yelp-logoGoogle is in the advanced stages of a bid to acquire Yelp for more than half a billion dollars, according to a report in TechCrunch. The acquisition of the popular review site would advance Google’s position in the local search marketplace considerably, given Yelp’s devoted following in metropolitan areas across the U.S. and deep review content on local businesses. Local search blogger Greg Sterling reports that Yelp is estimated to have 8.5 million reviews.

For several months, Google has been rolling out enhancements to its Google Maps offering, including aggregated reviews from TripAdvisor, Citysearch and other sources. Most recently, Google Maps began integrating more comprehensive business profiles with its Google Favorite Places initiative, and announced in early December that it was distributing 100,000 window decals to popular businesses with a QR code that links back to a Google Maps listing. Seen at the time as a threat to Yelp, which also distributes stickers to local businesses, the strategy now appears to be the first step towards an attempt to assimilate Yelp’s user base and market share.

Several sources are confirming that the two companies are close to finalizing the agreement, with one source giving the deal an 80% chance of closing, TechCrunch says.

Google appears to be pursuing a strategy of acquiring businesses with a stake in the local marketplace. Its acquisition of Admob for $750 million in November gave the search giant access to a popular platform for local advertising on the iPhone.

Yelp has raised $31 million in four rounds of venture financing since the company was founded in 2004, and projects revenue of $50 million in 2010. The site claims to have 25 million monthly unique visitors.

I’ve emailed Google for comment, and will update if I hear back — though Google rarely comments on stories like this until the deal goes through.

Update: The New York Times says its sources are reporting the same thing as TechCrunch’s. Meanwhile, Google sent its boilerplate response: “We’re always talking to various companies about various things, but we don’t comment on rumor or speculation.” Yelp sent us a similar statement.

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