Sunday, February 6, 2011

Some interesting contrasts between Webvan and Yelp

Of course, Webvan and Yelp cases share some similarities, but there are many interesting contrasts partly due to their different industries, both grocery and last-mile delivery industries for Webvan and information goods industry for Yelp. First, during the first few years, Webvan tried to launch its services in several big cities while Yelp just focused on establishing its presence in San Francisco. Second, Webvan spent over $100 million upfront on distribution centers whereas Yelp needed very small infrastructure investments. Third, Webvan needed a complicated supply chain management since it’s in both grocery and last-mile delivery industries. Meanwhile, Yelp was in information goods industry and dedicated to its web content. Finally, Webvan’s direct source of revenues was users and could have made profits if the number of users was big enough. In contrast, Yelp already had a great community of users but could not find ways to monetize this.

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