
Yelp Posts Q4 Loss, CFO Resigns - praneshp
http://www.nasdaq.com/article/yelp-posts-q4-loss-cfo-rob-krolik-resigns-20160208-01009
======
danso
Yelp in 2014 Q4 had revenue $110M and a profit of $32.7M [1].

Its revenue for Q4 2015 is $154M and a loss of $22.2M [2].

I see that there is an income tax expense of $20.3M in 2015 and other
depreciation costs...but is this change in profit with growth in revenue
typical?

[1] [http://www.yelp-ir.com/phoenix.zhtml?c=250809&p=irol-
newsArt...](http://www.yelp-ir.com/phoenix.zhtml?c=250809&p=irol-
newsArticle&ID=2014264)

[2] [http://www.yelp-ir.com/phoenix.zhtml?c=250809&p=irol-
newsArt...](http://www.yelp-ir.com/phoenix.zhtml?c=250809&p=irol-
newsArticle&ID=2136455)

~~~
timr
This is really the only interesting question regarding the CFO's resignation.
The CFO isn't responsible for revenue growth, but _would_ be on the hook for
something like a bunch of previous quarters' botched taxes.

That said, it could just be that Krolik resigned to do something else. It's
not like he was fired and kicked out of the office -- he's given notice, and
they're looking for a replacement.

~~~
xxs
No profit = no bonuses likely, leave the ship

------
mark_l_watson
The top three stories on hacker news right now are about top management
resignations in three high profile tech companies. Earlier, LinkedIn lost 40%
of their value in a day. Deutch Bank lost 11% of their value today.

sorry to be off topic here, but these seem like crazy times.

~~~
InclinedPlane
Of course there's a bubble, and of course it has to burst at some point. There
are frankly a plethora of poorly conceived and poorly executed startups on the
scene right now, with no hope of ever achieving financial sanity. Just as we
saw in the late '90s with any crazy idea being given a ton of VC funding,
regardless of whether they had a sane business plan, only to implode when
things got tight.

Unfortunately, this time around the successes of the previous rounds actually
made things worse, because they succeeded too much. VC funding is now,
intentionally, a casino. The RoI you can get from growing a winner fast enough
to dominate some new market so outclasses what you can earn back from helping
a sensible startup grow at a reasonable level that most VCs concentrate their
funding to match. It's all about disrupting and breakthroughs and growing
fast. This ends up bringing a lot of "unicorns" into existence even if only a
few of them are ultimately viable. It also leaves a lot of smaller, more
sensible startup ideas in the dust. Silicon Valley is all about stuff that's
"cool", not stuff that's challenging or valuable. Sadly, even this round of
the bubble bursting is unlikely to change that.

~~~
eoinmurray92
How to investors make money on unicorns if there is no liquidity event?

~~~
InclinedPlane
It's a lottery, you only need one. One facebook, one google, etc. Those
successes bring in RoI not just of double digit percentages (the sort you'd
expect from high-risk investments) but in multiples, orders of magnitude even.
10x, 100x returns sometimes. And when you hit those jackpots all of your other
investments are now meaningless. The result is that VC becomes a game of
searching for jackpots. Everyone wants a little bit of everything, and
everyone wants to have their fingers in the things that look most interesting,
that seem to have the chance to blow up. VCs also push the companies they
invest in to grow fast and hit the point of finding out whether or not they're
a "jackpot" idea or not.

At the same time, investors have figured out innumerable ways to get paid out
of companies that are obviously not going to make it and won't ever hit a
traditional liquidity event. They've gamed the system to an enormous degree
but they also pump so much money into it that it's hard to stand up to them.

~~~
gopiks
Good summary. This is the reason tech is in bubble while economy is heading
towards recession.. This and stupid fed policy

------
aaxe
A great read before people get on the "Yelp removes bad reviews if you pay"
bandwagon: [http://screenwerk.com/2016/02/02/reviews-rashomon-plumber-
re...](http://screenwerk.com/2016/02/02/reviews-rashomon-plumber-remembers-
yelp-threat-that-never-actually-occurred/)

~~~
josephjrobison
I'm 90% sure that the people calling about removing bad review are shady
marketing services companies that are offering this.

The same thing happens with Google. Someone says "hi I'm your local Google
specialist..." They're not exactly claiming to be from Google, but it's
confusing to an offline small business owner that thinks Google is calling
them.

I've heard many of these messages for Google. I don't recall any from Yelp,
but if you have any friends or family that claim that Yelp is doing so - ask
to listen to the recording. I wouldn't be surprised if it's some other company
claiming they can help.

I too have heard from a few businesses telling me directly that they don't
trust Yelp and they know someone who got threatened. But like the parent
comment said, it's hard to find a direct link.

At the end of the day it's shady businesses claiming to be a Yelp or Google
specialist that are muddying the waters from what I can tell.

~~~
cft
Then yelp should sue these yelp specialist for trademark infringement.

~~~
josephjrobison
They definitely should - wouldn't be surprised if they are already.

------
kevindeasis
Wow, there are soo many resignations happening this week! I am stunned. Anyone
have articles on how this happened and what it means?

