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Yelp Sees Slower User Growth; Shares Down

The trend in visitor numbers overshadowed better-than-expected quarterly results.

Yelp, operator of the consumer review website, reported slower growth among users as well as business customers in the fourth quarter, sending its shares down more than 10 percent in extended trading.

Growth in average monthly unique visitors slowed to 13 percent from 39 percent a year earlier, while total unique visitors fell for the first time on a quarter-over-quarter basis.

The weakness in visitor numbers overshadowed better-than-expected quarterly results and fueled concerns about the company’s growth prospects in the United States, its biggest market.

Yelp has been facing maturing growth in the United States and has stepped up efforts to expand in international markets. At present, only 3 percent of sales come from overseas businesses.

Yelp said on a conference call that it expanded into 25 countries in 2014. As of Dec. 2013, Yelp was present in 56 international markets.

To sustain growth, Yelp has also diversified into other businesses such as restaurant bookings, event management and payments.

The company reported net income of $32.7 million, or 42 cents per share, for the fourth quarter ended Dec. 31, compared with a loss of $2.1 million, or three cents per share, a year earlier. On an adjusted basis it earned 24 cents. Revenue rose 56 percent to $109.9 million. Analysts on average had expected a profit of seven cents per share on revenue of $108.4 million.

Yelp’s shares were trading at $50.80 in post-market trading after closing at $57.47 on the New York Stock Exchange on Thursday.

(Reporting By Lehar Maan in Bengaluru; Editing by Robin Paxton and Saumyadeb Chakrabarty)

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