Yahoo’s search engine leans on Yelp for help

SAN FRANCISCO — Yahoo is cribbing from Yelp’s online reviews of local merchants to soup up its search engine.

Ratings and excerpts from Yelp’s merchant reviews began to appear in Yahoo’s search results on Wednesday.

Financial terms of the partnership weren’t disclosed. News of the deal first leaked out last month, so it didn’t come as a surprise. Yahoo’s stock dipped seven cents to $37.49 in afternoon trading while Yelp’s shares gained $2.48, or nearly 3 per cent, to $92.48.

Yahoo Inc. is hoping the snippets from Yelp Inc.’s popular service will spur more people to rely on its search engine when they’re looking for information about a specific city. Yelp could generate more revenue and polish its brand by having its content featured in Yahoo’s search results.

Boosting search traffic is a high priority for Yahoo CEO Marissa Mayer because the queries spawn insights into users’ interests. That knowledge can then be used to sell advertising.

Yahoo ranks a distant third in Internet search behind Google Inc. and Microsoft Corp.’s Bing.

Neither of those search engines will be able to highlight Yelp’s material in the same way that Yahoo now can.

Google had been showing Yelp snippets it in its search engine a few years ago, prompting Yelp to complain that it was being cheated out of revenue and traffic. After US antitrust regulators opened an investigation in 2011 into whether Google was trying to stifle competition, the company stopped using Yelp’s reviews in its local search results.

Yahoo’s search market share has been steadily slipping since the Sunnyvale, California, company began relying on Microsoft’s technology to produce most of its results in 2010. That alliance still gives Yahoo the flexibility to add other features to its search results.

Microsoft also helps sells some of the advertising displayed alongside Yahoo’s search results. Ad revenue initially slumped after Microsoft and Yahoo joined forces, but the numbers have been looking better during the past two years. After subtracting ad commissions, Yahoo’s search revenue last year rose 6 per cent to $1.7 billion.

Yelp’s revenue last year totalled $233 million, a 69 per cent increase from the previous year.