Shares of online-reviews site Yelp jumped more than 60 percent than the price of its stock debut on Friday.
Yelp sold shares (NYSE: YELP) at $15 apiece and saw them rise to close at $24.58.
The company is well known as a destination for consumer reviews of restaurants and a variety of other businesses and services as varied as plumbers and churches.
"We see a huge opportunity to become the strongest brand in local, much like you see with Amazon," chief executive and co-founder Jeremy Stoppelman told Bloomberg Television in an interview. "We see Yelp occupying that space with content. Whatever business you need to go to, we're going to have the best content for that. You're going to go to us day in and day out."
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However, Yelp has never managed to turn a profit, and it could face serious competition from Facebook and Google as it seeks to survive based on advertising. Also, other sites are encroaching on its main focus, with Google buying Zagat last year to add consumer reviews, and Foursquare offering visitors' thoughts in its location-based check-in service.
Morningstar analyst Rick Summer, who pegged Yelp's value at $9 a share in a pre-IPO report, said in a Friday-morning telephone interview that he was "shocked" at the stock's rise, saying, "We have entered into a little bit of Crazytown, U.S.A."
"(Yelp is) filling a need for consumers, but on the business side, it's not clear that it's filling a need. ... There's other ways for businesses to put their best foot forward with Groupon, LivingSocial, Foursquare, Google, Facebook and more. It's not clear that Yelp has a hold on that slice of the market," Summer said.
Yelp's built-in advantage is the wealth of reviews on its site and name recognition as a source for crowd-sourced thoughts on businesses. The company said in its IPO filing with the SEC that it had 25 million reviews at the end of 2011, the Web site attracted 66 million unique visitors every month, and 5.7 million users interacted with the company's popular mobile app.
The company reported 2011 revenue of $83.3 million, up 73 percent from the year before. If Yelp's platform can gain popularity in more areas, revenues could continue to expand.
"While it is still reasonably small from a revenue standpoint, the company is still in the relatively early stages of monetization — a large percentage of its revenue comes from its 20 oldest markets, so it should be able to continue to grow strongly as it drives monetization in its other 51 markets," research analyst Nick Einhorn, of IPO investment advisory firm Renaissance Capital, told the Associated Press.