Yelp Under Fire

“The biggest scam in the Bay Area.”

“Coercive, unethical, and, possibly, illegal.”

“Blackmail.”

Seems like Yelp is learning what some of its clients are going through.

Since allegations of the site’s “Mafia-esque” advertising tactics broke this past February in an East Bay Express expose [http://www.eastbayexpress.com/news/yelp_and_the_business_of_extortion_2_0/Content?oid=927491], reviews of the relatively new online forum have become increasingly hostile. Some accuse the company of recruiting advertisers with the promise of deleting their business’ bad reviews, while others are angry at Yelp’s inconsistent methods of filtering out reviews at random. Daggers are being thrown on both sides, but one thing is clear: Yelp needs to regain user trust, and fast.

A San Francisco native, Yelp was launched in 2004 by Jeremy Stoppelman and Russel Simmons, both former employees at PayPal. The site acts as an intricate Yellow Pages, where anyone can post reviews about a restaurant, flower shop, gym, doctor’s office, etc. The reviews range from caustic to glowing, and are accompanied by a rating of 1 to 5 stars. Since its inception, Yelp has spread to most American cities as well as the UK and Canada, and it boasts 20 million visitors in the past 30 days. For newcomers to a city, it is often a godsend, but for business owners, a few bad Yelp reviews can cause significant profit damage.

Stoppleman and Simmons talked about their company in an October 25, 2007, speech to The Commonwealth Club’s Inforum division, which caters to young professionals in the Bay Area. [Listen to streaming audio: [http://www.commonwealthclub.org/archive/07/07-10yelp-audio.html ]

The East Bay Express article quoted restaurateurs and shop owners noticing bad reviews moving to the top of their profile page right before Yelp account managers called them, often aggressively, to encourage advertising or sponsorship. Advertisers pay anywhere from $300 to $1,000 a month, for which they can highlight themselves in search results, place one positive review at the top of their review column, and enhance their page. But some store owners claim Yelp salespeople insinuated more – such as getting rid of or rearranging bad reviews, promising to write positive reviews themselves, and, if the offer was refused, taking down positive reviews or writing negative ones. A more recent article in The Chicago Tribune [http://www.chicagotribune.com/business/technology/chi-0309-yelpmar09,0,3536868.story ] cites the owner of More Cupcakes, Patty Rothman, being guaranteed “good reviews on the site if we catered one of their parties for free."

Stoppelman, who is now CEO of Yelp, has been quick to respond to these allegations. Two days after the Express expose, Stoppelman posted a blog about the “9 Myths of Yelp” in which, among other things, he explained how “Yelp’s numbered search results …have nothing to do with who is paying us.” He also told the Tribune that there is no link between advertisement and review placement, and that Yelp salespeople have zero access to the site’s infrastructure. As for the disappearing reviews, Stoppelman says that some entries disappear because the site’s filter automates which reviews are removed and which get to stay. He agrees that the filter is “overly vigilant, in some cases removing legitimate reviews,” but says that many reviews are deleted by the writers themselves. Solutions being toyed with include allowing business owners to personally respond to negative comments, as well as tinkering with the site’s filtering system. (On March 18, 2009, Kathleen Richards of the East Bay Express wrote a follow-up [http://www.eastbayexpress.com/news/yelp_extortion_allegations_stack_up/Content?oid=946025 ] to her Yelp story and commented on Stoppelman’s reaction. She noted: “Stoppelman criticized my use of anonymous sources, calling it ‘fraught with hazards and ... strongly discouraged by most editors.’ Yet Yelp is a review site based entirely on anonymous sources.” So the debate goes on.)

The problem with Yelp lies in its inconsistency: in the way it handles advertising (a necessary venture, since Yelp’s revenue relies solely on advertising and sponsorship); the fact that its contributors are, much like on Wikipedia, a group that is not held responsible; and their strange balance of promising to keep certain reviews on the site while others mysteriously succumb to the computer’s algorithmic filter. Then there are the advertisers who want more for their money, who are upset after $700 per month still has not rid them of negative reviews. In a February CNET article, Kirk O. Hanson of the Markkula Center for Applied Ethics at Santa Clara University said Yelp “created too many temptations for misbehavior.” Unless Stoppelman and his staff can restore trust, consistency, and reliability in their company, Yelpers and business owners alike will continue to battle it out.

Until then, I'm giving it two stars.