Welcome to the Yelp Q4 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 fourth quarter and fiscal year 2013 earnings conference 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. And with that, I will turn the call over to Jeremy.

Thanks, Wendy, and welcome, everyone. 2013 was a phenomenal year for Yelp highlighted by strong performance across all of our core metrics and accelerated revenue growth of 69% year-over-year. A year ago we introduced three key themes that would be the focus of our business. We made significant progress in all three in 2013. We improved the mobile experience by rolling out new features for both contributors and consumers. We expanded internationally focusing specifically on Europe with the Qype integration as we became more of a global brand. And we introduced new tools to close the loop with business owners that helped demonstrate the value they are already getting from Yelp. Even with the tremendous progress we have made we're still just scratching the surface of the enormous local opportunity. Each year we get closer to achieving our goal of becoming the de-facto local search engine for the world and we expect more progress along this line in 2014. As smartphone and tablet usage continues to skyrocket, we place special emphasis on becoming platform agnostic so that consumers can get the same great experience on Yelp on a range of different devices. With this goal in mind, we released a number of new mobile features and functionality in 2013 most notably the ability to post reviews. In the fourth quarter 1.1 million reviews or 30% of new reviews were posted on mobile. In Q4, we also launched a preloaded app for the Kindle Fire and began powering local search for the Kindle platform adding yet another way for consumers to access Yelp content. With 47% of ad impression shown on mobile and a majority of searches coming from mobile it’s clear that our initiatives had been successful as consumers use Yelp to find great local businesses wherever they are and…

Thanks, Jeremy. As Jeremy mentioned we had a great year. Please note that we have posted a few slides on our Investor Relations webpage that accompany the financial portion of the webcast. Let me start with the financial results. We achieved stellar results in all of our key metrics with both revenue and adjusted EBITDA ahead of our guidance. In the fourth quarter, revenue grew 72% year-over-year to $70.7 million, an acceleration over the prior quarter's growth rate. For the full year, revenue grew 69% to $233 million, an acceleration over last year when revenue grew 65%. Adjusted EBITDA was $10.4 million in the fourth quarter and $29.4 million for the year, more than a six-fold increase over last year. Moving on to the key operating metrics for the quarter. Cumulative reviews grew 47% year-over-year to approximately $52.8 million as we added about 5.4 million reviews in the quarter. Approximately 1.8 million of these reviews added in the quarter came from the integration of the Qype Germany site. Excluding these Qype reviews, the growth rate was 42%. [Claim] [ph] local businesses was 1.5 million, up 50% year-over-year and active local business accounts grew 69% year-over-year to approximately 67,200. Approximately 2200 of the active local business accounts added in the quarter came from the Qype Germany integration. Excluding advertisers from Qype Germany year-over-year growth in active local business accounts still accelerated to 64%. Our average monthly unique visitors grew 39% year-over-year to roughly 120 million. We had approximately 53 million mobile unique visitors, 60% increase over the last year which includes 42.3 million mobile web users and 10.6 million through the app. These financial results and operating metrics demonstrate that our [playbook] [ph] continues to deliver growth across the Yelp market. To provide some additional color, let me run down the…

(Operator Instructions). First question comes from Mark Mahaney with RBC Capital Markets. Please go ahead.

I just want to ask you a question about the local advertising revenue growth. If you look at the cohorts and this cohort [inaudible] is extremely useful, you see this acceleration in three cohorts that you traditionally outlined and yet the overall growth rate accelerated a little bit not a lot, but is there a read in there that the more recent cohorts the 11, 12 cohorts, we start to see a fall off and spend there or a material part in the growth of spend there? Anyway you can reconcile it looks like a fair acceleration in the older cohorts with a little bit of deceleration overall? Thank you.

Hey Mark, this is Rob. Thanks for your question. When I look at the cohorts we feel pretty good about it, I mean the first and third cohort actually accelerated. In the fourth quarter, the first cohort was 62% revenue growth, the third cohort 2009-2010 cohort was a 101%. I think that 2007, 2008 cohorts was 74% which had matched Q3 growth rate. So in terms of overall, I think what how we see it is it's still growing at a fairly rapid rate and at the end of the day, we feel like we are pretty under penetrated in the particular market. So I think we feel pretty good. Right now, the second quarter is generating about $1.1 million on a quarterly basis which obviously on an annualized basis is pretty robust.

