The surprising part of this announcement is not that Yahoo partnered with Yelp; it’s who Yahoo did not partner with: Foursquare. Speculation about a Foursquare data partnership with Yahoo has been a popular topic of late.

• In August, BuzzFeed reported that Yahoo and Foursquare were in talks to strike a data-sharing partnership. (The discussions were “still fluid,” the report noted.)
• Fast Company followed it up with, “Why Yahoo and Apple Want Foursquare’s Data.” (Spoiler alert: It’s local and social!)
• Quartz wrote a checklist of “all the reasons Yahoo is going to acquire Foursquare.” (Millennials, makes no money, mobile-focused, stereotypical founder, and ability to actually make money under Yahoo.)
• Kara Swisher noted that Foursquare has “always been a favorite of (Yahoo CEO Marissa) Mayer, including an interest in buying the company when she was an exec at Google, which never came to pass, for various reasons.”
• Business Insider wrote that Mayer is “awfully interested” in Foursquare, citing an interview where Mayer called out Foursquare as a good example of the potential for location-based advertising.

But the news of Yahoo teaming up with Yelp, not Foursquare, puts this speculation to rest. Yahoo probably doesn’t need two location data partnerships.

Yelp and Foursquare are competitors; the biggest differentiator is that Foursquare, which was founded in 2009, is a mobile-first company. Yelp, which started in 2004 and went public in 2012, has had to transition its business over to mobile to meet the shift in traffic. Almost 60% of Yelp’s search queries are now mobile.

The other big difference between the two is that Yelp has figured out how to make a lot of money from local business owners faster than Foursquare.

Foursquare is working hard to catch up — the company now has six streams of revenue, according to a spokesperson: venue claims, in which a business owner pays $20 to get control over his venue’s account; promoted search results; promoted “Explore” results; ads that are shown after a person checks in at a venue; a self-serve ad platform, where venues can buy ads independently; and data partnerships. Currently Microsoft and data clearinghouse Gnip are Foursquare’s two clients for that offering.

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Since last fall, Foursquare CEO Dennis Crowley has been touting the value of his mobile app’s location and check-in data. He’s right to: Foursquare has collected a trove of data, through 5 billion check-ins within its own app, as well as data points from its 50,000 API partners like Instagram that use Foursquare’s location database. Location data is valuable — look no further than Google’s (GOOG) $1 billion acquisition of traffic app Waze last year for proof. And last year Apple (AAPL) bought three local mapping apps: one called Embark, another called Locationary, and subway mapping site HopStop.

Last week, Microsoft (MSFT) said it found Foursquare’s data valuable enough to pay for and invest in. The companies announced that Foursquare location data would show up in Microsoft’s Windows Phone and Bing search results. The news was a reminder that, aside from boosting its valuation, data could be a big business for Foursquare, which has struggled to monetize as it matures. (The company brought in just $2 million in revenue in 2012; reports vary over whether it hit revenue expectations of $20 million last year.)

Foursquare was once New York’s hottest tech company, and it commanded a frothy valuation to match. The company’s challenge of living up to the hype and the valuation have been well-documented: Last Spring the company raised $41 million in debt to avoid taking a down-round. The recent investment from Microsoft, which was added on to a $35 million Series D round of funding led by DFJ Growth and the Capital Group’s Smallcap World Fund, valued the company at $650 million, a small step up from its $600 million valuation three years ago. 

It’s not clear why Yahoo chose Yelp over Foursquare, though a person familiar with Foursquare says the startup walked away because Yahoo was not interested in the strategic investment part of the deal. And the Foursquare-Microsoft data partnership is not exclusive, so Foursquare could theoretically revisit the topic with Yahoo. Still, this partnership seemed like an easy layup for Foursquare. And at this point, the company needs to make every shot it gets.