Welcome to the Yelp Q3 2013 Earnings Call. My name is Leslie and I'll be your operator for today. [Operator Instructions] Please note that this conference is being recorded. I'll now turn the call over to Ms. Wendy Lin. Ms. Lin, you may begin.

Good afternoon, everyone, and thank you for joining us on Yelp's third quarter earnings call. Joining me on the call today are CEO Jeremy Stoppelman; and CFO Rob Krolik; and COO Geoff Donaker will join us for Q&A. Before we begin, I'll read our Safe Harbor Statement. We will make certain statements today that are forward-looking and involve a number of risks and uncertainties that could cause actual results to differ materially. Please note that these forward-looking statements reflect our opinions only as of the date of this call and we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. Please refer to our SEC filings, as well as our financial results press release for a more detailed description of the risk factors that may affect our results. During our call today, we will discuss adjusted EBITDA, a non-GAAP financial measure. In our press release issued this afternoon and our filings with the SEC, each of which is posted on our website, you will find additional disclosures regarding this non-GAAP financial measure and a reconciliation of historical net loss to adjusted EBITDA. Lastly, as you may have seen, we announced the filing of an automatically effective registration statement for a proposed offering of our Class A common share. Please refer to the separate press release and the Form S-3 filing at www.sec.gov for the specific details relating to this proposed offering. As I'm sure you can understand, we will not be commenting on the proposed offering in our prepared remarks or during the Q&A session for our earnings call today due to securities laws and quiet period limitation. And with that, I will turn the call over to Jeremy.

Thanks, Wendy, and welcome, everyone. We had a great third quarter highlighted by 68% revenue growth and record highs across our core metrics. We executed well across all areas of our business and we continue to innovate around 3 key themes: Mobile, geographic expansion and closing the loop with global businesses. First, Yelp is well-positioned to take advantage of the mobile evolution in local advertising. We continue to work on improving the consumer experience on mobile. And in August, we launched the ability to write and post reviews from mobile, which is one of the most requested features from our community. Since then, Yelpers have averaged approximately 10,000 mobile reviews a day or about 25% of all new reviews, which is testament to the high engagement we see on mobile. We're delighted by the high quality, rich reviews we continue to see. In fact, the star rating distribution for reviews written on mobile mirrors what we see on desktop. This shows us that consumers are taking the time to write thoughtful reviews of their experiences with local businesses. We also enhanced the search experience on mobile by adding search filters, such as outdoor seating and free Wi-Fi, that previously had only been available on the desktop. This constant focus on the consumer experience has yielded great results. In Q3, our app was used by 11.2 million unique devices on a monthly average basis, with 62% of searches now coming from mobile devices, and 46% of ad impressions being shown on mobile. Second, we continue to make progress with our international efforts. As we roll out the Yelp playbook across the globe, we are seeing increased brand awareness and consumer engagement. In Q3, 18% of our traffic and 8% of our reviews came from outside the U.S. We continue to focus…

Thanks, Jeremy. As Jeremy mentioned, we had a great third quarter. Please note that we have posted a few slides on our Investor Relations webpage that accompanies the financial portion of the webcast. Let me start with the financial results. We are very pleased with our performance as we achieved record results across our core metrics. In the third quarter, revenue grew 68% year-over-year to $61.2 million. Adjusted EBITDA was $8.1 million, about a 270% increase year-over-year. Moving on to the 4 key operating metrics. Cumulative reviews grew 42% year-over-year to 47.3 million as we added 4.8 million reviews in the quarter. Approximately 1 million of these reviews added in the quarter came from the integration of the Qype France and U.K. sites. Our average monthly unique visitors grew 41% year-over-year to roughly 117 million. Approximately 33% of these uniques are accessing our mobile site. Claim local businesses was 1.3 million, up 51% year-over-year, and active local business accounts grew 61% year-over-year to approximately 57,200. Let me walk down the P&L starting with the revenue mix to provide some additional color. We are seeing great momentum across all revenue sources. For the third quarter, local revenue was $51.2 million, up 80% year-over-year. Brand revenue was $6.9 million, up 17% year-over-year. Other revenue increased 55% year-over-year to $3.1 million. International revenue contributed about 5% of total revenue in the quarter. Our customer repeat rate, defined as the percentage of current customers who advertised with us in the past 12 months, was 73%. Gross margin was 93%. Total sales and marketing was approximately 56% of revenue compared to approximately 59% last year, reflecting leverage in the model. Domestic sales and marketing was 53% of revenue compared to 54% in the prior year's quarter. Sales headcount grew 53% year-over-year as we made up…

[Operator Instructions] First question comes from Mark Mahaney with RBC Capital Markets.