The next question is from Brian Fitzgerald with Jefferies. Please go ahead.

Hey, guys, it’s Sachin sitting in for Brian. Question on the SeatMe acquisition, so can you guys give us an update on the kind of the monetization efforts there? How competitive of a space is it, and do you kind of primarily -- are you primarily marketing - starting your efforts with existing advertisers?

Hi, this is Geoff, thanks for your question. SeatMe today has about 400 restaurant customers but still obviously a very nascent effort for us. We just completed the consumer side integration over the last couple of months. Today it’s being sold by a small part of our inside sales team here at Yelp. Our intention is to continue to sort of experiment with that go-to market strategy over the coming months and hopefully to bring it out to a larger part of our sales force relatively soon. As to the overall market, certainly it's a competitive marketplace. We are offering SeatMe to current Yelp advertisers but as well as the roughly 1.5 million businesses that are claimed on Yelp too. So it gives us a pretty good pool to begin to fish in.

Next question is from Youssef Squali of Cantor Fitzgerald. Please go ahead.

Congrats on a very nice quarter. Can you talk about 2014 operating leverage and maybe just talk about the increase in revenues versus the increase in operating expenses? It looks like at the midpoint your EBITDA margin is about 15.7%, which is great, nice improvement from 2013 but certainly not the type of leverage we saw from 2012 to 2013. so just trying to figure out is there a pause to the leverage that you're seeing in the model or you're just trying to be on the conservative side since it's a brand new year?

Thanks, Youssef, it's Rob. The way we're looking at it is we've got a ton of opportunity that is in the marketplace and we want to go and capture that. So as we see it we see that yes, we're experiencing great growth, so we want to continue to invest in that great growth and we want to hire some more sales people, we want to invest in technology and maybe even a little bit of marketing spend for experimental purposes. So we see a great opportunity ahead of us and we feel like now is the time to put the pedal to the metal on that.

Next question is from Heath Terry with Goldman Sachs.

Wondering if you could give us a sense of what kind of traction you're seeing with the platform relationships whether Mind Body and Constant Contact that you signed last year? And to what degree you see there sort of being additional services or opportunities to add to those relationships in the coming year?

This is Jeremy. So we're really thrilled with how Platform's been going right now. We've got e24 and delivery.com live, and as I mentioned earlier, we're seeing 10,000 orders per week, and so really nice performance there closing out transaction. We have announced a handful of partners that we hope to have live very soon. And there is a long list there, there is quite a backlog of folks that are interested in other verticals that would like to work with Platform. So we see this as a big build out year for that part of the service and really excited about it overall.

Next question is from Kaizad Gotla with JPMorgan.

Your retention rates have been hovering in the 70 or so percent range for a few quarters now and I was wondering if retention is going to be more of a focus going forward. Maybe you can just talk about sort of the top few reasons why merchants discontinue advertising on Yelp? And then separately, I think you said international was 4% of revenue in this quarter. I think that's down from 5% last couple of quarters, anything you can call out there? Thanks.

Hi, thanks for your question. This is Geoff and I'm going to start with the first part of your question around retention. And you're right that our repeat rate has been kind of hovering in the same range for quite a while. It's relatively stable metric or has been historically. Will retention become a bigger focus for us in the future? Certainly although we're still in such early days that acquisition is going to be the primary focus of our efforts for probably some long time to come now. With 60,000-odd accounts and the notion of tens of millions of prospective advertiser accounts we feel like we're very much still getting started. So absolutely we're experimenting with a variety of different things on account management and retention and we want to make sure our advertisers have a great experience and still the focus is probably going to remain on acquisitions for quite a while. I think Rob will answer the second part of your question.

