Yelp, a user-generated database of customer reviews of local businesses, first launched in October 2004. Users rate and leave reviews for local businesses, participate in forums, and can generally get social around local businesses.
Yelp almost immediately caught on organically in San Francisco, but founders Jeremy Stoppelman and Russel Simmons ran into some early criticism. Rumors circulated that they were paying people to leave reviews on the site. Some users were outraged, claiming that paid reviews couldn’t be untainted. Yelp claimed that they were only “marketing assistants” employed by the company to “get the ball rolling” in new cities, and the reviews themselves were honest.
2006 proved to be the year of new competition, with Judy’s Book receiving an $8 million round in November 2005, Intuit releasing Zipingo in October 2005, and idealab’s Insider Pages receiving a cool $8.5 million Series A in March 2006. A daunting situation for a new startup to be in. But Yelp pulled through it to secure a $10 million in a Series B from Benchmark Capital in October 2006 and was named one of the 50 coolest sites on the web.
Then the competition started dropping like flies. Insider Pages laid off 2/3 of their staff and sold quickly to CitySearch in February 2007, Intuit said “goodbye” to Zipingo in August 2007, and Judy’s Book closed their doors in October 2007. Yelp was the sole survivor.
When Yelp released their API in August 2007, they were doing pretty well, getting 1.4 million U.S. visitors and 6 million page views per month. They’ve seen rapid growth since, now at almost 15 million U.S. visitors per month, surpassing competitor CitySearch in March (via Compete). Yelp has raised $31 million in capital, and mainstream press is all over them.
All that press gives business owners the idea that they need to pay attention to Yelp. So they ask their customers to leave positive reviews. Those customers then become Yelp users, and may leave reviews on other businesses, too. A virtuous and self sustaining cycle is created.
But when can you truly say that a company has “made it?”
It’s when people start hating you, of course.
Sites like Yelp-Sucks and IHateYelp have been popping up, with the general theme being an angry business owner who was Yelped. Those business owners that think they must use Yelp for competitive reasons are getting frustrated over some of Yelp’s policies, and are starting to complain about it. Loudly.
The good news for Yelp is that when businesses are afraid of you, it’s only because they realize how much power you really have. See, for example, Paypal and Ebay, two of the most reviled and profitable businesses on the Internet.
The major complaint is negative reviews, and how to get rid of them. But business owners are also complaining that they can’t use their accounts to leave reviews on other businesses, as well as a number of other complaints.
Yelp CEO Jeremy Stoppelman said recently in the NY Times, “We put the community first, the consumer second and businesses third.” Their goal is clearly to make businesses need Yelp, but not to expect a lot of help when it comes to disputes. Complain all you want, you’re just proving that you need Yelp more than they need you.
There is a local San Diego company called http://www.mojopages.com/. I asked them if there is a way for a company to respond to a bad review- there isn’t. I really think Yelp should allow business owners to respond to bad reviews. No, not delete by any means, but allow them to go on the record and respond. Why not? I think it kind of stinks that people can say things and the owner has no way to defend themselves or the company.
but.. both of those sites are practically empty.. registering a url is not very difficult
Calley,
I’m not sure how you’re measuring success, but unless Yelp has a business model different from advertising, this is a very bad sign. It is never a good development in your market when your advertising base starts to revolt.
Of note, I know numerous restaurant owners in San Francisco as well as the rest of the bay area, and those that have great success with strong reviews in local magazines and newspapers frequently end up with bad reviews. Concern is that competitors and not customers are posting poor reviews. This is a major problem with the service.
My $.02.
Best,
Curtis
BTW, should have stated that Mojo Pages and Yelp are competitors. Neither give the option to respond.
TripAdvisor allows the manager of a hotel to respond to critical reviews on its website, and those responses are clearly marked as “Manager”. That person usually responds to a complaint a previous poster had about bad service, etc. I like that.
I still give Yelp a 2% chance of seriously monetizing its business.
if they are taking money to remove bad reviews, as some allege, f ‘em
i will go further, this company is evil
Maybe these businesses should think about setting very clear expectations about what they offer, so people aren’t disappointed, or offer really good services. There are a lot of companies out there that have been running with very bad service for a long time, and for the first time, they are having to deal with direct, public criticism that is often warranted.
