Yelp thrives despite rumors of extortion
By Angela Penny
The Guardsman
Almost a year ago, the East Bay Express reported that Yelp was extorting local businesses. After dozens of interviews over several months, six people told The Express that Yelp ad sales representatives promised to remove negative reviews if their business agreed to advertise. In another six instances positive reviews disappeared or negative ones appeared after business owners refused to advertise.
“I still get about one complaint a day about this issue,” Kathleen Wentz, the story’s writer and managing editor of the paper said. “There have been some very specific cases that were related directly to sales calls before and after changes in review listings.”
There is currently an advertisement on Craigslist recruiting new Yelp sales people. They are expected to make at least 80 cold calls a day and many earn upwards of $80,000 per year.
Yelp claims many business complaints about disappearing reviews are caused by a misunderstanding of their review filter which is powered by a proprietary algorithm. Since their launch in 2004, they have used this automated service to “protect consumers and business owners from fake, shill or malicious reviews,” CEO Jeremy Stoppleman wrote in his blog on the official Yelp company Web log on Oct. 5, 2009.
The filter combs the site and deletes reviews that look like they were written by the business owners themselves or like others were paid to write them. It also looks for negative reviews posted on competitors’ pages. The algorithm also determines the order of the reviews, although they can also be sorted by date.
Crepes on Cole, located at the corner of Carl and Cole in San Francisco, has only three and a half stars from almost 300 reviews submitted since October 2004. Out of the 10 restaurants in the immediate vicinity, it has the lowest number of stars.
The owner, Sam — who chose not to share his last name — has advertised with Yelp but said no one ever claimed they could adjust reviews for him.
“It’s from the people,” he said. “Like me and you, they can write whatever they want. I don’t think anyone is allowed to change them.”
Yelp does offer paying advertisers the opportunity to select one review to display at the top of their list. Also, when users search for a business the results include a message suggesting a paying advertiser as an alternative.
Stoppleman’s blog entry shows a screenshot of a help wanted ad that appeared in the freelance jobs section on the Web site www.geekinterview.com. It was posted by a company looking to hire people to write fake Yelp reviews. Stoppleman wrote that these ads are fairly common.
Elite Yelp reviewer Dani Delce said that she has heard about the accusations of Yelp moving reviews around for advertisers but that it had never happened with any of her postings.
“But I’ve seen similar types of shadiness,” Delce said. “Like ‘I’ll pay you to mention my business on your blog or become a fan on Facebook,’ on Cragislist and a few freelancer sites.”
“For the most part, if I write a negative review, and it’s constructive, the business owner sends me a message and tells me they’re addressing the problem and they hope I’ll give them another shot. For the most part I’ve encountered great owners and managers who really use Yelp as a way to improve as opposed to a nuisance that they need to outsmart,” she said.
Stoppelman admits that legitimate review content sometimes gets lost as a result of the filter and wrote, “Our filter takes a conservative approach and errs on the side of protecting the consumer, when necessary.”
The allegations have not affected Yelp’s traffic or its reputation. According to Web measurement service Compete, the site started the year with 20 million and ended with 27 million monthly visitors.
In December 2009, Google offered to buy the company for half a billion dollars, but Yelp pulled out of the deal. There are rumors that Yelp is either holding out for more money, or they didn’t trust Google to effectively manage the community aspect of the site. Yahoo has also hinted that it is interested in buying the business.
Not only is the Web site an accessible venue for the huge yet fragmented local advertising market, it offers user generated content focused on providing human feedback.
Yelp is a virtual treasure trove of consumer behavior trends, and management stresses the strong impact that consumer confidence plays in its popularity and progress. If readers can’t trust that the reviews are accurate then they will stop using the service.