Yes. So international revenue was about 4% of sales or about $2.6 million in the fourth quarter. As we planned there was a migration of content as well as about 2200 advertisers from Qype Germany to kind of what we call the cleaner Yelp user experience given what Qype look like. And the cleaner Yelp UI has a lot fewer ad placement. So that impacted that. We feel really good about our traction in Europe. International revenue in 2013 was up about 250% year-over-year, and if you look at Yelp International revenue in Q4 stripping out Qype that was up about 275% year-on-year. So we feel like we are going into 2014 with a pretty strong plate.

Our next question is from Jason Helfstein with Oppenheimer & Company. Jason Helfstein - Oppenheimer & Company: So can you go into a little bit more details just about the comment about perhaps testing some advertising? I think this should be the first time you guys will be doing that. And then when you think about $400 million or so cash you now have and kind of the lots of different opportunities you can go to spend that. Any desire to get directly into, let’s say I don’t know, a company like PostMe, right, which does kind of the logistical part of it. So when you think about your platform, do you want to stay kind of agnostic in a very high level and partner with a company like that, using PostMe just as an example, or is that technology that wouldn’t make sense for you to own over time? Thanks.

Hey, Jason, it’s Geoff. I will start with the first part of your question around the ad. Yes, I think Rob mentioned on the ad reflects a blog post that are -- he put out couple of weeks ago. We have been experimenting with some new outdoor ads in a couple of markets. In many ways this is really consistent with the way we've approached advertising since really I started here years ago. And that is more constantly experimenting with different platform ads formats both business owners and consumers. It hasn't been a primary driver of traffic for our business ever and we don’t expected to be in the near term more a primary driver of expense. But it is something we are experimenting within a few different markets now and if it works well we'll (inaudible). And then Rob, do you want to answer the question on the cash?

Yes. So as part of cash, I mean, we did the raise the additional monies in Q4 and the way we are looking at it right now, if there is an opportunity that comes along, it make sense, we'll do something and it gives us a lot of financial flexibility. That said, from a platform standpoint which I think was your specific question, we've chosen in those cases to partner with a bunch of different companies out there that are -- have expertise in there particular vertical. So we will see how that goes. And if there is opportunity there, we can obviously take advantage of it.

Next question is from Kevin Kopelman with Cowen & Company. Kevin Kopelman - Cowen & Company: Just want to ask about mobile app users. It was down q-over-q, is that, three things about that being seasonal and was that a tough comp with the Apple maps occurring last year? And then how do you think about mobile app users as a kind of percentage to total going forward? Thanks.

Yes, this is Jeremy. So if you take a look at the mobile unique visitors number, you can see that it’s actually 53 million on a monthly average basis which represents 60% year-over-year growth. And what you will find is that users can tap into content wherever they are, whether it’s within an app or we have a great mobile website that had virtually the same experience or iPad or so forth. And so wherever a user wants to get our content, we are happy to provide it. And the growth that we are seeing overall with mobile unique is quite strong and we are happy with that.

Next question is from Jordan Monahan with Morgan Stanley.

Actually one, maybe two questions, one just a follow-up on the prior question from Kevin. Is your visibility for some reason improving in Google search results on mobile and is that potentially one other reasons why you are seeing a lot of traction on mobile web relative to mobile app? And then just a question around pricing, so I think over the last five quarters, your revenue per business account has come up, but I think you held your nominal process about the same. Is that just a function of market maturing and businesses wanting to buy more leads in more mature markets or is there another factor there?

First on the mobile web question, we are seeing great performance of our content on mobile web and so I don’t know if there is a massive shift there. But certainly as more users have turned to mobile web, they are finding our content and we are getting a lot of traffic there.

Hey, Jordan. It’s Rob. As far as pricing, as you said we really haven't changed our pricing structure. I think what’s really driving that was, we were picking up international revenue from Qype. Yet, as we have mentioned at the time, we weren’t including the numbers of advertisers in the active local business accounts because they counted it differently. Now that we have that information and it’s on the Yelp platform, in Q4 we added about 2200 German advertisers. So I think what you will see is, if you kind of do it year-over-year comparison and take out the Qype revenue, it’s about the same. So on a -- I know we don’t really look at ARPU or those types of metrics because it’s not meaningful to us. Our sales force comps really on a total dollar amount, but if you do use our math its on a comparable basis, it’s pretty even.

