Jeremy Stoppelman

got a Yelp page. But the coronavirus pandemic dealta devastating blow as thousands of businesses across the country were forced to shut down. Yelp laid off a thousand of its own employees. Now with a vaccine in sight, but virus uncertainty is still ahead, Yelp serves as a sort of mirror to the help of American business. Still, it's not COVID that Stoppelman is most worried about. It's the growing

shadow of Google. In this edition of Bloomberg Studio one point Oh, Yelp co founder and CEO Jeremy Stoppelman take me back to March. The pandemic hits and the lights go out, literally at thousands of small businesses across the United States. As the person who runs the most prominent platform for small businesses in the country, what was that

moment like for you? Probably the best word is terror. Uh, you know, it was a scary moment, I think obviously for America, for small businesses, and especially for Yelp, because we're away to find great local businesses, and you know, the first thing crossing my mind is, you know, are

people are gonna still buy advertising? Like our all business is going to be affected or just a portion we had gone through to you know, I was CEO in two thousand eight when we had that major recession, and so I knew that Yelp as a company should be resilient, but I had never faced anything remotely like a pandemic where every business is potentially affected by shut on. So it was a very scary moment for for me and for the company. Did reviews come to its standstill? Did

advertising stop? We certainly took a pretty big hit in advertising dollars of people pause their campaigns. Uh. You know, Fortunately, we had functionality that allowed them to set a future date, and so we encourage people to you know, set a resumed date for their advertising months later, perhaps as the pandemic has passed had passed, or at least when the panic would have subsided. Um. And you know, our focus a YELP was really getting employees ready to work from home,

getting people out of offices. This is all, you know, kind of late February, we were you know, it hit our radars. Hey, this is coming. We need to get you know, salespeople at home. All of our sales people have desktop computers in an office, Like, how do we get them equipped to try and work out of their home and you know, keep the company running. And so there was a lot of operational challenges transitioning people to work from home and getting ready to try and adapt

to this extreme crisis. So fast forward to fall. Yelp shares spike on news of the early success of the Fiser vaccine and if everything works out, that could mean the economy opens faster. That's good for small businesses, that's good. Free yelp. How optimistic are you? None of us have been through a pandemic before, so we can't know everything. But you know, I can't say that in the last quarter, you know, things really had had come back. Economic activity

had picked up. Um, you know, we were seeing people starting to dine at restaurants obviously, you know, with the better weather where we have weren't quite into winter yet, people were returning to restaurants. Home and local services as people spent more time at home really has held up throughout the pandemic. We've really come back in a big way,

faster than even you know, we were hoping for. And with the with the vaccine potentially arriving and starting to get out there, I think, you know, we can we can finally say, hey, there is light at the end of this tunnel. You know. That's been the scariest thing about the whole crisis is we had hoped that a vaccine would arrive, But actually knowing that that one is

there and that it's actually effective, I think is very exciting. Uh, you know, certainly for for us at y'all, hopefully for lots of in the minds of small business owners, and you know, the rest of the world is is very happy, I think to hear that news. So what are you expecting to see over the holidays, given that we're going into winter cold and flu season, potential spike in COVID cases.

We're already seeing hospitalization surge, and we know that people aren't going to be traveling and out there shopping and eating out like they normally would. I mean it's hard. I'm not currently contemplating national shutdowns where everyone is frozen in place like they were, you know, kind of the March April time frame. I think people will have to be cautious. You know, in in restaurant dining will probably be curtailed or very limited, depending on you know, the

situation in that particular region. But I think you know, again for for yelps business, uh, you know, a lot of it is buoyed by the home local sector, which is done really well. As people are home. You know, things happen, your roof leaks, You've got to get that fixed. Your toilet clogs, well, your whole family is help. You know, your your kids are possibly doing the remote schooling there. You've got to get that thing fixed. Um and uh.

And so those services, those service providers will continue to do well and will continue to spend to acquire leads from sites like out Now. You regularly release these economic impact reports, and from what I can tell, by the end of summer, you found that a hundred sixty thousand businesses had closed on YELP. Where does that number stand now? What are businesses telling you about how they're doing? Region to region? We have seen, you know, businesses, lots of

businesses reopen that were temporarily closed. I think the numbers around two twenty thousand of the temporarily closed businesses have

opened back up again, which is a great sign. Uh. And also from a new business standpoint, especially in the restaurant and food sector, we're seeing new business openings at levels that are in line with so you know, that's one really inspiring thing showing kind of the resilience of American entrepreneurship is that businesses are really you know, new new entrepreneurs are still being born in this environment, which

is is incredible. I think it just shows incredible tenacity and bodes well for the economy as we start thinking about one and beyond. Now. Early on in the pandemic, yelped laid off a thousand people. You furloughed a bit more than that. Where does staffing stand now. At the start of the pandemic, obviously, you know, we saw advertising

