanks for the heads up. :-)
You are not the only unhappy customer. The new app is getting terrible reviews, but I didn't mention that here because that is a whole other article topic. I actually used it yesterday for the Hollywood Bowl, and it gave me direction to The Rice Bowl. True story. Google maps would not have done that, just saying. The articles I used mostly said Yelp's success is riding on this app that unfortunately is not being well received as of now. As with all new software, there are kinks that present themselves and are worked out as they arise. I'm hoping it will improve ASAP. In the mean time, many articles suggest that unhappy iPhone maps users should get the Google maps app until iPhone and Yelp get it together. If the opportunity presents itself, I'd like to write a follow up to this partnership to describe its success and failures.
To answer your question, Apple saw Yelp as an attractive alliance because of the points I make in my post. They dropped Google, they said, because it was saving all the best features for phones that run its Android software. For example, the iPhone app never got spoken directions or vector maps (smooth lines, not tiles of pixels), long after those features had come to rival phones. You raise an excellent question. I'm going to edit and add this to my post. Thank you so much for your feed back.
* FYI the Rice Bowl is a Chinese Restaurant in Silverlake. giggle
ReplyDeleteNice additional Andrea!! You definitely dug deeper and highlighted the needs of google. Although yelp is not the most impressive, indeed you highlight the desperation of Apple to find a substantial partner to build with them. It will be very interesting to see how it all turns out. I'm confident that Apple has the capacity to really develop an impressive mapping deck, they just have to working on it non-stop to not lose out to external competition!!
ReplyDeleteAnd I hope you didn't end up going to Silverlake that day!! Too funny.