Last week, while touring London and Paris, Charles Laughlin and I had the chance to meet with Qype, a local business review site whose popularity in Europe has matched that of Yelp in some U.S. markets. Our first order of business was to finally get confirmation on the site’s proper pronunciation. The argument was settled: There is a silent U (pronounced “Kwipe”).

Drilling deeper, the company is moving in some interesting directions. After receiving 8 million euros in September from Advent and others, the Hamburg-founded site has been growing in a number of markets. This includes, interestingly, Brazil, which has shown a clear hunger for social media through the runaway success of Google’s stateside failure, Orkut.

The site is live in nine markets total and it receives 8 million monthly unique visitors between them. It’s also currently on the cusp of its 1 millionth review. Its most popular markets are the U.K., France and Germany, according to head of marketing Andrew Hunter (former head of marketing at Gumtree). In the U.K. market some additional exposure has resulted from Yelp’s recent jump across the pond.

“In the press activity around Yelp’s expansion, we are always mentioned in the same breath,” says Hunter.

Scoping the Coopetition

Like its U.S. expansion, Qype’s new competitor Yelp will likely grow in Europe using a stepping stone approach from city to nearby city. It’s done this by taking advantage of the cross-pollination of people and culture between cities like San Francisco and Los Angeles. This gets the ball rolling with respect to awareness and reviews generation.

Europe is a bit easier in this respect because a greater portion of the population is consolidated in cities. But there are also considerable challenges, says Hunter. In a city like London, it’s tough to capture the “flavor” of the myriad neighborhoods that make up the city. Yelp’s coverage as a result has mostly skewed toward certain parts of the city — as it happens, the more touristy parts where U.S. visitors have written reviews.

Qype has better coverage with a bigger head start in the region and a home base in London. It also has an interesting SEO-based strategy for gaining users. This mostly involves engaging SMBs to claim and populate their profile, which creates SEO muscle, and in turn leads to users finding and reviewing them.

“SEO is vital in local,” says Hunter. “Anyone who tells you otherwise is wrong.”

Playing Both Sides

This can also have the side effect of getting advertisers more engaged and excited about using Qype as an advertising channel. This is one area where Yelp has received criticism, and has begun to launch features that are decidedly more advertiser-centric (SMB tools to manage profiles, etc.).

Qype’s pricing for premium profiles and featured placement starts at 365 British pounds per year and can go up to a few thousand pounds for different performance-based packages. About 80 percent of its revenues come from these internal products, and the remaining 20 percent is a mix of outside advertising on the site.

Hunter claims (anecdotally) that the site has seen lots of recent interest and engagement from advertisers.

“We’ve seen some clever ways businesses have gotten people to review them,” he says. “One hairdresser on our site has people in his chair and when he’s done cutting their hair, he puts a laptop down in front of them and says, ‘there, review me.’ ”

Next up is a site redesign whose hard copy mock-ups looked sharp. It is also thinking in terms of mobile: An iPhone app called Qype Radar has gotten 100,00 downloads in two months and lets users read and write reviews on the go. Yelp has been averse to the latter in order to maintain the quality of long form reviews, but Hunter believes these shorter “twitter versions” of local reviews can have value.

“We can offer a separate section of the site that offers, ‘here’s what people are saying from mobile,’ ” he says.