• AP, Friday, March 2, 2012 12:07 PM

Though not uncommon for flashy tech startups, Yelp saw its stock soar in first-day trading on Friday. “The online reviews site's IPO priced above its targeted range of $12 to $14 per share,” The Associated Press reports. “That already suggested strong investor demand for a slice of the 8-year-old online reviews site, which has yet to turn a profit.” Yelp’s IPO price valued the company at $900 million. By Friday afternoon, aggressive trading had shot it value up to about $1.49 billion.

“Such a big first-day jump is common for high-profile Internet companies such as Yelp,” AP notes. Most recently, LinkedIn stock nearly tripled on its first trading day, reaching as high as $122.70 after pricing at $45. All the same, analysts are confident in Yelp’s unique market position. "Yelp's active community of users writing reviews of local businesses is difficult to replicate," Morningstar analyst Rick Summer told AP. "Unfortunately, the company faces challenges translating the small advertising budgets of local businesses into profitability, as about 70 percent of ad revenues are eaten up by sales and marketing expenses."

In 2011, Yelp recorded revenue of $83.3 million -- up 74% from 2010. Yet, it still had a net loss of $16.7 million last year and $9.6 million in 2010.

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