The next question is from Tom White with Macquarie. Please go ahead.

Its around platform in your strategy there, so Yelp Platform obviously provide you guys some e-commerce revenue but am I correct in thinking still that the primary objective there is to help draw more merchant adoption of your core ad platform, and are there any maybe metrics you can share about local merchants who maybe have participated in the platform initiatives and also being purchasers of advertising? And I'm just curious if that contributed all to the acceleration we saw on active local accounts in the quarter expenses-Qype? Thanks.

Sure, this is Jeremy. Platform has been going particularly well. Our focus there really starts with the consumer. Obviously, there is really great data that we are able to generate as transactions are closed on the site that we can then pass to business owners, but I guess where your question is going like is this really having an impact on our sales like, I don't think that's the case right now. I think Platform is still just in its early days of build out, but the growth that we are seeing is really nice. I think previously we had said we were getting something like a few thousand orders per week now, where we said we're getting north of 10,000 orders per week. And so it's really working for the partners that we got and we got a really great line up of additional partners that will be rolling out over the course of the year.

Next question is from Lloyd Walmsley with Deutsche Bank.

A couple if I can. First just looking at the net new active business accounts in the quarter, it look like a nice step up even expenses-Qype. Can you just talk about really what was driving that? And it looks like on a sale force efficiency front you're seeing a lot lower sales in marketing spend for net new account. So curious what's driving that. And then on the Yelp Platform e-commerce user behavior, are you seeing a lot of repeat usage from people once they try it, are they coming back and using it and using it across in a different providers there?

Hi, this is Geoff. I will try to take the first for your question there around I think it was local advertisers this quarter. Certainly, we're happy with that overall number the net ad of 10,000 it looks really great. And I think there are number of factors there. One is addition of the Qype advertiser that Rob mentioned earlier, and so that's and certainly a onetime event. Beyond that we have seen a couple of other factors: one sales force has been performing tremendously well and just had a blow out quarter. The other factor is some of our self serve products have also gone really nicely. Self servicing PC advertising in particular has added some portion of the new accounts too. So you're really seeing kind of an addition of all three of these factors kind of working together, and hopefully this trend will continue with the exception of the Qype one-time.

This s Jeremy. On your question around platform and in repeat usage, we definitely are seeing quite a bit of repeat usage. I don't have the specific stat in front of me right now. But when we looked at that it was quite high.

Next question is from Ronald Josey with JMP Securities.

So Geoff, I want to follow up quickly on your CBC comment how that in new accounts and doing well. I think historically you said that that product was more from more advanced type of marketers. I'm wondering if you are seeing a broader traction there. And then for Jeremy, I want to get your thoughts or see if you see anything in terms of reviews or overall engagement given some of the court hearings around defamation and things like that on the Yelp. Thank you.

Sure, so to the question on CBC advertising self serve in particular, overall I think my historical comment there probably still hold which is to say that's self serve contingent is tends to be a more advanced user, somebody who is comfortable self-provisioning Internet advertising and wants to manage their budget themselves. What we do see in the overall market is still that the majority of local business owners would prefer to talk somebody on the phone and be handheld through it and really kind of be in more set it and forget it mode. I expected that split will hold for a number of years yet to come and, that having been said, we want to offer both avenues in order to work with Yelp.

And on the question around some of the legal cases that's been making headlines, we can do see great user engagement. We do everything we can to obviously protect briefly free speech online. The number of cases that we see given our size is extremely rare, and they just don't impact our business.

Next question is from Blake Harper with Wunderlich Securities.

Jeff, I think you talked about the sales productivity, but could you just maybe offer some more details there of how your sales productivity trends is since you seem to look at that more than like an ARPU number to drive the business and then what you would think of going forward as far as the hiring and what productivity could be for some of those looking forward to 2014?