Two questions please. First, Jeremy, you talked about the impact of the mobile review functionality. Broadly put, do you expect that to be -- is there any evidence of what impact that will have on overall usage or user growth given how popular, I think, of an add that would be? And then secondly, could you just talk about the international profitability ramp? I know it's still earlier stage for you but are those markets that you've been working in and integrating in, have those been ramping in terms of profitability similar to what you saw historically with the U.S?

Sure. Thanks, Mark. So on the impact of mobile reviews, we're obviously quite excited about the metrics we put out there today, 10,000 mobile reviews each day, representing about 25% of daily review volume and provider perspective, we're just getting started. We just put it out there, Android literally came out just a few weeks ago. How it changes engagement or really affects our contributors, it's hard to say at this point but needless to say, the folks that have been asking for it are quite delighted. We see that come up in reviews of the app. And so we feel really good about the change and we're really feeling great about the quality of content that's coming in through that channel. So I think it's a net positive and of course, more high-quality content should lead to more traffic, more distribution. And Rob can take the international question.

Mark, so in terms of the international profitability ramp, I mean, the way I'd look at it is kind of a revenue ramp. So we did a few hundred thousand dollars last Q2 -- Q3 2012. And so in this quarter, Q3 of 2013, we developed $3 million of 600 plus increase in revenue and I would say it's early on but if you look back to your point about how the cohorts were doing way back when, I'd say it's ramping fairly as it did way back in the day for the U.S. So we're pretty happy with where we are with those teams out there, I give kudos to the teams in U.K. and Hamburg for really making it happen. And we're also just now selling Yelp ads in Hamburg in Germany now as of October 1. So we're pretty pleased with our progress with international.

Your next question comes from Youssef Squali with Cantor Fitzgerald. Youssef H. Squali - Cantor Fitzgerald & Co., Research Division: Two questions, please, here as well. First on -- can you talk to the pricing disparity between mobile ads and desktop ads and to the extent there is one, maybe can you just help us with just the magnitude of the -- on what you're trying to do to close that gap. And second, can you talk to the decline in EBITDA margin this quarter. We saw some deleverage. What precipitated that and how should we be thinking about it near term?

Youssef, it's Geoff. I'm going to take the first part of your question on pricing. Today, we really don't differentiate pricing between mobile and desktop. As a Yelp advertiser, there are a few different ways they can pay. The most common is you buy a subscription bundle that includes both your enhanced profile on mobile and desktop and it also includes a basket of targeted ads that are going to show up across desktop, tablet and mobile devices. And again, we don't differentiate between pricing there. When it comes to pay for performance advertising, that sort of takes care of itself. Advertisers have to bid and then, of course, we'll deliver that, our system delivers that in the most high rpm way that we can. So at this point, we really are platform-agnostic and the goal is to make sure that we show those ads from the best place we can.

It's Rob. Regarding the EBITDA deleverage from Q2. So on a percentage basis that's correct. On an absolute basis, it's actually up to $8.1 million in Q3 and what I'd call out is that adjusted EBITDA is up about 270% year-over-year and we generated about $7 million from operating activities in the quarter. We took the opportunity, I think, in Q3, and we called this out in Q2, that we had a little bit of light hiring in Q2 so we kind of stepped on the gas and we added about 300 people, approximately 300 people net ad in the quarter. So we're up to about 1,800 folks that are on board at Yelp. And so we're pretty pleased with that. We figured to take advantage of this huge local advertising market opportunity, we'd go ahead and step on the gas a bit and hire as many as we could. Obviously, keeping that nice balance between not too fast, not too slow. So we -- and there were some other one-time expenses that hit the quarter in terms of the move into our new building and the related rent expense, some stocks cost and legal expenses offset with a legal accrual reversal. So we feel pretty good about where we are and we did raise the guidance for the year to -- or at least to $28 million to $29 million.

Your next question comes from Neil Doshi with CRT Capital.

Jeremy, can you talk a little bit about the Android versus iOS? And it seems like you've been making a lot of headway on iOS. Any thoughts on Android? It seems like the development sometimes falls behind for Android and then you guys kind of play catch-up to iOS there. Any thoughts around Google kind of pushing their Google Now service and not being as deeply integrated on the Android front? And then one more quick question for Rob in terms of product development. As a percent of revenue, how should we think about that on a go-forward basis?

