Mobile commerce comes easier than advertising

According to Yelp’s most recent quarterly filing, almost half of all Yelp searches are now made through mobile apps:

Yelp mobile apps were used on approximately 8 million unique mobile devices on a monthly average basis for the third quarter and approximately 45% of all searches are now from our apps. We also redesigned business pages on the app to emphasize user engagement such as photos, tips and check-ins, putting mobile contribution opportunities front and center for the user.

In their initial S-1 filing, Yelp disclosed monthly averages of 61.0M web visitors and 5.0M mobile devices in 3Q11. Since then, Yelp increased monthly unique web visitors 23.0M but mobile’s growth rate of 64% Y/Y far outpaces web’s 38% increase.

The shift from web to mobile bears resemblance to what’s been happening in newspapers, etc. for the past decade. Users move quickly but revenue models cannot adapt at the same rate. The transition for advertising models like Yelp, Google and Facebook has been painful:

Advertisers are not willing to pay as much for mobile ads because they simply are not as effective as ads on a desktop, Gillis said. And the mobile ads that advertisers are buying are a lot cheaper than ads on a desktop, pricing at 56 cents on the dollar, he said.

Compare that to eBay’s turnaround story and recent results:

John J. Donahoe, eBay’s chief executive, attributed the company’s performance in part to an early bet that mobile phones would become a platform for commerce, with PayPal providing a lead in mobile payments.

“We’re the largest mobile commerce and payments provider in the world,” Mr. Donahoe said in an interview on Wednesday. “And we are continuing to innovate. We have a series of innovative apps that people are using. People love shopping on their smartphones and iPad, and PayPal is still the safest way to pay on a mobile phone.”

The rise of mobile commerce is a compelling narrative that counterbalances the negativity around mobile ad models.