Reports Suggest Facebook Inc (NASDAQ:FB) Might Acquire Yelp Inc

Facebook Inc (NASDAQ:FB) is reported to be in talks to acquire Yelp Inc (NYSE:YELP), as the latest addition to its increasing set of social widgets. However, the news is yet to be confirmed by company officials. Additionally, Facebook has also been talent hunting and has acquired the services of one executive from its rival Twitter. The new member to the Facebook team, Rachel Horwitz, will be appointed as the CFO of the company.

Yelp had recently announced that it would be selling itself and a number of companies are thought to be lining up to make the purchase. Analysts at Deutsche Bank have already stated that there is a probability that Yelp would be sold out at $59-$85 a share. The analysts also added that if the deal fails to emerge and Yelp decides not to sell, the stock could crash tremendously. Yelp has a massive user base and is in touch with local businesses. This would mean that there would be stiff competition amongst the companies going for the acquisition.

With Facebook targeting online ad placements as its main form of business, it is no surprise that the company would want to add a review application, which would improve their marketing strategy. The move would send local businesses rushing to Facebook in a hope to increase their customer inflow. The appointment of Horwitz could be seen as a move in this direction, since she was last managing public relations for Twitter. The appointment is, however, the latest addition to the company’s long list of high profile executives.

Additionally, Facebook also announced that it would be running native-ads on third party apps to make marketing more effective. The addition of Yelp to this platform is only going to add more value. Analysts believe that expenditure on native ads would rally up to $21 billion by 2018. Facebook already has specialized tools that can be used by local businesses to make their own native ads for third party apps.

Facebook Inc (NASDAQ:FB) closed at $78.51 after gaining 0.11% on May 8. The company has 2.25 billion shares being traded in the market, with a 52-week range of $56.38-$86.07.

 

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David Barry

David Barry

Barry is a senior journalist at Us Markets Daily. He reports, shoots and edits many of his own stories by himself.