An immaculate re-conception? Yelp re-thinks its CX with a $270m acquisition and a 'they need us' Search tie-up with OpenAI

We do have a lot of bets that we're placing this year that can improve things on the services side.

It’s been a year since we last took a proper look at Yelp’s AI ambitions. On that occasion the review site had just published its latest Trust and Safety Report, detailing its efforts to protect the integrity of information on its platform. As we noted at the time:

If you’re a company whose operating model is built on customer reviews of businesses and services, trust is critical. If visitors to your site can’t rely on the content they find there to be honest and transparent and, in these days of rampant AI automation, human-generated, then what value is there to be had for them?

Flash forward 12 months and AI enhancements are inevitably still top strategic priority for the firm, according to co-founder and CEO Jeremy Stoppelman, and that involves what he pitches as “re-conceiving the Yelp experience”:

Obviously, AI is a very disruptive force, and I think it's changing consumer expectations. How are we approaching that? Well, first and foremost, on the consumer experience, we're really trying to leverage AI everywhere that we can.

Down the hatch

The firm last month announced the $270 million acquisition of New York HQ-ed AI lead management provider, Hatch. The firm was set up in 2018 with the mission to address “challenging lead management and communication pain points for services businesses”, in the words of its co-founder Chris Bache.

Yelp already had a Lead Management offering in the shape of Yelp Receptionist, which was only launched last year, but the focus will now shift to Hatch’s tech, confirms Stoppelman:

We did get the opportunity to pair up with Hatch. We're delighted. I think that accelerates our road map there by a couple of years. They were a first mover in the space. And we're able to bring our extensive distribution as well as AI capabilities and talent to bear on the Hatch opportunity.

It's early days in the space that Hatch plays in, he admits, but adds:

They’re laser-focused, they understand their customers, they understand the players in the ecosystem, [and] they have key partnerships that are essential to make that work. There's just a level of detail and focus that I think is very hard for other companies, especially large ones that have other big opportunities to pursue, to spend their time on...[Hatch is] really experts in the space. I think that's very hard for someone to replicate if they've got lots of other large opportunities to chase like some of these bigger AI players.

OpenAI, of course

On the subject of AI players, the other recent tech announcement of note that Yelp has made was the inevitable signing of an agreement with OpenAI. This is something that Stoppelman reckons OpenAI ought to be pleased with it as a lever to increase its strength around Search:

Yelp has really great content, millions of human written reviews, really critical content, critical information. If you want to deliver an experience, a general search experience, eventually those consumers are going to be asking questions with local intent. That's historically [where] Google has reported that something like 50% of queries on traditional search have local intent. If you're trying to compete with Google, like many of these folks are, you really need that high-quality content and Yelp has it.

And there’s more like this to come, he hints:

The conversations are continuing. This isn't the last [deal] we expect to do.

Re-conception

As for that ‘Yelp re-conception’, this isn’t something he’s just come up with, he explains:

We set the stage for this in 2025 by introducing natural language search, launching AI-powered business highlights, and expanding Yelp Assistant to RR&O (Restaurants, Retail and Other) business pages. We plan to further expand Yelp Assistant in 2026 to function across categories and entry points with the goal of making local discovery and task completion seamless.

We began testing this comprehensive experience in the fourth quarter and expect to fully roll it out by the end of the first quarter. To further close the loop between discovery and action, we expanded our food ordering network by adding hundreds of thousands of new restaurants through our DoorDash partnership and integrated RepairPal's booking system into Yelp.

He adds:

We think consumers are going to expect to have a more chat-like interface in general to a service like Yelp, so we're eager to bring that to our consumers [and] drive engagement. And of course, as those users engage with it in high-frequency categories like restaurants, you would expect them to eventually get to services categories as well. And when you're in Yelp Assistant, that's a fully monetized experience with Request-a-Quote.

We plan to continue to invest to bring other actions into Yelp Assistant, so things like making reservations or booking appointments or having a service provider show up at your house. Those are all on the road map. So we're looking forward to executing on that. And then we continue to lean into multi-location services. That's a big opportunity there where we've historically been under-penetrated.

Very early days, but Yelp Assistant is showing signs of traction to date, he says:

As we rolled it out, we've seen really great adoption there, up 400% in terms of projects going through Yelp Assistant. Fast forward a little bit there, and we brought it to business pages.Consumers more frequently are having this expectation of you land on a business page, you don't want to read through all the information. You just want to get the needle in the haystack. Consumers are now able to do that - type in a question about a business, it digs into the photos, it digs into the reviews, and it comes back with relevant information.

That was sort of a milestone on our way to where we're headed, which is the cross-category Yelp Assistant. That's really exciting because you can ask it any question about a local business or what your need is or whether it's a service request, it will guide you through that process and ultimately match you with businesses. One of the great things back to that needle in a haystack comment is that we're able to back up a user's question or a user's request with great data. So photos that are an example of what they're looking for or snippets right out of reviews and get really precise. We think that's going to delight consumers.

And ultimately that’s the goal everyone - including OpenAI - is chasing, he suggests:

With the changing Search landscape, everything going or some portion of share going to a more generative AI or a ChatGPT-like experience, consumers are changing their expectations and they don't just want regular search. So we've put a significant investment in transforming the Yelp experience and preparing for the future, and we'll get our first taste of it as we launch Yelp Assistant at the end of Q1.

My take

We are confident in our ability to transform Yelp with AI in ways that play to the strengths of our business. 

Time will tell - we’ll continue to review progress.