Consumer ratings firm Yelp is embarking on a hiring spree, expecting to add 200 salespeople this year as it seeks to expand its Web service that features user-generated business reviews.

Fresh with a $25 million investment from U2 lead singer Bono’s Elevation Partners venture firm, Yelp has added to its office space at its San Francisco headquarters, is planning to open another U.S. office outside of California, and will expand internationally in the near future, with Western Europe being a sure destination.

One immediate result of all the activity: A brief foray into profitability has ended.

“We’re back in the red, baby!” declared CEO and co-founder Jeremy Stoppelman with a laugh, at Yelp’s headquarters. Yelp, founded in 2004 by Stoppelman and Russ Simmons, both early PayPal employees, has 340 employees and occupies three floors totaling 30,000 square feet. It recently signed a lease for two more floors of 20,000 square feet, meaning it will occupy half of the 10-story building. Most of the new hires will be in San Francisco, New York, and a new as yet unidentified office out of state that will open later this month.

Yelp’s traffic has increased dramatically in the last year, hitting 29 million in the month of January, about 1.25 million of that on mobile devices. Users have also more than doubled Yelp’s database of reviews covering restaurants, shopping, autos, local services, and the like to 9 million.

Yelp makes money—it won’t say how much—selling local businesses advertising that appears as yellow-labeled “Sponsored Results” around the site. It has been targeted with numerous complaints that it deletes positive or negative reviews based on whether the reviewed company advertises and otherwise coerces local businesses into advertising. The company denies that, saying it simply tries to weed out fake or malicious content.

Stoppelman says the site has “authenticity” that competitors like Citysearch, Urbanspoon, and AT&T’s nascent Buzz.com can’t match. “Reviews are not a commodity,” he said.

The deal with Elevation Partners came a month after search giant Google reportedly offered $500 million to buy the company. The cash, including Elevation’s commitment to buy $75 million in stock from employees and shareholders, will relieve pressure for Yelp to go public, Stoppelman said. Yelp previously had received $31 million in funding from DAG Ventures, Max Levchin, Bessemer Venture Partners, and Benchmark Capital.

“Ultimately, in this case we are reaffirming our desire to be an independent company,” Stoppelman said. He declined to discuss any dealings with Google, but said Elevation Partners’ co-founder Marc Bodnick had been interested in Yelp for years.

Michael Boland, a senior analyst at BIA/Kelsey, said Yelp could still be an acquisition target, but it has such a strong brand and valuable library of content that it can stand on its own. The company also differs from competitors like Google in that it has a dedicated sales force that courts local businesses, a major asset, Boland said.

In December, Stoppelman went to New York and had dinner with Bono, who had read the review of the restaurant where they met. “He took a particularly keen interest in the deal,” Stoppelman said.

Stoppelman said he is excited about the expansion plans. An engineer by training, he also loves gadgets, and he has been having fun configuring Yelp’s technology to work on mobile devices, starting with the iPhone.

Like other tech companies, Yelp seeks to encourage such innovation among employees by letting them devote time periodically to their own ideas, as during a recent two-day “hackathon” in which the engineering staff split into teams to try to develop new features.

Yelp got a tremendous amount of attention in August by offering a novel “augmented reality” function that overlays Yelp review information onto the real world through the iPhone 3GS camera.

The prototype was ginned up by an intern, and at first it was a secret “Easter egg” application that users could activate only by shaking their phone three times. Mobile use jumped 30 to 40 percent, that intern is now an employee, and the popular application is no longer hidden.

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