Yelp on Wednesday reported a greater-than-expected loss for the fourth quarter as marketing expenditures grew 59 percent even as net revenue rose 65 percent.
After the earnings announcement, the online review site saw its shares fall more than 5 percent in extended-hours trading. (Click here to get the latest quotes for Yelp.)
Yelp reported a fourth-quarter loss of 8 cents a share on revenue of $41.2 million.
Its net loss in the quarter narrowed to $5.3 million, compared with last year's net loss for the period of $9.1 million, or 56 cents a share.
Of Yelp's sharpened focus on mobile, CEO Jeremy Stoppelman told CNBC: "Twenty-five percentof our ads are now showing on mobile. It represents the same type of ads you see on the website. What we have is just more inventory. And on the mobile device it can be location-targeted."
Marketing spending rose from $16 million in the period last year to $25.5 million, as the company pushed for growth in Germany and Britain, according to Yelp's news release.
Analysts had expected the company to report a loss of 5 cents a share on $40 million in revenue, according to a consensus estimate from Thomson Reuters.
For the first quarter, net revenue is expected to be in the range of $44.0 million to $44.5 million, representing growth of 62 percent from the first quarter of 2012.
The site saw its user reviews grow 45 percent year over year to more than 36 million at the end of 2012, while monthly unique visitors grew 31 percent to about 86 million.
Regarding the competitive landscape online, potentially intensified by Facebook's graph search, Stoppelman said, "We have the advantage of being just focused on one thing. The same can't be said for Facebook or Google."