Hey Blake, it's Rob. Maybe I will help and then if Geoff wants to add some color that would be great. In terms of sales productivity, we have seen a slight increase over the last year. So I think there is a multitude of reasons why that it is, maybe brand ubiquity, perhaps businesses they are actually seeing obviously the fruits of our labor and the consumers that are come in site contribute ROI. So there's probably a number of reasons, but we've been in the market specifically in the U.S. for a while now and people are, we are not having a conversation exactly what is Yelp. So that I think helping. So in terms of practically we are seeing an increase. We also have increased our sales force slight up 50% year-over-year. So we have many more sales people I think at the end of 12/31 we ended at around 2000 employees and we had about 60% of those in sales now. So obviously that's the big increase over the last couple of years and then reach out for business and helping them understand what Yelp is and what they can do for their business.

Next question is from Eric Sheridan with UBS

Two questions, one, when you look out to the guidance for 2014, I want to see if we could drill down a little bit more on and on how much expectation is around international growth versus domestic growth. So we might see the percentage of international revenue is the percentage of the total move up as we move to 2014. And second question which is a bigger picture question on pricing. Given how many people are chasing after the local advertising opportunity, what's the likelihood you test various other formats or price points around pricing maybe variable pricing longer term to expand the term? Thank you.

Eric, so I'll take the guidance question, maybe Geoff will help us out on the pricing. In terms of guidance the way we are looking at it interestingly not to be mean obviously the domestic market represents quite a bit 96% of our revenue, it's growing at an incredibly fast clip and then local revenue grew up 71% year-on-year, which obviously most of that is domestic. So the way I kind of probably think about it is that international is growing and it's growing fairly rapidly, but I think as a percentage of the total its probably in line with how it has been trending over the last year 4% to 5% at the end of the day. So but we are excited about the opportunity; we think that international will be potentially very large for us, but given where we're at our lifecycle domestic is growing at such a rapid rate and it's almost existing especially from the a side standpoint in [inaudible].

And as to the question about pricing, we continue to experiment very regularly with all kinds of different pricing formats. You did mentioned variable pricing in there and I should point out that our CPC product today is already auction based so there is a dynamic pricing component going into that all the time. But yes, we continue to sort of experiment with new ad formats and price formats and I think we can expect that to continue to do for the coming years.

Next question is from Stephen Ju with Credit Suisse. Please go ahead.

So Jeremy, you probably saw Google roll out app indexing which can push users directly into the relevant content on the native app. So do you think the slow traffic will be something you will accept and implement? And also make sure you close the major jab in terms of the mobile app functionality with reviews, but there is still feature like events and messages, which are still not yet available. Are these important and well used functionality on a desktop at all?

Sure. Thanks for the question, Steven. So I think what you are talking about is when there is links showing up in Google, you can specific on Android you have people open up the apps as they have it. I know that is something that we are looking at and I think that’s a nice feature. So I can imagine we will be rolling that out. And on the functionality side, one of the things I mentioned previously or a little bit earlier in this call was continuing to build out feature particularly for the community on mobile is one of the priorities for this year. And so you can expect to see some of the things that you mentioned rolling out pretty soon. We are focused on bringing all of the functionality of the desktop web to mobile, we just kind of knocking through our priorities. So we have more to come on this year on that.

Next question is from Neil Doshi with CRT Capital.

Good afternoon. This is actually Rob on the call for Neil. Just wondering if you can give us some little more color on the strong display performance in the quarter. And then also given the easier comps that you've had for the last couple of quarters and the fact that may change going next year can you give us a little sense of how seasonality should play out into 2014 as well? Thank you.

I think, the way -- its Rob. The way we are looking at it is, our priority continues to be on local revenue. And it’s such a huge opportunity. We want to make sure we are capturing a lot of local ad dollars. That being said, the brand and advertising team I think did a great job in 2013. And we'll continuing to obviously sell in that area. We feel good about where we are with that team, kind of the other part of that is that they expect a seasonal decline in Q2. So Q4 was particularly strong for that team. But obviously, its seasonality that contributing to that. So Q1 we'll probably seen seasonal decline. Q2 and Q3 as kind of last year fairly flat and then they will be obviously a little bit of tick up in Q4. If I was modeling it out, it'd probably be somewhere around 10% in 2014 and brand versus 2014 because as I said I think our focus really going to be on the local revenue line item.

