Yelp's popular online reviews guide the hungry to the best restaurants, the thirsty to the friendliest bars and the flabby to the toughest personal trainers. But, on the eve of its initial public offering, the eight-year-old, still unprofitable company has yet to convince analysts of its long-term prospects. 
 
 FILE - In this Oct. 26, 2011 file photo, the logo of the online reviews website Yelp is shown in neon on a wall at the company's new Manhattan offices in New York. Online reviews site Yelp is expected... (Associated Press) 
 
 San Francisco-based Yelp Inc. late Thursday priced its initial public offering of stock at $15 a share. That's above its expected range of $12 and $14 per share. Yelp is selling 7.1 million shares, while its charitable foundation will sell 50,000. Investment bankers also have an option sell an another 1.07 million shares, depending on investor demand. 
 
 The offering could raise as much as $123 million before expenses. It values Yelp at $900 million. 
 
 That's a lot for a company that hasn't turned a profit since its 2004 founding. Rick Summer, an analyst at Morningstar, says that while Yelp is at "the head of the pack" compared to other review sites, he's concerned that businesses "may not see enough value in (Yelp's) advertising platform to increase spending and justify the expected price of this IPO." 
 
 Though it's best known for restaurant reviews, Yelp's users have reviewed churches, strip clubs, hospitals, hotels and high schools. The company makes money from advertising. Most of the ads come from the local businesses that its users review. In 2011, it booked revenue of $83.3 million, up 74 percent from 2010. It had a net income loss of $16.7 million last year and $9.6 million the year before. 
 
 Like so many startups, Yelp originated as a solution to a problem. Jeremy Stoppelman co-founded Yelp with former PayPal colleague Russel Simmons. Stoppelman, who serves as the company's CEO, wrote about the Yelp's beginnings in an op-ed printed in the San Francisco Chronicle in January 2009: 
 
 "One day in the summer of 2004, I got sick and needed to see a doctor. I asked friends for referrals, but most of them were Bay Area transplants and didn't have any good recommendations. I searched on Google, but found only generic lists on health insurance Web sites. I wanted a doctor that fit my needs, not just any doctor," Stoppelman wrote. "I wondered why it was so easy to find consumer reviews for products like books and electronics, but so hard to find good referrals for local service providers like doctors and plumbers." 
 
 That's where Yelp came in. By 2009, Yelp had grown to 17 million monthly users and 4.5 million reviews. It has expanded overseas, to the U.K., Ireland, France, Germany and beyond. 
 
 Yelp.com attracts 66 million monthly unique visitors and is home to 25 million reviews as of the end of 2011, according to its regulatory filings. People used the company's mobile application, meanwhile, on 5.7 million mobile devices a month, on average. That's an impressive run, but Summer is worried that Google and Facebook "could grab more of the local advertising pie" and take business away from Yelp, constraining the company's potential growth and profitability. 
 
 Foursquare is also edging in on Yelp's territory. The New York-based company best known for letting users check in to venues using their mobile phones, offers local recommendations and user tips on what to eat or do once you've checked in to a restaurant, store or other business. 
 
 Even so, Yelp's stock will likely see a big jump on its first trading day, as investors who didn't get in at the pricing clamor to grab a share. That's what happened with LinkedIn Corp., the consumer reviews site Angie's List Inc. and others. Online deals company Groupon Inc. saw its stock jump 31 percent on its first trading day. On Thursday, though, Groupon's stock was trading slightly below its IPO price of $20. 
 
 Francis Gaskins, president of IPOdesktop.com, expects Yelp's IPO to price above the expected range and thinks "there will be a lot of happy users who don't know valuation metrics" who will buy the stock on its first trading day. Even so, Gaskins says he's a "little bit skeptical" about Yelp's long-term prospects. 
 
 "Sooner or later people will be wanting them to make money," he said. "They won't go away, it's not like the dot-com bust. (But) at some point in time, people are going to get tired of them losing money all the time." 
 
 Nick Einhorn, research analyst at IPO investment advisory firm Renaissance Capital, thinks Yelp has done an "impressive job so far" in building up its user base and content. 
 
 "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," along with new ones, he said. 
 
 Yelp's users are its bread and butter. They're the ones who write the reviews, see the ads and hopefully click on them. To ensure that they trust the site _ and keep using it _ Yelp has kept a sturdy wall between its advertisements and reviews. Businesses can't run ads to boost their ratings and ads are clearly marked. Still, Yelp has elicited complaints from businesses about the way it screens out fake or biased reviews. The company uses an automated program to weed out unreliable posts, such as those written by business owners about their own restaurants _ or a competitor's. Some merchants have complained that the program made legitimate reviews disappear. In 2010, Yelp responded by adding an option to let users see reviews that are filtered out. 
 
