Yelp launches Yelp Deals in Chicago, Groupon’s hometown

Today Yelp, the social network for local business reviews, launched its first Yelp Deal in Chicago. The deal, which was $50 worth of food and drink at La Ciudad for a cost of $25, was emailed to Yelp members in the Chicago area. Chicago is home to Groupon, the deal-of-the-day website that is now reportedly valued at $15 billion.

Yelp Deals first launched on the West Coast four months ago and is now available in several cities, including San Francisco, Los Angeles , Boston and New York.  More than 40,000 Yelp Deals have been sold, says Dylan Swift, general manager of Yelp Deals.

Unlike Groupon, a small business can run a Yelp Deal only if is selected by Yelp. “We don’t share the exact criteria for how a business is chosen to run a Yelp Deal,” Swift says. “We look for and invite the best local businesses.”

All businesses selected for Yelp Deals already have Yelp profiles and are highly rated by Yelp members. Once a local business is selected to run a Yelp Deal, Yelp works with the business to decide what specifically the deal is.

Could Yelp Deals be the Groupon killer? We don’t think so, and Swift himself says, “The pie is going to be so large that there’s going to be room for several businesses to be successful employing this model.”

Then again, Yelp isn’t going after the “coupon clippers” that Groupon targets.

Says Swift, “Our members have joined the Yelp community because they want to share expereinces with great local businesses. We are identifying great local businesses that our members may not have experienced and are giving them a great excuse to try those businesses while offering them a tremendous deal.”

The Yelp Deal does makes sense for businesses that  have a strong reputation and want to attract new customers who are passionate about supporting the local community. Businesses that are interested in offering their own Yelp Deals can contact Yelp directly via email at yelpdeals@yelp.com.