Obviously if it’s a competitor posting, that’s a problem, and Yelp needs to deal with it. But I’ve seen very little of that. You can usually tell an active yelper because they post reviews of all kinds of places, spread around geographically. Maybe yelp could mod down reviews that are done by people who only have that reivew or a couple of reviews but as more reviews appear, or many people mod up the review, yelp could then expose the site.
I also have had the experience of looking up a cafe for a meeting, only to discover the place was not at all what people described. They said it was great, and had all sorts of stuff on the menu.. but when we got there it was really bad.. unclean, no food at 8am, bad coffee, no chai, no other drinks besides twinnings tea.. and the seating was so bad we could hardly get in and out due to the way the legs were constructed and the door was positioned.
I did a more honest review.. and I think it helps people decide better when they are checking out a place site unseen, to see if its useful for whatever they have planned.
There’s another rising star in this category http://www.wikimetro.org that approaches this local business review and content market using a wiki like website so users can figure out how to respond, rather than depend on the site’s administrators.
wikimetro looks like a bad designed interface for a intranet. Yelp is easy to use.
“Angry Businesses Organize”…
Of course, this is America, where all businesses are angry, and all angry businesses get organized!
Now all they need to do is set up a lobbying group and start bribing Congressmen to get tax breaks from business they supposedly “lost” because of Yelp!
How about a “Yelp Tax” on Internet use, to be distributed to all the poor, angry businesses who have been “libeled” by Yelp and other evil websites?
interesting that yelp paid for reviews, would they pay for these idiotic hater websites as well?
http://www.yelp-sucks.com/ domain is registered to a lady named
Ashley, Adryenn adryenn_ashley@yahoo.com
Universal Services
5000 Lakeville Highway
Petaluma, California 94954
United States
(415) 420-5627
if you google 415-420-5627
http://www.google.com/search?h.....5-420-5627
six entries down, it takes u to yelp listing page, entry 6 of the yelp list uses the same 415-420-5627 phone number, which takes u to the user’s profile:
http://www.yelp.com/biz/wow-is-me-petaluma
Their website is: http://www.wowisme.net/
and http://www.wowisme.net’s main tag/approach is SHAMELESS Self Promotion
This smells kinda fishy!
Who knows if IHateYelp.com has fishy connections.
I’ve been loving Yelp for a long time. Just like most ‘bad press’ situation, the pissed off party is strengthening the brand of their nemesis.
love yelp.. helped me find my mechanic, dentist, barber, and tons of good restaurants. lets face it people.. if a place is good, it will be recognized, and if its bad it will also be recognized. If a business compels 100 people in the community to write a bad review, then no matter what the business has to say, I would not try it.
Owners have the option to create their own user account and write their own review of their business. Additionally, some of the owners (once they do set up their own user account) end up resorting to sending nasty emails to users instead of working on making their business better.
In an age where people want to get the best value for their money, I’m glad there are websites like Yelp around to help make more informed decisions.
And the practical effect of this is that every coulda-been restaurant critic will abuse this power.
The public knows very little about what the public wants. The real problem is how to incentivize members to leave positive reviews when they’re warranted, and to offer that incentive in such a way that it is not (or at least does not appear to be, depending on how you peg your demo) “paying for positive PR”.
Otherwise, over time, as with most “review” sites, Yelp will descend into a feedback loop of negativity, as it’s simply more fun to complain than praise.
the “angry businesses” headline is pretty misleading, both those sites are one post wonders, one hasn’t been updated in a year. Yelp has a very powerful business model and has IMHO “employed” it’s community better than any other web2.0 site that I can think of, they have done this by cleverly rewarding and therefore motivating “value creating” behaviors. The accusations of competitors writing bad reviews and megalomaniac yelp members single-handedly taking down businesses are obviously from people who have not spent very much time on yelp, many businesses have hundreds of reviews, and you tend to read about mixed experiences and generally make your own decision. Yelp’s business model is not just advertising either, they actually provide tools to businesses to manage their account and see metrics etc. In the end many of the businesses that really succeed on yelp are the ones that join the community and participate.
