Jeremy Stoppleman, the CEO of Yelp, has walked away from an all-but-signed deal to be acquired by Google for more than half a billion dollars.

The deal was, as we wrote late last week, in the later stages of negotiation. The two companies had agreed on a price – around $550 million plus earnouts – and were working through the final details of the acquisition.

Then something happened that made Yelp reconsider the deal. Over the weekend they notified Google that they were not going to sell, say multiple sources.

So what made the deal go sideways? We’re working on that. From the information we’ve gathered, there is currently no other suitor seriously looking at the company. For now Yelp intends to stay independent. We’re betting that someone – Apple, Microsoft, etc. – came to Yelp with an offer for a strategic deal gave Stoppleman the confidence to say no to Google. But who that partner is and what they offered isn’t something we’ve been able to track down.

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After the ongoing rumors concerning another serious acquisition of google, there is still an threat that google will bring mobile internet search and LBS under their control. After reconsidering the deal there seems to be another option for Yelp and it's investors that is even more attractive than an trade sale to google. We're looking forward what will happen next in the exiting space of LBS.

Google 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.

We were waiting for the LBS take off for years. The steep ascent of local niches products and services will begin, finally.

Google and Yelp are in advanced acquisition negotiations, we’ve confirmed from multiple sources. And while the deal isn’t done, we’ve heard that it’s very likely to close. The price is supposedly at least $500 million.

Yelp was founded in 2004 as a way to let users leave reviews on local businesses. Comscore puts worldwide traffic at nearly 9 million monthly unique visitors, and it has been growing fast – the company says it’s real numbers are more like 25 million monthly uniques.

Yelp has whispered that 2009 revenues will be around $30 million and are expecting $50 million or so in 2010.

Yelp last raised venture capital in early 2008 from DAG at a $200 million pre-money valuation, we’ve heard. They’ve raised a total of $31 million over four venture rounds.

On the odds of the deal happening – one source says its 80% likely. Not signed, sealed and delivered, but past the term sheet stage.

Google is building out their own directory of local businesses with its Place Pages, which can be accessed via Google Maps and local search. They are encouraging local businesses to put Google-branded stickers in store windows and recently added their own ratings summaries to business profiles. Yelp, of course, already has all of this data, along with a growing and active audience of consumers who are used to finding (and rating) businesses on Yelp.

For their part, Google is clearly on a shopping spree. They recently acquired AdMob for $750 million, and were in the running on the LaLa acquisition. Expect lots of deals to be announced by them over the next three months.

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