Thanks for the questions. So Android versus iOS. On the development side, some of what's going on there is just staffing. So we try to hire as many developers as we can and we've been more successful on iOS over the last year, I would say, and we just recently hired a bunch of additional people on Android. So we are planning a bit of catch-up. Our goal is certainly to be at parity across all the features and functionality. With that said, sometimes features do lead on Android, I believe, photos and reviews, for instance, recently launched on Android and will be later coming to iOS. Both are doing well. We're actually doing great on both platforms. iOS represents a bit more of the usage which I think you see across pretty much everyone in our category and especially U.S.-focused Internet companies. And part of that I think is just demographics, the people who are buying iPhones tend to be more interested in downloading apps than using the Internet. Android, we -- as you may have seen out in the marketplace, as far as research is concerned, is often the free phone, so therefore is getting less-engaged users. With respect to competition, I think we've got incredible focus on local and community building in specific in cities all across the world now. And that gives us highly differentiated content, something that Google has continued to struggle with and pretty much every year, they're reinventing their efforts and calling it something new, giving it a new name whether it's buying Zagat, selling Frommers, calling it Places or HotPot, et cetera, et cetera. So we take them seriously but it's been 8 years of competing quite successfully there.

Neil, it's Rob. On the product development side, yes, we did acquire SeatMe in the quarter. So they had more engineers. Of the 15, I think, 8 or 9 folks were engineers. And also, we're making a lot of progress on people wanting to come to Yelp on the engineering side. So we've definitely been investing in that. And as Jeremy just said, on the mobile front, we definitely hired some more Android developers so we could make that on parity with the iOS. So in terms of how to think about it, I think we'll continue to invest in that given the growth rate and the opportunity. I don't know that it will be much higher than where in terms of a percentage for maybe Q4 but we'll definitely keep investing in that.

We'll take the next question from Brian Fitzgerald with Jefferies.

Could you give some sense of the growth rates and update on the cohorts like earlier ones, '05, '06 for example. Are the later cohorts still following that same trajectory and trend as the earlier ones? And then, maybe the pricing differential between Europe and the U.S., impacts there and how do you see those closing over time?

I'll take the first one. In terms of the cohorts, yes, we were actually looking at the cohort data. We actually have it as a slide on the IR site, I think it should be up now. We see the -- actually all cohorts, the '05, '06, '07, '08, '09, '10, accelerating from Q2. So we were at 43% revenue growth in Q2 2013 for the '05-'06, the earliest cohort, and that actually accelerated to 57% this past quarter, Q3. So we feel good about where that's trending. We're not specifically positioning the sales force on that particular cohort but it's good to see because it just shows that we're fairly underpenetrated in even the oldest cohort market. So -- and then as you look beyond that, even beyond these cohorts, we're making a lot of progress. Obviously, local ad revenue grew 80% and that accelerated from 77% in Q2. So all the data is up there, happy to any answer any other questions about that but all cohorts accelerated in the third quarter.

This is Geoff. I think you also asked a question about how are we pricing ads in Europe versus the U.S. The short answer is directionally the same. We have experimented with a variety of different price points in both -- in kind of all of the above markets. We really just started selling Yelp advertising in Germany a couple of weeks ago, as Rob mentioned, but directionally, at this point, those price points are very similar to what we offer in the U.S., too. So over time, our expectation would be that we'll certainly evolve and look at pricing on a market-by-market basis in order to do the right thing for each local business environment. But overall, our expectation is that Europe should end up looking a whole lot like the U.S. over time.

Our next question comes from Lloyd Walmsley with Deutsche Bank.

This is Kevin LaBuz on behalf of Lloyd. I'm just wondering what you're seeing with the callbacks and ad units on the Yelp platform and is that impacting your ability to acquire customers and to retain them on the business advertising side? And I have a follow-up.