~~~
awqrre
Do they all know that a crash is coming?

~~~
noobermin
It's almost as if everyone wants to see a crash.

It's funny how crashes are almost psychological play at times. I hate "yo" as
much as the next guy, but the pain of seeing a significant depreciation in
wages for anyone far out weighs the joy I'd see from having my "gut feelings"
about a bubble being proved right.

~~~
freyr
I'll say it: I want a correction. I don't believe that the VC-funded app
economy is delivering. I dislike that SF and SV have a de facto monopoly on
the US tech sector, and to participate here I have to spend my entire paycheck
to rent the shittiest apartment I've ever lived in. I would like for housing
prices to go down, or I'd like a nudge to walk away from this place.

~~~
pc86
You know, you _are_ free to move to any of a list of cities with booming (or
at least sufficiently breathing) tech industries and more realistic costs of
living, in no particular order:

    
    
      - Austin
      - San Diego
      - Washington, DC
      - New York
      - Portland
      - Pretty much any state capital will have agencies with plenty of contract development work

~~~
CuriouslyC
New York, Washington DC and San Diego are all still expensive.

Raleigh/Durham and Seattle are better options.

~~~
pc86
My point stands. Any city is better than SF in terms of cost of living,
including the three you mentioned (I never said they weren't expensive, just
less expensive).

------
perseusprime11
Yelp is kind of stuck like Twitter. Product is not shaping up well. I am not
sure how they plan to grow without improving their product. Their mobile app
still kinda sucks

~~~
badusername
Their mobile app is one of the most poorly designed and poorly executed major
tech products out there. For a company that hires probably a thousand
engineers, there has been very little improvements on the web and mobile
properties in over 4 years. For a product that's innately social, local and
realtime, it has missed most of the enabled affordances of years past.

I'm surprised that there isn't much competition. I was traveling recently, and
found Zomato's app to be much superior.

~~~
spike021
I really can't believe how bad it is (on iOS at least).

Two rather signifiant UX issues on my end are:

1\. bad image resolution (do they resize pictures to be smaller?); this is
also worse from yelp.com 2\. Why is the regular swipe from edge of screen to
go to the previous screen overridden to move from review to review? (same
issue with GMail app though too)

~~~
tomjakubowski
> Why is the regular swipe from edge of screen to go to the previous screen
> overridden to move from review to review? (same issue with GMail app though
> too)

I completely share your frustration here. I actually met a Yelp iOS engineer
once and asked them about this. They said the idea is that it's supposed to
feel like the way you navigate photos in albums on iOS; their expectation
(whoever designs Yelp's iOS UX) is that users want to read many reviews and
don't skim the review previews first to find the ones they like.

I showed them how I prefer to browse reviews: skim the previews, find a
promising looking one [Yelp review signal/noise is _terrible_ ], "drill into"
it, back out, continue until I've read enough reviews to make a judgment. They
said they understood my POV, but stood by the assertion that most users don't
use the app this way. Maybe they have metrics to justify that.

~~~
daveguy
Or maybe most users don't use the app that way because of their interface? It
makes using the app in a preferred (or preferable) way too cumbersome?

------
neptunespear
Why is Yelp untouchable by the FTC or DoJ? The company gets up to some really
shady stuff but hasn't faced much punishment if any.

~~~
pgrote
What is the shady stuff?

~~~
tim333
[http://www.eastbayexpress.com/oakland/yelp-and-the-
business-...](http://www.eastbayexpress.com/oakland/yelp-and-the-business-of-
extortion-20/Content?oid=1176635)

""" The phone calls came almost daily. It started to get creepy.

"Hi, this is Mike from Yelp," the voice would say. "You've had three hundred
visitors to your site this month. You've had a really good response. But you
have a few bad ones at the top. I could do something about those."

"""

~~~
aaxe
I call bullshit: [http://screenwerk.com/2016/02/02/reviews-rashomon-plumber-
re...](http://screenwerk.com/2016/02/02/reviews-rashomon-plumber-remembers-
yelp-threat-that-never-actually-occurred/)

~~~
tim333
It's unclear who's fibbing. My guess in the story I posted is that the sales
guy said that stuff but was not actually in a position to pull the bad
reviews. Here's a Yelp sales rep talking about the job
[https://www.quora.com/Whats-it-like-to-work-at-Yelp-as-an-
ac...](https://www.quora.com/Whats-it-like-to-work-at-Yelp-as-an-account-
executive)

------
kloncks
Serious question.

Yelp's revenue model is a bad conflict of interest. They rank the destinations
AND the destinations have to buy advertising too.

What revenue model could they do that would work and not be shady? I can't
think of one. Charge users?

~~~
ziszis
It's not that strange. Google does the same more or less.

Search for "insurance" on Google. Google ranks a bunch of insurance companies:
Geico, Statefarm, etc. They also show ratings for some specific agents. Google
also sells ads if you want to drive more traffic and not just be in the
organic listings.