I wrote a case study on Yelp when I first came across it in 2006 and much of it still holds true:
http://experiencecurve.com/arc.....lpcom-case
Yelp has done a good job. Plenty of reviews even in smaller cities. As far as the angry business owners..that’s to be expected. No harm there.
I know Yelp For Business Owners launched the first week of May. I remember posting about it … how Yelp was giving biz owners the opportunity to engage the Yelper community. I’ve also noted numerous stories about businesses who’ve jumped on Yelp as an opportunity to improve consumer communication, service, and ultimately the bottom line. This May 21 NY Times article names several businesses who are grateful for Yelp, and how they made sure to contact poor reviewers to remedy the situation: http://tinyurl.com/55cxa2
The consumer is in control now. Businesses can be angry about it, or do something positive, like be transparent, have real conversations, provide top notch service … and take the bad hits and turn them into gold.
looks like my other post did not go thru,
do the research on these hater sites, the registered owner of the first has SHAMELESS Self Promotion as her/their motto.
Your example sites look like they were put up yesterday. One has two message posts. The other is one blog post. And the blog post looks like it was written by a 13 year old lemonade-stand owner.
Does Yelp really have any legs outside the few big cities that it is focusing on blowing the investor money?
Here in CT the reviews are scarce and there seems to be almost not quality control. I’ve seen more than one profanity laced review by a Yelper who also wears the “Elite 2008″ badge.
I still say that Yelp is not going to make it and this is largely smoke an mirrors. One or two hot areas of the country won’t be enough for them to make money. Many regions of the country do not know or care about Yelp. That is the biggest Yelp problem right after their lack of quality control over reviews.
Re: Intuit. I think that Canadian startups and funded projects should have a disclaimer on them since the Canadian govt takes tax payer’s money and launders it to these companies through BDC.
Another Yelp competitor is Yokld - http://yokld.com. The site is still in its early stages and is in beta, but voting and filtering through quality businesses is much more of a democratic process than Yelp. Rather than page through tons of ‘5 star’ businesses to find the best one, Yokld uses a up/down voting system so the best businesses float to the top. The site also has friends functionality similar to Mixx.
Also, Yokld businesses are added by members so that visitors only view businesses that other people like.
Yelp restaurant reviews are typically useless. The site is actually pretty good, but the content stinks because the people doing the actual reviews are clueless. It seems like a lot of people just write short useless reviews to boost up their ranking. While Zagat’s website may need work, the reviews and ratings are way more accurate than Yelp.
yelp sucks and is so like over; i live in san francisco; and everyone knows that the type of people who go around reviewing for yelp are young 20 olds who eat nothing but cheap shit like fast food.
this is like anti-marketing to get their name in the news.
you live in frisco, yelp has nothing for you, and yeah, eyes calls’d it frisco.
I think it makes a lot of sense to allow businesses to respond to complaints. There’s no harm in that and you might get relevant insight (both good and bad).
Agreed w #26 that there is a lot of chaff, but I’ve also found good restaurants and a great garage through Yelp. It has become my first destination for restaurant info, after years of using Zagat.
Someone commented that Yelp is rumored to be taking cash to remove bad reviews. I’ve written some tough (but civil and fair) ones that were suspiciously removed. All the good ones have somehow remained.
Hope they make it - it’s a great site.
That’s right , whenever somebody is suing your company or making complaint a lot about your market success. it’s a sure sign that they envy your success, if they can drag you all the way to the bottom they will do try.
Nat
http://www.workersinc.com
Like it or not, Yelp is hugely powerful. Check out this story…
My friend hired a cleaning company via Yelp. They quoted her $200 for the work. They show up and raise the quote to $300 before even looking at her place. She tells them to leave and says she’s going to post a negative review on Yelp.
Here’s the kicker. The guy begs her not to post something negative and offers her $100 to keep her mouth shut. So she made $100 and found new cleaners.
I wrote a quick piece about starting a Yelp Blackmailing business on my blog http://markshedletsky.wordpress.com.
When is Yelp expanding to Canada!?
Pretty tame compared to some of the hate sites I’ve seen (really no activity on the two posted sites, so I don’t see why this became a larger piece).
