Google + Yelp: The Annotated World Is Coming

When Google says it wants to organize all the world’s information, people often assume the “world” really refers mostly to the Web, and maybe books. But if the search giant can be criticized at times for wild ambition, it means what it says about the “world” part.

With the possible acquisition of local business review site Yelp, being reported by TechCrunch and the New York Times today, Google would take another of many recent steps toward making real-world locations essentially searchable. The notion of an annotated world, one in which location technologies, the Web, mobile devices, and ubiquitous sensors create and reveal information about real places, is one I heard years ago from Esther Dyson. Jeff Jarvis brings up the potential that Google could make such an augmented reality, as it’s now called, an actual reality on a wider scale:

Thus Google becomes a doorway to the annotated world. Everyplace has information swirling around it; Google organizes it and motivates and enables us to create more information for it to organize.

And, not least, Google could offer local ads against all that information, which often isn’t on the Web because local businesses often don’t have a Web site. In other words, Yellow Pages 2.0 (but with blue, red, and green too).

Now, whether Google will indeed be the central organizing force here is far from certain. As Om Malik and others point out, Google + Yelp could get shoved aside by Twitter + Foursquare (the location-based social network). If such a mashup works, the immediate feedback on local businesses could be powerful for people and for advertisers.

That won’t happen right away, if ever. But if there’s even a small possibility of such hybrids or alternatives emerging, I have to wonder whether the reported $500 million price tag for Yelp might be a bit much even for Google. Not to mention, Google should be leery of allegations of pay-to-play reviews and intimidation on Yelp, even if Yelp has denied them, because a backlash against Google’s power is already well underway.

But if Google has struggled at anything, it’s at building viable communities, and Yelp is certainly one. With $22 billion in cash and a demonstrated willingness to spend a lot to buy community-oriented sites (like YouTube for $1.65 billion), Google will surprise no one if it closes the deal anyway.

UPDATE: Now it appears the deal is off, according to TechCrunch. It’s not clear what happened. Did Yelp decide it could do better than a $550 million reported deal, or go public instead? Or did Google decide that price was too high, coupled with the uncertainties? Google at times has shown surprising restraint in assessing acquisitions, seeming to pass when the price goes too high. But I wonder if another factor is that it has been wary (YouTube aside) of moving too far into hosting its own content, which is what it would be doing with Yelp. Whether that proves to be admirable or short-sighted isn’t yet clear.

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