Yelp prices shares above projected range Yelp, the business reviews website and mobile app, raised more than expected in an initial public offering despite worries about stiff competition from Google and Facebook. This continues a string of successful internet deals, despite a challenging market for most new issuers. The offering priced late on Thursday night at $15, above its projected range of $12-$14 a share. So far in 2012, just 14 per cent of US issuers have seen pricing upside, versus 22 per cent for a typical year since 2000, according to Dealogic. The deal was aimed at raising money for the company to fund growth. Yelp's venture capital owners, which include Bessemer Ventures and Elevation Partners, sold no shares. The Yelp Foundation, a charity seeded by the company, was the only existing shareholder to sell. Despite the company's well-known brand, many investors and analysts had concerns about competition, notably from Facebook and Google. They've done historically a great job of getting people to participate, but we're seeing Facebook as a black hole sucking in so much of people's time. And businesses have to focus on having a presence there," said Lou Kerner, social media analyst at the Social Internet Fund. Earlier this week, Facebook - which itself recently filed papers for a $5bn IPO - announced it was creating new profile pages specifically for businesses. The sale raised $107m and valued Yelp at just under $900m, or roughly 11 times its sales of $83m last year. It was the second largest internet IPO of the year globally, behind Bazaarvoice's US deal last week raising $131m. Max Wolff, senior analyst at GreenCrest Capital, said his firm values Yelp at $800m-$850m, or 10 times last year's sales, based on projected cash flows. GreenCrest does not expect Yelp to be profitable until at least late 2013. "Paying much more than 10 times sales for a company without profits in a competitive environment is asking an awful lot of the market that has a healthy scepticism around web 2.0," said Mr Wolff. He said Yelp continued to have a strong user community, and had "best in breed" mobile apps. It was the most downloaded local dining app in the Apple store for the last two years. However, he noted that Google was set to redesign the app for Zagat, the review company it bought late last year, meaning "a strong competitor may be on the way." Yelp reported 66m unique visitors a month in the fourth quarter and 25m total reviews posted since its founding in 2004. Yelp has generated revenues from just 24,000 of the businesses and services profiled. The rest is primarily from advertising. As a result, the company remains in the red. Yelp doubled its sales to $83m in 2011, but still made a loss of $16.7m for the year, though that included a $5.9m contribution to the Yelp Foundation. It was cash flow positive, but just barely, producing $250,000.