It would be just as easy for the businesses to complain if they got a negative review in the NYT or Yahoo Local, for example, so expecting individual consumers to do the same. And, to be fair, I actually haven’t seen most businesses rated extremely poorly on Yelp. Businesses shouldn’t get upset if the reviews are largely positive.
All positive reviews for our business misteriously disapper from Yelp, we guess it’s a way to make us pay to Yelp one way or another.
For some reason our clients don’t care about Yelp.
Unless there are more communists like Mr. Newmark — willing to build enterprises with minimalist/no business model, sites like Yelp will not work. You cannot put businesses “third” in your hierarchy and expect to create a “business”. Where shall your revenues come from? 50 cent CPMs? You idiots on the West Coast have effectively forced the “it must be free to consumers to be good” mantra down the country’s throat (thanks to the media) and are now backed into Google’s corner — from which you shall never emerge. Now what have you got? Bubble 2.0? You, (Software engineers especially) effectively created this faux economy with the help of the money washers (VCs). Sites like Yelp are efforts in futility. The problem with the web in general is anonymity. Joe Blow writes a review of Joe’s Cafe and this means what? Nada, folks. No one gives a crap what Joe thinks. You people are so self absorbed with the flavor du jour in the Valley (Twitter and 90% of every other start-up featured here) that you can’t see the forest for the trees. Lesson: if you can’t get a consumer to part with his/her dollars to receive your service, its has no real value –at least in a business sense. The only exception to this rule currently is the monolith created by Googletards. You are all working for them and you don’t even know it. Brilliant!
The best way for a business to respond to these consumer-focused rating sites is to capture their own client testimonials and then showcase their reputation through their own testimonial showcase board. Our company at KudosWorks (http://www.kudosworks.com) focuses entirely on allowing businesses to automate testimonial request and capture as well as accelerate the client-to-friend referrals. This “word-of-love marketing” system enables and motivates a merchant’s customers to spread their testimonials throughout the internet (myspace, facebook, yelp, etc). Businesses today need to be proactive and get their happy clients to write testimonials and then have them post these positive reviews in the various venues that are available.
KudosWorks http://www.kudosworks.com
#36:
The very foundation of Yelp’s product is neutrality. So yes, you absolutely have to put the community first, the consumer second, and the business third.
Now I’m not saying that quality control isn’t needed. BUT, at the most basic level, zero-QC is also perfectly neutral. The real challenge is adding on layers of QC that do not distort neutrality and while convincing everyone why that is the case.
The power of Yelp comes in large numbers. I know the reviews are not as detailed nor as accurate as Zagat, but I’m consistent amazed by the raw VOLUME of reviews. I really think the average opinion emerges victorious over fraudulent or outlier opinions at around N>20.
Letting business owners claim their own listings and respond to negative comments seems like a “why not?” move though…
As a business owner I feel there should be an owner comment area for each review. It’s rewarding to see the appreciation of our customers but it is also very transparent when we see reviews that are coming from a competing store through owner,staff, or friend just for the sake of the negative stab. I also feel some of these reviewers are writing negative comments about many of the stores they review and do this for sport. Our businesses are our livelihood and most of us are passionate about what we do so when we read reviews that are down right wrong, personal attacks, and unfair it reduces the validity of the whole process! Because of my feelings towards this I have not used any of the business services you offer and I’m sure others feel the same way. YELP needs to be more impartial by allowing the business owner to respond and then perhaps more business owners would use it’s other services.
Yelp will be fine. All it needs to be is better than Citysearch which is easy. It’s a category that can easily support ad-based revenues. Pissing off businesses is a by-product of being aggressive. Could they have done it better? Probably. But they also could have done it a lot worse.
Hmm yelp sucks, except for backlinks lol
I knew it… the reviews loook fake.. especially for NYC.. i prefer CitySearch here.. or Zagat..
Ok, nice publicity for the two people pissed off with Yelp. Really, if you have millions of users and only two bother to create anti-sites, AND no one else bothers to post on them…
I don’t use Yelp, or any Web 2.0 crap for that matter. I write it, but at the end of the day I’m out hanging out with real people. This article just seems like bait to me. A no-name has nothing to say about a web 2.0 company. news? no.