revenue dropping very rapidly. We had to make some very tough calls around our people uh, you know people that that, uh, we're incredible employees for us, and it was a very difficult moment. We had to lay off a thousand people, as you mentioned, we also furloughed about a thousand people as well, and you know, that set us into a that that put us into a stable position to ride out sort of the immediate impact of the pandemic and

whatever economic damage you know, would result. And four months later we were actually in a position to be able to bring back all of the extent offers back to almost all of the furloughed employees, and so that was a great feeling. Obviously, it's very tough, you know, to let anybody go, but we had made a commitment to these furloughed employees and so it's great to see so many of them back working at Yalpin, and many of

which are here today. Now. The pandemic, as you alluded to, has become very very political, and I'm wondering what your take is on Joe Biden's election. Are you at all concerned that his safety first approach? Could you know, mean the economy opens more slowly? I think we you know, we have to be guided by science. Um, you know,

we we have to take a dispassionate look. We have to take politics out of it and say, what, you know, we can't really have a great economy if everyone's cowering, you know, from impacts of the pandemic, or hospitals are getting overloaded with cases. So we just have to take a sensible approach. We have to listen to the scientists if they're telling us that, you know, wearing masks is going to you know, diminish the am packed to the pandemic,

that we should all be wearing masks. It's very straightforward. It shouldn't be a political issue. It's it's very frustrating that it has been. And I think that costs us valuable time and even more importantly, causes, you know, costs us health and even lives. It seems like the next stimulus package might be more scaled back. Are you concerned about a divided government meaning that small businesses aren't going

to get the help they need. I think the FED chair has been pretty clear that, you know, businesses need supports, especially small businesses need support. And I think the initial stimulus package was a positive and you know, we've been all waiting and hoping for another one, and I think, you know, we shouldn't just have socialism for big companies where they can borrow endlessly with cheap debt from the

you know, powered by the Fed. We we should extend the helping hand to all these great small business owners that are just trying to get by. This is my conversation with Yelp CEO and co founder jeremy'st Doppleman. Up next inside his decision to turn down an offer from Google was a call from Steve Jobs, the deciding factor. Plus Stoppleman wis in on the antitrust lawsuit now facing Google, a company he's not shy about calling a monopoly. I'm

Emily Chang, and this is Bloomberg Studio. At one point out we could spend a lot of time talking about old stories. You've been in Silicon Valley a long time. You were part of the early PayPal team. Um, but there's one old story that I really do want to ask you about, which is that Google tried to buy Yelp back in two thousand nine for over half a billion dollars and you turn them down. Explain how that

played out? Well, and you know, I think that Yelp was doing something really positive which was growing quickly, gathering all this useful information about local businesses that frankly no other UH site had UM and I think Google UH saw that that maps was of growing importance to them UM and was interested in Yelp, and we initially had a partnership, but ultimately I think, you know, Google wasn't satisfied with that partnership and wanted to get into the

business themselves. UM and so then you know, there was a back and forth where they had some interest in Yelp, but ultimately it didn't work out. I think we we saw things differently, and you know, I think that that was good. Uh. It allowed yelled to stay independent, to grow on its own UM and UH. And frankly, I think I've I've been able to develop as a CEO quite a bit as well, So I think it's been

good for me personally. Now, as the story goes, Steve Jobs, who was obviously running Apple at the time, Google's biggest competitor, called you to convince you to turn it down. Did that really happen? It did. Yeah, it was a bit

of a surreal moment. I'd call it probably a career highlight, still peak, a peak highlight for me when an assistant of mine, you know, broke into a meeting and like tapped me on the shoulder and literally slipped up post it note that said Steve Jobs is on the line, and so I ran out of the meeting and then you know, picked up the phone, and of course it

wasn't Steve Jobs. It was Steve Jobs assistant was on the line, And so then I was waiting for Steve Jobs, who did ultimately get on the phone, and he had some not so nice things to say about Google and something nice things to say about Yelp and said, you know, he loved Yelp, and then we should keep going. And you know, if it was a money thing, then we should be talking to Apple, not not Google. But we should just keep doing what we're doing. And you know,

I thought that was good advice. So fast forward to today. Yelp is now a two billion dollar public company, but also Google is now your biggest competitor. Did you make the right call? Well? I think I did. Uh, you know, I think Yelp continues to serve on its mission, which is connecting people with great local businesses, and it's been a really rewarding journey and I think lots of people

find yea still incredibly value lable. I think, you know, over a hundred million people come to Yelp every single month, uh and steer themselves to a great local business. So I think it's it's going well. So the Department of Justice has recently sued Google over antitrust taking on Google. Competing against Google is no joke for for any business. What was your reaction to the suit. We We've been working on on this topic for a very long time.

