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Bloomberg: Yelp Backs Off Its Daily Deals Product

  |  August 30, 2011   |  Comments

Local reviews platform has halved sales staff dedicated to the offering.

Yelp plans to slash the number of sales staff hawking its daily deals product, Bloomberg reported today. The move, coming just days after Facebook killed its own deals offering, will provide ammunition to those who argue the space has blown up beyond the capacity of consumers and merchants to sustain it.

According to the report, the business reviews platform will cut in half the number of staff dedicated to selling Yelp Deals, a service it began rolling out one year ago.

Bloomberg cites a Yipit estimate that 38 daily deals sites closed in July, outnumbering the 36 that opened, while the industry overall experienced a 7 percent drop in revenue from June in top North American markets.

The main reason for such cutbacks may lie in the fact that customers are increasingly inundated by emails from numerous companies offering similar products, raising inbox clutter and reducing open rates. Businesses, too, are weary of being constantly pitched on such deals.

Groupon CEO Andrew Mason addressed the Yelp cutback in a memo to employees that was obtained by several media outlets, writing, "Yelp is small and is not growing. In the 15 markets where we compete, our daily deals are 500 percent of their size."

 

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