@36
Communists like Craig Newmark? You’re an idiot.
I am pretty sure the guy is much more well off then you.
If you are so smart and can provide a great product that consumners want, why do you post anonymously. Don’t come in and comment anonymously about things you don’t obviously know anything about.
Though I do agree with you on one thing. Twitter is a waste of time.
Facebook will kill Yelp. They were dumb enough to allowed to be beaconed, soon they will lose their destination brand and will be just another review point on one of the many facebook apps.
@24: You should meet our friend Chris here; he also spews unresearched nonsense about Canadians. There is a funding agency called BDC, just as there are Small Business Administration (SBA) bureaus in the States, and your chance of getting start-up funds from them is slim, with SBAs probably paying out more on a per-capita basis. To claim that all startups get (or want) BDC funding is beyond ludicrous; to claim that this is unique to Canada shows a poor knowledge of your own market conditions (didn’t the Governator award some sizable tax breaks and financial incentives to Tesla just yesterday ?); to claim that companies who get state investment are less worthy is just fanciful (have you looked at the success of companies funded by your own federal investment agencies ? NASA contractors seem to be doing fine; the military supply companies aren’t exactly small one-person shacks — in general — etc. etc.)
Just so we’re clear, I don’t work for Yelp. My account was axed, the reasons given were worthless. They refuse to identify WHAT was flagged on my account.
Yes, I’m shameless and VERY good at what I do. I managed to get TechCrunch to write an article about my issue, list my website (that I registered yesterday and designed myself in 10 minutes), and get the discussion going.
When the company won’t give me anything but a canned response, I take the issue to the court of public opinion. That has always worked in the past. My concern is that a lot of innoncent collateral damage is being ignored by Yelp. I personally love Yelp, I just hate the new policy and I hate the way I was treated and that I am continually defamed by their “this profile was removed for violating our terms of service” whenever anyone goes to my shortcut. And I can’t retake the shortcut. And I can unpost every place I’ve put the yelp link. See the catch 22?
Anyway, the public debate will showcase that Yelp is operating on a set of double standards. The very reasons they say I was deleted, I can find 10 examples of other people who are violating that rule and they are still active. So there’s something else fishy going on. And I aim to find out.
@40 Citysearch is a joke. very few people have posted more than 1 review. Talk about a schill fest
@43 facebook is going to do well in this space. Yelp should succumb and organize momentum on facebook much like Trip Advisor has done - there are more “local dining” (application on facebook by Trip Advisor) reviews on facebook per location than there are on Tripadvisor.com. They all feed into Trip advisor.com and end up representing more closely what zagat looks like: short, concise reviews.
Yelp will do very well. They started calling out of San Fran early this year and have already done a huge amount of business. The problem is there 12 month contracts which are expensive and exhaust the tight budgets and patience of restaurant / small retail shop owners.
I’m sure there are quite a few businesses that are angry at Yelp for the opposite reason: too many positive reviews, resulting in hordes of mainstream customers, which ruin operations that would rather stay small and intimate. Just ask German Tourist Club.
Rumors that Yelp was paying for reviews? How is it a rumor when it’s true. They had ads all over craigslist looking for people to write reviews and offering gift cards or straight up cash. Insider Pages was doing the same thing.
@45 - you are a retard, and I think you just demonstrated why Yelp blacklisted you.
Yelp is a great site with a great business model.
Yelp is unique in that it engages 3 audiences -
1) content providers (users who write reviews)
2) web surfers looking for reviews
3) businesses who want to advertise
They take ad money from all 3. They are smart. They will get bigger.
“Fake” reviews are easily distinguishable from real reviews. Business to business trashing is not Yelp’s fault. Yelp is based on trust. I expect more measures based around trusted reviews to be introduced as Yelp gets bigger.
Funny that no one mentioned that they are killing YellowPages…maybe they can set up a 411 or a directory services line to make even more money.
Also funny that the concept of Yelp is failing badly in England! Why? My theory is that we have too many chains - too many starbucks, macdonalds and cafe nero’s. Qype is trying to make its mark, but there are users on thee reviewing stores liek Homebase and Marks & Spencers so they can qualify for the holiday draw…