Next question is from Kerry Rice with Needham & Company. Kerry Rice, your line is now open. We will go to the next question from Shawn Milne with Janney Capital Markets.

I know its been asked a couple of times but, Rob, if you could go back to just the change in net local accounts made a dent sequentially into Q3 and then of course we get the rebound even next the Qype addition. Was there any change in sales force compensation plans or anything else there that you could call out that created that dynamic? Thanks.

Hi. This is Geoff. I'll answer your question there. The short version is that the mix of local advertisers are changing all time. No, we didn’t make any material changes to sales force growth or compensation. Those guys are continuing to do their thing and do it really well. Sort of within that local advertiser number and the net number that you are looking at, there is a mix of the self-serve accounts that are showing up in CPCs, there are folks who are selling Yelp deals on Yelp. And then there is of course the individual advertisers who are going out and selling through the sales team. So that mix probably changed a bit from quarter-to-quarter. But I don’t think anything materially changed in trend.

Next question is from Gene Munster with Piper Jaffray.

And just kind of getting back to deeper in the transaction, can you remind us just to high level how you see that or different features whether its integration with other third parties starting to impact the model? Is it just to continue to drive ad revenue or could they be kind of separate businesses in themselves or separate add on products? Thanks.

Hi. This is Geoff again. Yes, in the particular product area that you are talking about I believe which is Yelp Platform and our relationship with OpenTable and then now SeatMe as well. When we offered those product that's really all kind of part of a concerted effort to help close the loop between consumers and local businesses and how that happen right on Yelp. We think when that happens whether you make a reservation or you buy a product directly through the Yelp site, it actually just makes your overall consumer experience on Yelp better. And then, of course, is that data we can share back with the business owner to help him understand exactly who is he transacting at their business, when on the Yelp platform. So the more we can bring consumers and businesses owners directly together on the Yelp platforms, we think the better off we are. Now to the kind of downturn -- downstream effects of -- can be monetize those transactions and/or can we up sell those businesses into advertising, we think so in the medium to long term. But that’s definitely not the shorter ones.

Next question is from Sameet Sinha with B. Riley.

Couple of questions here. So I’m just looking at the unique visitor number quarter-over-quarter, it seemed like they could increase about 2.6 million while international unique visitors increased about 4 million. Does that imply that domestically business dropped quarter-over-quarter? And maybe it’s the seasonality. And secondly, what would the diluted share base be if you had in options?

Hi Sameet, it’s Rob. So on a unique visitor basis we're at about 120 million. We did add Germany at the beginning of, for international at the beginning of November. That obviously had an impact on the numbers. We're not seeing any trends that we'd be concerned about. I think year-over-year it’s up fairly dramatically. It's 39% year-over-year so, and domestically it is growing year-over-year. so obviously with the addition of Qype property international is growing at quite a rapid rate. With regard to question about diluted share, so on an option basis we would expect that anywhere between 8 million and 9 million shares would probably be needed to add back to our share count through accounts or any dilution if we had positive net income.

Next question is from James Cakmak with Telsey Advisory Group. Please go ahead.

So I guess continuing with the theme of the Yelp Platform, its certainly ramping up nicely with your first efforts on the full vertical and I know you mentioned multiple partners there and with many on the backlog as well. So the question is how should we think how seamless this is to roll out, the integrate and roll out transaction features in the categories now that you have the experience and food? Now is it something that's going to as easy as flipping on a switch or how best to think about the timing of the roll out of the -- from a technological standpoint of the other categories later this year? And then I guess quickly on international, you're already in 24 countries and to try to reconcile that investments this year, how much of those efforts would you say are geared toward expanding existing versus entering new market? And then any thoughts you have on some of the larger market opportunities perhaps in APAC or Russia? Thank you.

So I'll pick the platform fees. We have a lot of times trying to design platforms so that we can onboard different partners relatively easily and handle a number of them onboarding it at the same time. there is a bit of extra work as we move from vertical to vertical but adding individual partners to a vertical that we've already launched, in this case for instance food delivery isn't actually a whole lot of extra work. So I think as we do some of the heavy lifting this year it will become easier and easier for us to onboard partners and work through our backlog.

