Yelp, which started in 2004 with $1 million investment from Max Levchin, at present claims to attract over 26 million viewers contributing close to 8 million reviews each year. With a sales force of 200 people and $45 million revenue for last fiscal year, Yelp is expected to go profitable in 2010. Yelp offers Google a huge repository of local data covering not just local bars and restaurants, but even dentists and near-by churches.

While Google is expected to face competition from Microsoft and Yahoo for the bid, such acquisition is also expected to rankle Google’s ties with AT&T and other companies which have been selling search ads to local businesses signing up for the Yellow pages.

Critiques however are rating Google’s $500 million valuation of Yelp as a miscalculation of the company’s worth. Questions are also being raised on objectivity of search results with Google itself owning such a service. Also, due to Yelp’s negative image, skeptics are now raising eyebrows towards Google’s ethical standards as well.