Yelp is often categorized as just another website for restaurant reviews. Most of the existing answers reflect the same line of thought (To be fair, the question was originally asked in 2012, and Yelp is definitely a bigger player in Local than what it was three years ago.) I see Yelp playing in at least the following categories, and in each category, it has different competitors:
- Local Search engine: People do not think of Yelp as a search engine, but a good number of times they are using Yelp exactly for what they would have used a search engine a few years ago: “Indian restaurants in San Jose, CA”, “cheap hotels near me” etc. This is true for other “vertical search engines” like Amazon for retail. Eric Schmidt recently identified Amazon as its biggest search competitor (See: Google’s Chairman Says Amazon — Not Bing — Is Its Biggest Search Competitor) Same logic applies to Yelp for local searches.
Key competitors in this space: Mostly Google, and to a smaller extent, Bing and Yahoo.
- Providing free digital presence to local businesses/ Local Advertising: Now these are two apparently different categories, but for online advertising players like Yelp, these are actually two steps in the same strategy: Make it easy for local businesses to own a basic presence on the Internet and then, provide enhanced presence through advertising.
Yelp with its 2.2 MM claimed businesses is a sizable player here. However, Facebook with 30MM+ SMBs online (And this number is from June 2014) is a much larger player. In fact, majority of Facebook’s 2MM active advertisers are local/SMB advertisers. Finally, while Google does not disclose its SMB advertiser count and number of claimed Google+ pages, it is safe to assume that is is the largest player in this field.
- Restaurant/hotel reviews: This is the obvious category that most people put Yelp into. Key competitors in this space: Zagat (Acquired by Google), Google+, Urbanspoon (acquired by Zomato), TripAdvisor, etc. Out of these, Google+ is the most underrated player because of its perceived failure as a social network. However, with G+ reviews integrated in Google search as well as Google maps, its content still gets a good number of eyeballs.
- Other local reviews: While it’s true that restaurants account for the largest share of Yelp reviews, as high as 59% of reviews are from other verticals. In terms of share of reviewed businesses, non-restaurant businesses represent 79% of Yelp. (Source: Yelp’s last 10K filing : SEC Filings )
Key competitors in non-restaurant reviews space: Google+ (again!), Angie’s list and HomeAdvisor (Home & Local services), healthgrades.com (Health), Groupon (Local Retail), Rent.com and apartmentrating.com (Apartments), etc.
- “Closing the loop“: This refers to Yelp’s focus on being the transaction platform in addition to being the discovery platform for local businesses. Yelp identifies this as one of its three strategic priorities (other two being Mobile and International). With the launch of Yelp platform and acquisitions of SeatMe and eat24, Yelp now plays in field of online food delivery, table-reservation, booking appointments, etc.
Key competitors in this space: OpenTable (acquired by Priceline), GrubHub, MyTime, etc. Not surprising, now Google is experimenting with this too. (News from last week: Whether you’re craving deep dish pizza or pad thai, starting today you can… ) Facebook is a relatively smaller player in this with its Partnership with OpenTable, but because of its penetration of the local market, it has the potential to go big in closing the loop.
- Social: Yelp is not your traditional social network, but it does compete in the specific case of social check-ins. However, unlike other categories above, where Yelp is a leading or at least a significant player, in this category, it is at best a challenger. Foursquare is the original category defining leader for social check-ins, but I believe now Facebook is the more popular option especially with photo check-ins and group check-ins getting very popular.
Overall, considering its strong presence across almost all the categories noted above, Google is Yelp’s biggest competitor. Facebook with its significant penetration in local advertisers can be considered the second most significant competitor.