This is Geoff again. Now the short answer to your question is yes. Good news on both of those products so far. They are pretty different, however. I want to differentiate those. So you mentioned the Call to Action unit. That's a product that we offer to all Yelp advertisers today. We've gotten really good uptake in the first few months since it's been out and I think as Jeremy mentioned earlier, some recent internal analysis has shown that advertisers with that CTA or Call-to-Action unit are actually seeing a 15% higher conversion rate in -- from views to leads on their Yelp pages. So that's obviously a really positive sign and makes us want to continue to roll that product out even further. Now the Yelp platform is also in its early days. We wouldn't think of participants in the Yelp platform as necessarily being Yelp advertisers since they are coming in by way of one of our platform partners; for instance today, that's Eat24 and delivery.com. However, the numbers there are also really positive. We are seeing thousands of orders a week in just these very first few months of Yelp platform. And of course, we continue to add new restaurants to those platforms today and then work towards adding new platform partners in different verticals later this year or early next.

And your next question comes from Ron Josey with JMP Securities.

So 2 quick questions. One on domestic. I believe Yelp launched around 4 new domestic markets this quarter, which is one of the largest sort of launch quarters to date domestically at least increasingly. So given the broad user base we're seeing with unique users growing and a number of reviews accelerating, is it getting relatively easier to launch new domestic markets and I guess, importantly, is it time the monetization improves closer to the 18 months relative to the 18- to 36-month typical timeframe. And a quick follow-up, is there any update on the click-to-call feature that you all have? I think in 1Q, you mentioned 15 million click-to-calls were done in 1Q. I'm just curious what that was in 3Q.

This is Geoff again. I'll take the first part of your question. And on the domestic market, there's no special answer to why there were 4 domestic market this quarter versus the previous quarter and we're really just introducing these new markets in that same sort of Goldilocks pace Rob mentioned before which is when we can find the right community managers and when each of those markets is ready, we go ahead and launch them as quickly but with high-quality as we can. As to your question about monetization of those markets, it's not something that we track particularly closely for our more recent markets. I think it's fair to assume that revenue does hit those markets faster than it did in our earliest case study examples that we've given like Philadelphia or San Francisco or New York, for instance, where we were still in the earliest stages of building a sales force. At this point, once we do get content and traffic going in a newer market, we are able to go ahead and assign that territory out to our existing sales force and then folks are able to start calling local businesses in those markets. So I think it's fair to assume that some revenue hits those markets earlier but as to whether or not that overall cohort accelerates, that's not something that we've looked at closely. And then, Jeremy, will you answer the second part?

Yes. In terms of the mobile app usage, the number of calls, so it was 19 million in the quarter, 2 businesses, local businesses and there was 27 million click for directions in the quarter as well in Q3.

And point of clarification. I think you said paid or something of that nature. And so those are just click-to-call or click for direction, they're not actually paid.

Yes. Then we do have a call, a pay for call feature, if you will, product, it's a very small de minimis amount for our entire P&L. So these are just -- if you look at mobile app and what's happening, these are 19 million calls to local businesses and we show all that data back to the business owners on the dashboard.

Your next question comes from Heath Terry with Goldman Sachs.

The question, I was wondering if you could give us a sense of what kind of monetization levels or monetization you've seen from increasing utilization of the inventory that you have. Back when you went public, there was a significant amount of inventory between mobile and international that was essentially unmonetized. What degree of monetization or how large is that percentage of unmonetized inventory on the platform today?

This is Rob. So there was actually -- we saw quite a bit of inventory that's unmonetized. So one of the reasons we're pretty focused and the sales team is pretty focused on reaching out to new local businesses to sign up because we have a lot of inventory left to be monetized. We haven't given out that percentage but you can imagine that it's, as a percent, pretty small relative to the total of inventory. So we have a long way to go there and that's definitely not a constraint of the business.

Your next question comes from Mark May with Citi.

Really, just in mobile, are the impressions in clicks and calls on Yelp Mobile more valuable than on desktop? And if so, what's the rough magnitude of the difference in ROI or however you'd like to frame it?

It's Geoff. There are a variety of ways that we can look at that but the short answer at this point is that an impression, by and large, is about the same value on desktop or tablet or mobile to an advertiser. If I'm looking for a mover, it doesn't really much matter what platform I'm using. I'm looking for a mover and I'm likely to choose one on Yelp and go ahead and call that mover. To us, mobile and tablet have some advantages, particularly if you're using a Yelp app because we can report back to the business owner exactly how many calls they got or clicks to direction, where we're a bit more limited sometimes on desktop. There are some actions we can show but we can't show all of them the same way we can on mobile. So that's certainly useful to us but as to whether or not we price those things differently, I think back to a question Youssef may have asked, we don't price them differently at this point. And while that's something that we might look at it in the future, pricing leverage is really not something that we're focused on in the near term since we just look at that addressable market of millions and millions of local businesses and given that we've only got 57,000 odd customers today, we feel like we're still just getting started.