 That said, most user reviews are positive. As of August 2011, 38 percent of the reviews on Yelp were five stars, the highest possible rating, and just 11 percent were one-star reviews. On Friday, investors will get a chance to give their own ratings on the company's business. 
 
 Life as a public company will be a change of pace for Yelp. Its new status will invite scrutiny from investors, regulators and the public. The challenge will be to keep it all in perspective. 
 
 "Some companies feel that there is a lot of short-term focus," once they have gone public, said Gordon Tucker, the managing director of Protiviti, a company that helps businesses go public. "The companies that are successful are able to keep the long-term focus in mind." ||||| Jeremy Stoppelman, co-founder and CEO of yelp Inc., San Francisco, California, testifies before a Senate Judiciary Subcommittee hearing called ''The Power of Google: Serving Consumers or Threatening Competition?'' on Capitol Hill, September 21, 2011. 
 
 (Reuters) - Consumer review website Yelp Inc made a sparkling market debut on Friday, buoyed by optimism ahead of Facebook's public listing and hopes for further successful public listings by Internet companies down the road. 
 
 Yelp's stock closed 64 percent higher at $24.58, a day after Yelp priced its IPO at $15 a share - above its indicated range of $12 to $14. 
 
 At Friday's closing price, the company is worth about $1.47 billion - about 17 times its 2011 revenue. 
 
 "If you look at it, there's been a very high trading volume, much higher than normal," said Scott Rostan, a former Merrill Lynch analyst who founded Training The Street, an investment banking school in New York. 
 
 Yelp could be benefitting from the optimism about Facebook's upcoming IPO, he added. "Investors are getting a little excited; there's a social media momentum." 
 
 Yelp's stellar debut follows those of other Internet sensations like LinkedIn Corp, Groupon Inc and Zillow Inc. But while those stocks made large first-day gains, they have since declined. 
 
 Groupon stock's soared as much as 56 percent on its opening day, but has since fallen below its offer price of $20. 
 
 Like Yelp, Groupon is losing money. Yelp generates revenue by selling advertising on its sites, where it has more than 25 million reviews of a range of local businesses and services - from plumbers and shoe-repair shops to restaurants and nightlife options. 
 
 Yelp also competes with Angie's List, which unlike Yelp charges for memberships and whose stock fell 5.4 percent on Friday. 
 
 "Angie's List charges for memberships. That will prevent growth. It can maybe grow to 2 million memberships, but there's a finite number of people who want to pay to access this content," Sameet Sinha, an analyst at B. Riley & Co, said. 
 
 "Their unique visitor growth accelerated in the past year and they are forecasting solid growth over the next few years," Sinha said. 
 
 The company, however, faces stiff competition from Facebook; Google Inc, through its recent buy of restaurant reviewer Zagat; and others like Groupon and Angie's List. 
 
 Stoppelman told CNBC that he was not fazed by competition from the likes of Google. 
 
 "That's a potentially lucrative market, which could be interesting for some big companies such as Google, Facebook to muscle in," Rostan said. 
 
 "It could make Yelp a takeover candidate. As a public company it is a little harder to turn down an offer and it could be a $2 billion morsel for an established company to enter that market," he said. 
 
 According to media reports, Yelp has rejected approaches by Google and Yahoo in the past. 
 
 AMAZON OF LOCAL ADVERTISING 
 
 The San Francisco-based company was started eight years ago in 2004 by former PayPal engineers Jeremy Stoppelman and Russel Simmons, when Stoppelman needed a doctor and online searches turned up only generic lists on health insurance websites. 
 
 Stoppelman, a computer engineer by training, told CNBC he wanted his company to become the Amazon.com Inc of local advertising. 
 
 "We're just scratching the surface of local advertising," Stoppelman said. "It's an enormous market." 
 
 Yelp had 66 million unique visitors and was used in 5.7 million unique mobile devices on a monthly average basis in its latest quarter. It was active in 46 markets in the United States and 25 internationally at the end of last year. 
 
 But the company has incurred losses since inception, and had an accumulated debt of about $41.2 million as of December 31. 
 
 In 2011, Yelp recorded a loss of about $17 million but saw revenue jump 74 percent to $83.3 million. 
 
 Like a slew of recent tech and Internet offerings and the upcoming Facebook IPO, Yelp will have two classes of stock - class A shares worth one vote each and class B shares with 10 votes each. 
 
 This structure is seen by many as a method to keep voting power restricted to the major stockholders as the outstanding class B common stock will represent about 98.7 percent of voting power following the offering. 
 
 Scott said this may be the time for more Internet companies to seek a public listing. 
 
 "In the IPO market there's a window of opportunity, when it's open you better rush through it before it closes," Rostan said, adding that LinkedIn's IPO in May last year created a window until about August. 
 
 "There needs to be some kind of event to open it (the window) and Facebook might be that event," he added. 
 
