Yelp (YELP, NYSE, 20.90 – 26.00), the online urban guide to restaurants, shopping, etc., based on reviews from locals in the community, executed a very successful Initial Public Offering (IPO) on March 2, but is it for real?

The company’s bankers, led by Goldman Sachs, originally priced the offering between $12 and $14 per share to raise approximately $100 million in new equity. The demand was very high for the shares, ultimately driving the price to $15.

When the shares actually started trading they opened at $22 per share, closing the afternoon at $24.58, up 64 percent from the initial offer price. Some shares traded as high as $26.

Let’s look at some of the facts about Yelp: The company was founded in 2004 and is based in San Francisco. It currently has about 25 million reviews posted on its website and is getting approximately 66 million unique visitors a month. It competes with other review sites like TripAdvisor, Zagat, etc., and for online ads with Facebook, Google, etc., two sources of revenue for Yelp. It is, however, definitely at the head of the pack of review sites.

Yelp has never been profitable. It reported revenue of $83 million in 2011 but lost $17 million in the fourth quarter of 2011. Despite this, Yelp experiences a 63 percent growth rate, year-on-year. Its current market capitalization is about $1.2 billon, 15 times its revenue. (Apple trades at 15 times its profits.) On Sept. 8, 2011 Google purchased Zagat for $151 million.

It’s obvious that IPOs like LinkedIn, Zynga, Pandora and the anticipated Facebook helped to propel the lofty valuation. But you wonder how many investors on Wall Street have even used the online service to find a restaurant or service. Make up your own mind on this one but buyer beware.