Your next question comes from Kevin Kopelman with Cowan and Company.

Can you give us any color on what kind of momentum you're seeing in Europe? And also, how smooth was the Qype Germany switch-over given it's a lot larger than the previous markets you transitioned? And then, I apologize if I missed it but could you give us the percentage of revenues from international and also, how many advertiser additions in the quarter were from Qype?

Yes. Kevin, let me start with the last question first. So percentage of international revenue is about 5% or $3 million in the quarter. And then to your question about -- was it mobile ad impressions? Sorry, business ads. So in the quarter, we generated about 5,800 net adds in the quarter and of that, the Qype additions were fairly small. I'd say maybe a couple of hundred, if that. You also asked a little bit about Qype and how that integration in the overall traffic. So today, we're seeing about 18% of our traffic coming from outside of the U.S. and that's up 98% year-on-year. So I guess, the short answer to your question is we're seeing great growth internationally and specifically concentrated in Europe where we've been working on those Qype integrations. I think Jeremy mentioned earlier that we have completed the integration of Qype France in the U.K., which are 2 of their 3 biggest markets over the last couple of months. And Germany will be coming very soon. We have, I guess, as we also earlier mentioned, started selling Yelp ads in the U.K -- in Germany, excuse me, and we'll be cutting over that German site again coming very soon.

Your next question is from Chris Merwin with Barclays.

You talked a bit about the progress you're making with Call to Action and also now the customer activity feed and it certainly makes sense about how that's going to help current advertisers better understand the ROI that they're getting from Yelp. But can you talk a bit about how those features will help the nonpaying accounts convert to paying and is this something that the sales force is pushing into that, maybe a catalyst to help improve the penetration rate of the claim accounts? And then, also, just as it relates to the integration of SeatMe, how should we think about that impacting your current partnership with OpenTable?

All right, thanks for your questions. I'll take the first part and I think maybe Jeremy will answer that SeatMe, OpenTable question. So as to the 2 products that you mentioned, the Call to Action product, as well as the customer activity feed, the Call to Action product is available only to paying advertisers, as you mentioned. And certainly, we think that's a good thing for paying advertisers. Of course, it's also something that our sales force mentioned themselves as part of the sales pitch. So we do think it's one more item in the basket of things that we're selling to a local advertiser or local advertising prospect. And so while early days, we're hopeful that, that makes a Yelp package even more attractive than it might have been prior to that launch. On the customer activity feed, that's actually a feature that's open and available to every business with a claimed Yelp account. So even nonpaying businesses do get to see all of those activities that are going on Yelp and on their profile page and their various leads. So again, as to the question of how does that help sales, well, we think even nonpaying businesses being able to understand all the value generated off of Yelp is a great place to start and a really good conversation starter to help them think about whether or not they may want to increase that number and again, pay for some advertising to do that.

And, Chris, to your SeatMe, OpenTable question, we continue to have a great relationship with OpenTable. You can still seamlessly book reservation at a high-end restaurant whether it's on the site or on your phone. We do see a lot of opportunity for SeatMe. It's a lower price point product and so we think there's actually different customers out there. Obviously, there's going to be some restaurants but there's a whole wider group in the restaurant food and nightlife categories we look at. We've seen customers like wineries sign up bars that take reservations. And so we think that category as we look at it with the SeatMe brand, the SeatMe product is actually far bigger than just the high-end restaurants.

And your next question comes from Darren Aftahi with Northland Securities.

Just 2 quick ones. First, on the Yelp platform, can you kind of talk about the timing of some of these new verticals you just mentioned, dentist, spa and home repair, I think, in your prepared remarks? And then what the potential revenue models are going to be there? And then second one, what was home and local services as a percentage of revenue in the quarter?

So I'll take the -- this is Jeremy, the first question about Yelp platform. We don't have very specific timing but we are working towards adding these additional partners in the areas that you mentioned. I think early next year, we should have more folks and so that's what we're working towards but we haven't set specific dates. And on the revenue side, right now, this is really about the consumer experience. What we were trying to do is create just like how Amazon has sort of dominated e-commerce by having this horizontal experience of whatever product you want, you can buy it and have it shipped to you. We want to re-create a similar thing for consumers on Yelp. They can find any type of local business and then be able to transact, book an appointment, get that person to show up at their door, we think that's just a phenomenal experience. So that's where our focus is rather than driving revenue. But in these relationships, they all do have a revenue component. And so as that becomes bigger, I'm sure we'll break that out.