So there was a good feeling, I would say in the Yelp office, because we've been kind of shouting from the rooftops for a very long time that you know, there is a monopoly problem in this country, and in particular, there's a Google problem in this country. And Google, you know, has behaved illegally and uh you know has has leverages monopoly um in ways that are destructive to innovation and competition and that you know, it's bad for consumers, uh,

you know, bad for small business owners. And so it was great to see some you know, some early validation of that from the d o J. Now we've all seen the increasing number of Google reviews and you know, yelps main complaint that Google favors its own reviews over yours isn't actually the core of the case. Are you at all concerned that your concerns might get passed over?

I mean, it's hard to say where the case goes right now, because the state A G s will be uh, you know, sort of bringing their own cases and presumably it gets consolidated. So it's hard to know the exact scope of the case. I think, you know, the the early signs that you know from our perspective are positive. And you know, again there's bipartisan support for really scrutinizing Google and taking a look at their behavior over the last decade. You look at like television over the last

forty fifty years, and it's a highly regulated industry. You know, you look at radio, highly regulated. Even even going back to movies, there were antitrust cases that made a big difference in the distribution of of of films. And so why is it that technology should be completely immune to that, especially these new you know, sort of the Google generation of technology companies. Why shouldn't you know, Congress exercise its power.

Why shouldn't the DJ investigate? Why shouldn't the FTC investigate you told sixty minutes back in. If I were starting out today, I would have no shot of building Yelp. That opportunity has been closed off by Google and their approach. If you provide great content in one of these categories that's lucrative to Google and seen as potentially threatening, they will snuff you out, They will make you disappear, they will bury you. Has Google continued to try to bury

Yelp since that time? It's an easy thing to test for yourself. You could just you know, do essentially any search with local intent and then see how far down the page you have to go to get to any kind of organic result, especially in you know, a category that's particularly lucrative from an advertise, from a SMB advertising standpoint, I mean they've they've really tried to maximize the revenue, and do think so have have put the consumer in the back seat, And I think that's a real problem.

But then also it's stifles innovation because if if it's basically there's no organic content anymore, there isn't really that incentive for creators to try and create new and interesting websites collect information from users. I think, you know, it's quite sad, and I think if you talk to the

venture capital community you'll hear that as well. There just isn't as much interest in ideas that are powered by search engine optimization, where you know, you create really wonderful content and then Google or other search engines drive you traffic like it's just Google now, and if it's a lucrative vertical, they're going to try and suck up all

the revenue. Now. President elect Biden hasn't detailed his thoughts on antitrust yet, but we know that the Obama administration was fairly close to to Silicon Valley and Google in particular. How would you like Biden to weigh in on antitrust? You know, what do you want lawmakers to do? Should should Google be broken up? Yeah? I think all we can ask for is independent thought. Um, And so you're

you're absolutely right that. Unfortunately, the Obama administration has a very bad record when it comes to antitrust enforcement and especially Google scrutiny. I think Google's lobbyist was the number one lobbyist in the White House by visits, and so

that that's been widely reported. Uh. And even as the FTC was purportedly investigating there was seemingly you know, back channel communication with Google, which you know is very sad uh to to learn of, And so I would hope and I think there's some indication that Biden is going to take a more independent view of this, and I think we'll have to see, you know, who's involved in the administration, who's in the cabinet, you know, who are

the people around Biden. Uh. You know, My personal thought is like, somehow we have to get Elizabeth Warren in there, because she's been particularly strong on you know, hammering home the point that monopolies are not good for the economy, they're not good for innovation, they're not good for consumers, and so we need someone like at with a really strong message and a strong independent streak as well. Now, all of that said, some businesses have complained that Yelp

reviews skew more negative. How do you respond to, you know, this complaint from businesses who you know might prefer Google because they see that they have more positive reviews there. We try to be you know, the most independent, create a level playing field for businesses, and you know that frustrates businesses that, frankly on other platforms, are used to getting what they want, which is, you know, being able to ask their friends to write reviews for them being

five stars, and in fact the data supports that. So the FTC, an economist there, recently put out a paper that talked about the review distribution on the various platforms and Yelp actually has the most balanced review system, which is very validating. That feels great to me because that's what we're trying to achieve, is just a mirror of the real world. You're listening to my conversation with the

CEO and co founder of Yelp, Jeremy Stoppelman. Coming up, Stoppelman was a key player in the famed PayPal mafia. His lessons for up and coming entrepreneurs and vision for the future of Yelp, post pandemic and in a new normal. I'm Emily Chang. This is Bloomberg Studio one point. Oh, stay with us. I do want to take a quick step back and talk about how you got here, because you know, it really is so fascinating. You're an engineer.