 B. Riley's Sinha noted that Yelp was a good investment ahead of Facebook. 
 
 "In general, crowd sourcing, social and mobile are the key buzz words for investors and Yelp hits them all. Before Facebook comes along, this is a good social and mobile play for investors," Sinha said. 
 
 Goldman Sachs is the lead bookrunning manager for the offering, while Citigroup and Jefferies acted as joint bookrunning managers. 
 
 (Reporting by Aman Shah, Tanya Agrawal in Bangalore and Alistair Barr in San Francisco.; Editing by Supriya Kurane, Lisa Von Ahn and Richard Chang) ||||| NEW YORK (CNNMoney) -- Reviews site Yelp priced its initial public offering at $15 a share late Thursday, above the target set by the company. 
 
 San Francisco-based Yelp said it was selling 7.1 million shares in the offering, so the company will raise about $106.5 million in the IPO. 
 
 
 
 
 
 
 
 
 
 Yelp said in its first IPO filing in November that it expected to raise $100 million. Last month, Yelp set a target range between $12 and $14 a share. 
 
 An additional 50,000 shares are being sold by the Yelp Foundation. Underwriters led by Goldman Sachs (GS, Fortune 500) have the option of purchasing an additional 1,072,500 shares from the company. 
 
 Founded in 2004, Yelp has developed an ubiquitous brand and amassed more than 18 million reviews of restaurants, salons, dentists and other businesses. Last quarter, about 66 million unique visitors went to Yelp's site on a monthly basis. 
 
 Yelp will start trading Friday on the New York Stock Exchange, under the ticker "YELP." Yelp's debut day comes almost exactly one month after Facebook filed for a $5 billion IPO. 
 
 Unprofitable: Like many other tech companies testing the public markets in the past few months, Yelp isn't yet profitable. For the full year in 2011, Yelp had a net loss of $16.7 million on sales of $83.3 million. In 2010, Yelp lost $9.6 million on $47.7 million in revenue. 
 
 Yelp's main revenue stream is selling advertising to local and national businesses. It also runs daily deals, but in August Yelp cut half its sales staff in that unit. 
 
 Critics have questioned Yelp's high operating costs, as well as its ability to stay competitive in a field with a low barrier to entry. 
 
 In fact, Yelp's initial filing revealed that Google (GOOG, Fortune 500), which is developing its own Yelp-like offerings and recently acquired restaurant guide Zagat, is a key traffic source -- which puts Yelp in a precarious position. 
 
 Yelp itself indirectly addressed another potential problem for the company: the credibility and truthfulness of its reviews. 
 
 In its initial filing back in November, Yelp said it had 22 million reviews on its site. But in an amended filing in February, the figure dropped to 18 million. That's because Yelp said it was "filtering" about 5 million reviews and had removed about 1.8 million reviews. 
 
 Yelp filters or removes content when a review does not adhere to its terms of service. One example: a restaurant owner posting a 5-star review to boost her own company's rating. 
 
 But investors may not be spooked by any of the potential problems, if the recent performances of other social media IPOs are any indication. Last year, several Internet companies went public despite questions about their business models. 
 
 Another reviews site, the contractor-focused Angie's List (ANGI), shares jumped 33% when it started trading in August. It is still trading above its offering price. 
 
 Social gaming company Zynga (ZNGA) raised $1 billion in December from its IPO. And although the stock had a lukewarm debut, the stock has recently picked up steam after reporting solid results and as investors realized how tied it is to Facebook. 
 
 Business networking site LinkedIn (LNKD) has done well since going public last summer. The company has reported a profit in each quarter since its IPO. Shares have nearly doubled from their offering price. 
 
 And shares of daily-deals site Groupon (GRPN) popped 31% in its November debut, despite criticism of unorthodox accounting measures that led to several downward revisions of its financials. 
 
 But Groupon's stock has fallen this year after the company reported a fourth-quarter loss.
– Yelp shares hit the stock market today and soared, despite mixed reviews of the consumer review website's long-term prospects. The initial public offering of 7.1 million shares had been priced at $15 a share, which was above the target range of $12 to $14 it set last month; that valued Yelp at around $900 million, CNN notes. But shares were up 62% in early trading, at $24.60, Reuters reports, valuing the company at around $1.43 billion. That's 17 times its revenue in 2011. The 8-year-old website hosts some 25 million reviews of restaurants and other businesses, and lures close to 66 million visitors a month, but has never turned a profit, and is more than $40 million in debt. Analysts expected the stock to jump on its first day of trading, but with sites like Facebook and FourSquare seeking more money from local advertising, they are wary of recommending Yelp as a long-term investment. The president of IPOdesktop.com tells AP he is a "little bit skeptical" about Yelp's future prospects. "Sooner or later people will be wanting them to make money," he says. "They won't go away," but "at some point in time, people are going to get tired of them losing money all the time."