Yelp Inc priced its initial public offering of class A common stock at $15 a share, above the expected price range, valuing the US consumer review website at nearly $900 million. The offering generated $106.5 million in proceeds for the company, which offers online reviews of local businesses and services. Earlier this month, Yelp had said it would sell 7.1 million of the 7.15 million shares in the offering at between $12 and $14 a share. The company, founded by former PayPal engineers Jeremy Stoppelman and Russel Simmons as a start-up idea in a business incubator in 2004, is active in 46 markets in the United States and 25 international markets as of the end of last year. Yelp shares will begin trading on Friday on the New York Stock Exchange under the symbol ‘Yelp’. The stock is expected to see a first-day pop in its price just like peers Groupon and Angie’s List, but concerns persist about its long-term earnings potential and over-dependence on advertising as a revenue generator. The San Francisco-based company has incurred losses since inception, and had an accumulated debt of about $41.2 million as of December 31. While it is known for watching over the health of financial markets and the honesty of publicly traded companies, it is like a massive corporation of its own. It has roughly 3,500 staff scattered across the United States and must maintain information technology systems, leasing operations and other back-office functions. In May 2010, SEC Chairman Mary Schapiro hired the agency’s first-ever chief operating officer, Jeff Heslop, who previously was in charge of information risk management for Capital One Financial. Also, as part of a review required by the 2010 Dodd-Frank financial oversight law, the SEC brought in the Boston Consulting Group to examine SEC operations and structure and issue a report suggesting reforms. The Boston Consulting Group report, which cost the SEC roughly $4.8 million, urged the agency to re-prioritize its activities, reshape the organization, invest in the proper infrastructure and bolster its relationship with self-regulatory organizations. A spokesman for the Boston Consulting Group declined to comment. Now Heslop is overseeing the contract awarded in May 2011 to Booz Allen to oversee the follow-up work to the BCG report, known internally as the “Mission Advancement Program,” or MAP. Although Dodd-Frank did not require the SEC to hire consultants to conduct the follow-up work, it does put the agency under pressure to show progress to Congress every six months. In an interview, Heslop said hiring Booz Allen was essential because the SEC simply did not have the manpower or experts on hand to conduct the follow-up work. “It wasn’t like we had a bench of people we could turn to,” Heslop said. “The only way we could have done it is to pull people off existing roles of conducting enforcement investigations and examinations where they were already choking on the work.” The SEC said the consultants’ unique skills and employment arrangements justify the pay premium - the consultants are being paid on average $140 per hour compared to It is routine for government agencies to seek the expertise of large consulting firms, such as Booz Allen. But some critics have doubts about the project, and they fear the Booz Allen work has ballooned with little oversight or much to show for what has been accomplished so far. “If they’re not careful, agencies can spend billions of taxpayer dollars on outside studies and contractors and have nothing to show for it,” Republican Senator Charles Grassley said in an emailed statement to Reuters. “The SEC appears to be headed down this path in hiring a consultant to implement another consultant’s work. The onus is on the SEC to make sure outside consultants deliver useful products and pull the plug when necessary,” Grassley added. Booz Allen is not only working on the MAP project, but has a handful of other contracts with the SEC. One contract, for instance, involves a review of financial statements by public companies in over-the-counter markets. Another is to help the SEC with business processes associated with the handling of disgorgement and penalties. The Booz Allen work has caught the attention of some investigators in the SEC’s inspector general’s office. According to one person familiar with the matter, investigators there have been asking questions about what kind of work the company is doing and whether it is necessary. Where those inquiries may lead is unclear. A spokesman from Booz Allen Hamilton declined to comment on the inspector general’s inquiries. The SEC’s inspector general’s office also declined to comment. Return on investment A US House appropriations panel is tentatively scheduled to review the SEC’s budget request on March 6. Congress controls the SEC’s budget, although the agency’s expenses are covered by fees it charges companies. The Obama administration has asked Congress to boost the SEC’s $1.321 billion budget by 18.5 per cent for the year ending Sept. 30, 2013. The SEC has said the increase is necessary to help the agency strengthen its enforcement and examination programs. Also in March, the SEC is expected to deliver a report to Congress updating lawmakers on the progress of the internal reforms. In the roughly 10 months since Booz Allen was hired on the MAP project, it has established a program management office to help oversee 18 different working groups. Each group is headed by one or more senior SEC officials and aims to improve the agency’s structure and business processes. One group, for instance, was assigned to study ways the agency can bolster its staffing during a crisis period, such as during another “flash crash” like the one seen on May 6, 2010. Another group looked into cost-saving measures. The groups report to a steering committee headed by Heslop which votes on the recommendations and then refers them to Schapiro’s office for a final decision. Booz Allen’s job has been to run the program management office, manage the different working groups, provide expertise when needed, and help keep SEC staffers in the loop about the project. Since the project started, Heslop said the results have already given the SEC a “return on investment.” It uncovered between 700 and 900 wireless cards costing the SEC $43 a month that are not being used. It also shut down an underutilized shuttle service that was costing $14,000 a month. “We definitely have tangible, hard saves that can offset this $8 million” spent on the Booz Allen contract, Heslop said.