You worked at x dot com back in the day, the online bank that was started by Elon Musk, which merged with PayPal. What are some of the biggest lessons you've taken from that time in your life and those people whom I imagine are still in your life today. One of the big takeaways from PayPal was just how much you could do even if you had no experience.

And so I I joined x dot com, which you know eventually merged with with PayPal when I was twenty two, I think, um, and very quickly I became an engineering manager maybe a year and a half later, two years later, and it ultimately rose and into the executive ranks there on the engineering side. And think about it was kind of preposterous that those folks would give me so much

responsibility so early in my career. But the fact that we we somehow pulled it off and created a successful consumer brand UH and payment site UH that ended up being really critical to eBay and then ultimately now as a payment service that so many of us use, I think validates that, Like, it's not all about experience, A lot of it is great determination, creativity, innovation, all all

of those good things. UM. And so I've tried to bring that with me to Yelp frankly, and we tried to make sure that people have fantastic careers we have a lot of growth from within when it comes to promotions, and we have a lot of home grown you know now senior employees. So it's really validating to see people step up and and take on more responsibility over time.

Where do you fall on the importance of culture, because it seems like, you know, there's a group of CEOs and Silicon Valley who who seem to think it's important in others who seem to think it's all about growth. Well, I think you want both. Uh it's you know, I think it's hard to be a company and not have robust growth. Uh. It just fundamentally is difficult, especially in the technology industry where things change so fast. So if you're not growing, then you're probably not keeping up and

then you know, eventually you fall over. But I think we also see that culture is important, especially in recruiting the top talent that you need to succeed here in Silicon Valley is is you need to have a great culture. Um, you need to be on top of things what's going on in your organization, because if you don't, somebody else will will be good at that, and then people will flock to that company. That that is also high growth. There's always you know, other shiny new objects out there.

It's you know, you want to deliver. I think on both dimensions as a CEO. There's been some reporting and Business Insider that Yelp has an aggressive sales culture. What's been your response to that. I mean, we're one of one of the most highly scrutinized sales teams I think in the history of of local sales teams. I mean for many, many years. Uh, you know, business owners, for instance, would accuse us of extortion because they claim that you

could take down Yelp reviews if you paid us. That was never true, and so any individual anecdotal accusation I think you have to take with a grain of salt. We do have thousands of salespeople, and so is every conversation going to be perfect? Absolutely not. But you know, we have systems in place to ensure that that the conversations are the ones that we expect, are empathetic, are thoughtful,

and the vast, vast majority of those conversations are great. Now, I've interviewed many folks on the PayPal mafia over the years, and they all seem to agree that, you know, very smart, but also very lucky and very lucky to have each other. If you are a woman or a person of color in Silicon Valley these days, you know, what's your advice? How do you break through if you don't have that kind of a network. I mean, I think Silicon Valley

has gotten better on this dimension. I think there's a growing awareness of the need to create opportunities for people of color, for women. Uh, and so I you know, I would make sure that you're aligned with a company that that does care about these things. I think help Is is a company that does care about these things, that that cares a great deal about diversity. And a lot of these companies are now publishing, you know, annually their numbers on how are things improving? You know, are

they making progress? Do they have something to show? And I think Yelp has consistently made progress on that dimension. And then it's all public, it's it's published annually in our reports. Um, and so that that's probably my best advices is you know, these are talented people. They do have a lot of options. To make sure you choose an option that that supports you and makes you know,

it makes you feel valued. Because there's so many great companies in Silicon Valley, like, don't waste your time on someone that that doesn't value you. When you look ahead, let's say five years from now and the pandemic is hopefully in the rear view mirror, what is going to

be the biggest source of growth. Well, I think we have a lot of opportunity to better monetize yell We talked about how only about of our leads are monetized right now, and so we'd love to see that percentage drift up because there's just so much incredible value flowing through Yelp accruing to business owners, and we want to give a boost to the people that are paying us. We want to help our advertisers get more leads, uh,

And so that's a big focus for the company. And also we just want to build out our presence in home and local and some of these areas that the people may not be as aware of, Like I think across the country, everyone knows Yelp as a restaurant site, but how do we shift that perception and really, you know, drive home the message that Yelp is is for anything that you need locally, any service provider, any local business you should be turning to YELP because it has, as

we talked about, you know, the most balanced rating system, the most useful and trustworthy information and says, skip that whole Google box and just come to the ELPAP. That's a great place to end at. Jeremy Stoppelman, thank you so much for joining us today on Studio one point. Oh. It's been great to have you. Thanks for having me. Bloomberg Studio one point I was produced and edited by

Kevin Hynes. Our executive producer is Alison Weiss. Our managing editor is Daniel Culverton, with production assistance from Mallory Abelhausen. I'm Emily Chang, your host and executive producer. This is Bloomberg