As to your question about international expansion, at the high level our ambition is to bring Yelp to the world. We think that consumer benefit have been to able to find great local businesses really translate across every country and culture. So over time, that's our goal. Now as to any sort of specific markets, you mentioned APAC in specific and I think we all understand that some of these markets are going to be a lot more complex than others. So not necessarily anything kind of big to report here now. And then in terms of overall dollars of investments, I think its fair to say that while we continue to invest in international in 2014 in terms of our overall level of investments still the bulk is going to be domestic as so much of what we do is hiring incremental sales people and engineers here in the U.S.

Our next question is from Darren Aftahi with Northland Securities.

Just a couple. It looks like product development grew pretty close to revenue growth in the fourth quarter. Just kind of piggy backing on Jeremy's comments about extending the community features on desktops and mobile, where else will you be investing, and then just as a follow up, what was the home and local as a percentage of vertical total revenue? Thanks.

As far as product development, I touched on a big push for us which would be some of these community features feeding the source of all of our great content. And then there's also that Geoff touched quite a bit of international expansion that we plan to do. So those are kind of the big buckets. There's also continued oration on the advertiser side and building out features that help us close the loop with local businesses and our advertisers giving them more information and helping them understanding the value that Yelp provides.

Hi Darren. On the home and local its Q4 2013 is about 24% of local revenue versus about 22% for 2012, and then a roundup for the top 5, its restaurants at 16% in Q4 2013, beauty & fitness at 14%, health at 11% and shopping at 10%.

Next question is from Chris Merwin with Barclays.

So a couple of questions. First, after you've rolled out a lot of these closing the loop products, is there anything that you can tell us about the ROI that merchants are getting by becoming paying advertisers now that you have more data behind that? I mean, are there certain categories in local that have higher ROI than others, and what in your opinion is that category that you think is the biggest opportunity to improve your penetration of pay accounts? And then as it relates to mobile, would you mind updating us on what percentage of queries in app as opposed to mobile web? And is it a focus of yours to try to migrate more traffic into the app to maybe reduce some of the traffic that you get from other sources? Thanks.

Hi, its Geoff, I'll take the first part of your question there. You asked about ROI on these close the loop features. We, at the beginning of last year, did a study PCG wherein we showed that Yelp advertisers generate an average of $23,000 in revenue from Yelp relative to $8,000 for those who can just claim their free accounts on Yelp. So that's kind of a helpful starting point. We haven't redone that survey in the last year. I think probably be helpful to go back and do that again at some point. Internal data and metrics are certainly positive in terms of the ROI that we see for a typical advertiser on Yelp but I don't have any new numbers for you there. I think there certainly is opportunities that continue to both generate more ROI as well as help advertisers better understand that ROI across all categories. One of the ones I've always been excited about is restaurants just because we do have so much consumer traffic there, and that's the focus on restaurants into the Platform metric of food delivery as well as the acquisitions of SeatMe which helped us offer reservation there. Jeremy, I don't know if you want to talk about the app for some of the lab or Rob.

I'll just mention give out a few of the numbers that we've given out in the past. So on the percentage of searches that have come from mobile is up 59% and then there's about 46% of searches that came from the app versus about 13% of searches that come from the mobile web. And then just to put this number out we had about 47% of ad impressions were served on the mobile in Q4, and that's about 90% year-over-year increase.

Our next question is from Todd Wensley with First Analysis.

Just curios how interesting you find the evolution is in the payment space in terms of helping you kind of build out what you're doing with Yelp Platform. We see a lot of activity, a lot of different companies doing some interesting things. Just curious as to how interesting you find what's going on in that space. Thanks.

We're certainly monitoring all the different things that are happening in mobile payment and I think we'll continue to consider any ways to make the experience from a user perspective even smoother and more seamless. But the current implementation seems to be working quite well for us and we're seeing really nice growth, so we're happy with that. But as the industry continues to develop and there becomes more and more slick ways to pay on mobile we'll certainly look at in bringing those in for app as well.

Thank you. I would now like to turn the call over to management for closing remarks.

Thanks for joining us on our Q4 2013 conference call. We look forward to talking to you next quarter. Thanks.

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