It's Rob. On home and local, so as a percent of revenue, it's 24% and just to kind of round out the top 5, the home, local in Q3 was 24%; restaurants were 16%, beauty and fitness; 13%; health, 12%; and shopping is 11%. So fairly similar to actually Q2 2013.

Your next question comes from Stephen Ju with Credit Suisse.

This is [indiscernible] on for Stephen. We noticed that you recently changed your privacy policy and we're starting to see ads from some local businesses incorporating user reviews. We were wondering if you have any early read on how well the new ad format is working.

This is Jeremy. So we have made some changes to our privacy policy, however, that was not connected to the feature you're talking about where review snippets are shown as part of the ads. That's actually been there for, I think, several years, if not since the beginning of the ad product.

The next question is from Rob Sanderson with MKM Partners.

Can you talk a little bit more about your go-to-market on SeatMe and this is really layering into your sales model effectively. What have you learned to date, how big a focus will this be for you? And then second, on international monetization, what have you seen when you moved some of the smaller Qype markets over to the Yelp platform in terms of the monetization ramp? And then can you also give us a sense of how much bigger were France, Germany, U.K. for Qype than the markets that you've already moved?

Thanks for your questions. This is Geoff. I'll give them both a try. So first one, on SeatMe and our go-to-market strategy, we're delighted that the SeatMe team has now moved into the Yelp buildings; that happened several weeks ago now as we moved into our new headquarters and integration is off to a great start. As Jeremy mentioned, we're working actively now to bring that SeatMe functionality onto the Yelp platform so that consumers can go ahead and use that coming up very soon. As to kind of go-to-market and how we approach Yelp advertisers and prospective new advertisers, we're experimenting with price points and approaches there. So kind of nothing to say definitively today but I would expect that we'll be experimenting with that over the next couple of quarters and we'll be able to tell you more definitively at that time. Our expectation though is that this is a kind of a service that would be very attractive to many Yelp advertisers in the restaurant food and nightlife categories in the years to come. As to international monetization, it's really early days as far as those Qype markets go. We were selling in the U.K. starting in the middle of last year and that continues to go well. We, of course, now do have more content in traffic against which to sell advertising because of the Qype integration. In France and in Spain, we actually grew our sales capabilities thanks to the Qype acquisition and have begun selling into those markets as of a few months ago now. And so far so good. In Germany, as we kind of mentioned earlier in the call, really those guys were selling the Qype ad product until just a couple of weeks ago and have only recently started selling Yelp advertising. Terrific first month but not a lot of details behind that yet.

You next question is from Jordan Monahan with Morgan Stanley.

Actually 2, maybe for Geoff or Rob. The first one is I think actually, Jeremy, at the beginning of the call, you mentioned closing the loop and we've heard more about that from some of your competitors recently as well. So it seems to be an area of focus but I'm wondering, when we think about restaurants in particular just given it's a fairly large part of your engagement, how big do you think that opportunity is and what are the pieces that you need to put in place in order to realize the opportunity and once those are in place, are you thinking about that as a potential take-rate-type opportunity or some other way? And then just one quick question on competition. I know it was asked earlier but Google has changed yet again, the name of their local program and it's now called, I think, City Experts and they seem to be fairly aggressive in marketing it and offering cash rewards and so on. So I'm just curious if in the month or so that they've been doing that, if you've seen any impact at all rather than some of the prior efforts that they've made?

Thanks for your questions, Jordan. So I will start with the first part of that question, which is opportunity around restaurant food and nightlife. Some numbers that we pulled in earlier times suggested there about 1 million businesses on Yelp that are in those categories. So certainly, as we look across the platform our partnership with OpenTable, the SeatMe product and a variety of other products that we may not have thought of yet, our goal is to provide transaction capabilities and every kind of advertising product due to that whole suite of prospective advertisers in the years to come. We know the consumers are finding restaurant food and nightlife locations every day on Yelp and certainly our goal is to just make that experience more seamless for consumers, as well as for the business owners themselves. So as to the question about how do we get there, as many of the things you know, we're already working on bringing platform to more partners, as well as more restaurants within those partnerships, getting the SeatMe product integrated and then out to market to both existing Yelp advertisers, as well as perspective future advertising. And then beginning or continuing to chip away with products like the Call to Action product and more features for the business owners to use in their dashboard.