You can find nuanced differences between Yelp and Google, but the problem is
not conflict of interest. The problem is that businesses are not seeing enough
value in the ad product that Yelp offers. Many advertisers dislike Google, yet
they still advertise.

------
ececconi
I've replaced Yelp with Foursquare a while ago for finding things around me
and trusting reviews. I've found that the character limit and smaller user
base of Foursquare makes reading reviews a much more pleasant experience. I
also like how there is no star system on Foursquare.

------
ryanSrich
Honest question. How do you know you're in the middle of a bubble bursting?

~~~
chadzawistowski
When it's become so obvious that everyone is asking the question.

------
bpg_92
These seems worring indeed, are some bubble poping now? Maybe it's just
overreacting, but hopefully the trend won't continue.

~~~
dang
It's likely just random, with the human bias to read patterns into randomness
hot on its trail as always.

------
jorgecurio
What do you predict will happen to Yelp this year?

~~~
nugget
Someone will acquire them. The brand and employees are worth a billion
dollars, in my opinion. Local is a very difficult market to crack.

~~~
nostrademons
Data as well. I can think of at least three companies worth $100B+ (and
several worth $1B+) that would _love_ to have comprehensive reviews of nearly
every local business in the U.S.

~~~
SOLAR_FIELDS
I work for a large company that has Yelp flavored data as part of their
services and can confirm that they do pay Yelp money for their data. It's
worth quite a lot.

------
ratfacemcgee
Yelp, Zenefits and Paypal. What is going on?

~~~
smt88
Yelp: Very hard to monetize. Because they chose a model where the businesses
who pay them are also the businesses being reviewed, they've given themselves
a conflict of interest. They've chosen to sell their integrity, which makes
their star ratings less reliable/valuable, which makes users trust them less,
which makes businesses want to advertise less. It's a vicious cycle.

Zenefits: Broke the law. Also an insanely ambitious, brilliant, risky business
model.

PayPal: Hated by most people/customers. Can't wait until they go out of
business completely.

~~~
smegel
> Because they chose a model where the businesses who pay them are also the
> businesses being reviewed

Crazy when you think about it.

> PayPal: Hated by most people/customers.

I didn't understand this until recently when I tried to "instant" transfer a
few hundred bucks to a friend and was caught up in a 3 day "review" process
where I was interrogated about the "reason" for the transfer. Never again!

~~~
Gibbon1
>> Because they chose a model where the businesses who pay them are also the
businesses being reviewed

> Crazy when you think about it.

Who do those guys think they are, Moody's!!!?

~~~
finance-geek
@Gibbon1 this is a pretty insightful comment. Luckily for Moody's, they made
themselves part of an intricate industrial structure where their ratings drive
large parts of the industry (e.g., investment guidelines, lending, etc.)

------
feld
He was probably told he has to give the CEO a 5 star rating or he would be
fired.

edit: i have no idea if they have an internal person-rating system based on
yelp, but i hope so

As far as the recent resignations, it's probably New Years resolutions when
people realize they value time over money.

------
jack9
It aint his fault, so he must have another opportunity.

------
bcook
Downvoters should be required to cite their reasoning. This would presumaby
hinder illogical, kneejerk, emotional downvotes.

We are here to learn & understand (perhaps painfully), not anonymously
persecute.

Edit: I did not consciously realize the parent was "logicallee". ;)

~~~
pvg
Downvoting is hardly persecution. It just means someone doesn't like your
comment. They don't owe you an explanation and the site's author has
explicitly stated one is not required. Think of what would happen if every
downvote of a low-quality comment had to come with a polite note justifying
the action. Noise explosion.

~~~
danenania
On the other hand, downvoting isn't really supposed to reflect dislike or
disagreement, but rather a comment that is rude, lacks substance or, is
otherwise against the guidelines. Unfortunately this rule seems to be pretty
universally ignored on HN these days.

I'll generally re-upvote any reasonable post that I see has been downvoted
simply due to expressing a contentious opinion, even if I also happen to
disagree.

~~~
pvg
It's very much also supposed to reflect those.

[https://news.ycombinator.com/item?id=117171](https://news.ycombinator.com/item?id=117171)

------
dschiptsov
The second dotcom bubble is finally abouy to burst?

Github, Twitter, LinkedIn, PayPal issue and bunch of small ones.

------
justinzollars
THERE MUST BE MORE TO THIS STORY. -recent paranoid end is nigh HN user.

~~~
TeMPOraL
Well, come on. A few days ago 3 news stories about companies losing stock
value. Now, 3 stories in a row about company executives resigning. What's
going on in the Valley? :O.

~~~
nostrademons
When a story gets hot on HN it tends to lead to other stories like it being
upvoted. You should've seen it when the whole front page was about Erlang.

[https://en.wikipedia.org/wiki/Apophenia](https://en.wikipedia.org/wiki/Apophenia)

~~~
moioci
In case anyone's wondering, there was a reason for the Erlangomania:
[https://news.ycombinator.com/item?id=512145](https://news.ycombinator.com/item?id=512145)

