April 17, 2012 (Chinavestor) Groupon Inc, (NASDAQ:GRPN) continues it's downtrend while Yelp Inc, (NASDAQ:YELP) stays sideways. Many investors believe Yelp will began taking some of Groupon's market share in the online coupon business. I would agree, Yelp has a much better business model.
Zynga Inc, (NASDAQ:ZNGA) is also showing some weakness over the last month.
How do these sites make money?
When investing in Social Media Sites it's important to know where their revenue comes from.
Yelp Inc, (NASDAQ:YELP)
- Sponsored Search: local businesses pay Yelp for traffic to their website.
- Apparel Store.
- Offers/Deals like Groupon.
- Sale of so-called virtual goods.
Groupon Inc, (NASDAQ:GRPN)
- Sale of coupon deals
Now you can see why I like Yelp Inc, (NASDAQ:YELP) the best. Yelp has spent the time to build customer loyalty, they offer a great free service and they have diversified their revenue stream. A tripple threat in my mind.
"Micah Lamar Co-Founded AAPLTrader.com A social media site for Apple Traders, an independent service not affiliated with Chinavestor."