And this is Jeremy on the Google question about City Experts. Certainly, we've seen Google paying very close attention to what we do and attempting to replicate the various aspects of what we do, whether it's on the community side. I mean, it was not too many years ago that they had a community manager program, which they eventually wound down. City Experts looks a lot like that. I mean, we had a question a little bit earlier about ads that use review snippets and I think that was actually the change to Google's privacy policy or Google+ privacy policy was so that they could replicate that or try to replicate that. So I mean, I think, it's obviously a good thing that we're the reference point when it comes to success in local but I think the history -- the 8-year history of competition suggests that the subtler things that we do, the playbook that we have is quite unique and extremely difficult to replicate. And so with Google's latest effort, I don't really worry too much that it's suddenly makes Google a fun destination where people want to volunteer a lot of their time to writing really high-quality reviews in 111 different markets across the world.

The next question is from James Cakmak with Telsey Advisory Group.

Jeremy, at the beginning of the call, you mentioned that Yelp is increasingly becoming a globally recognized brand. So -- and your strategy is certainly playing out. So at this point, as you think about increased financial flexibility in the capital structure, where do you see potential voids and where we could potentially see areas of investment to round out services? And then secondly, on the transaction side and all your efforts there, how do you guys think about the feedback loop and actually tracking the experience of the transaction for the consumer or is it something that's just limited to reviews?

Yes. So as we think about international, I think, for us, it's really about, as we have more and more high-quality content, the stuff that we're known for, obviously, domestically, it naturally gets organic exposure. And so there's basically a positive feedback loop that happens and has happened again and again, which is if you have a community that generate incredible rich content that other people happen to be looking for, be it through search engines or by downloading our mobile app and ultimately, some of those people decide to become contributors and create even more content. And so the brand kind of sneaks up on you. It was a good 5 or 6 years before people in New York suddenly woke up one day and said, oh, Yelp is the place I turn to for trusted recommendations. And so I think that phenomenon is going on in Europe right now and it just takes a number of years. And so depending on the age of the market, you'll have variable brand strength there. But the playbook is working. And I think as you can see through content growth and traffic growth, we're getting there.

I think there was also another part of your question that was are we looking at other forms of contribution outside of reviews. I think the short answer to that is we're certainly always evaluating and looking at new ways that our community members could contribute and participate on Yelp. Right now, the review and photos are the primary ways that people do contribute on Yelp but there are a variety of others, some of them on herald, like lists and talk after ads and things of that nature. So you can imagine that there'll be other things we'll experiment with in the future, too. For now, though, I think it's fair to assume that reviews and those high-quality reviews that we've talked about are going to be the focus.

Your next question comes from Kerry Rice with Needham and Company. Shawn Rassouli - Needham & Company, LLC, Research Division: This is Shawn Rassouli for Kerry Rice. I was wondering if you could provide some color on advertisers leveraging the cost per click offering. I'm just curious to see if there are any specific traits you can call out maybe in terms of the size of these advertisers or maybe the verticals or is it pretty consistent across the base. And also, as an add-on, if I may, could you also give us a sense for what portion of these advertisers are also subscribed to the packages that you sell and are spending incremental dollars through the CPC self-serve platform.

It's Rob. I'll take a crack at that. So in terms of -- I've kind of look at -- there's kind of 2 pieces, there's the local ad business that is purchased by small local businesses and generally, they actually buy the subscription based products. Some, you can definitely see some buying the CPC product more of a self-serve or potentially a packaged bundle of product but we're also seeing a lot of regional and national players take advantage to your point and leveraging our products, our CPC bundle package. So what they're doing is they're buying kind of a set amount every month in terms of the CPC. They're also buying an enhanced profile for each of their business location pages. And so I think they're getting enormous value from that. We've definitely seen a number of larger advertisers see significant increases. I know one consumer retail outlet that's nationwide, saw about an 75%, 80% increase in user views in calls for direction, there was a large hotel chain that saw about a 300% or 400% increase in calls, in directions from utilizing the Call to Action, as well as the CPC product. So I think there's different players in the market and we're trying to put together products that serve each of them independently so that they can buy what it is they want. So we're pretty happy with that. I think that was your question.

At this time, I'd like to turn the call back to management for closing remarks.

Thanks, everyone, for joining us on our Q3 earnings call. We look forward to reporting Q4 in early part of next year. Thanks.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.