WebProNews

Tag: Online Reviews

  • Amazon Sellers Trade Positive Reviews for Massive Refunds

    Amazon Sellers Trade Positive Reviews for Massive Refunds

    Amazon sellers are encouraging users to delete negative reviews, even offering refunds above and beyond the sale price in exchange.

    Amazon has long-struggled with fake reviews, with an entire industrysprouting up to game the system. The problem has even received the attention of regulators, with Britain’s Competition and Market Authority investigating whether the company is doing enough to combat the issue.

    According to The Wall Street Journal, via Business Insider, some resellers on the platform are contacting individuals who have left negative reviews to offer refunds, in some cases more than double the initial price, in exchange for removing the negative reviews. In some cases, resellers have repeatedly contacted individuals until they get a response.

    Amazon’s policy prohibits sellers from contacting buyers outside of the company’s own platform, but that hasn’t stopped sellers from doing just that. The company has reiterated these types of interactions shouldn’t occur, and that it takes action against those responsible.

    “Amazon provides a great deal of help content, proactive coaching, warnings and other assistance to sellers to ensure they remain compliant with our clearly stated policies,” an Amazon spokesperson told The Journal. “We have clear policies for both reviewers and selling partners that prohibit abuse of our community features, and we suspend, ban and take legal action against those who violate these policies.” 

    In the meantime, as The Journal points out, customers leaving a review should be careful not to leave personal details in their reviews, thereby making it more difficult for sellers to contact them outside of Amazon’s system.

  • Study Finds Consumer-Generated Content Boosts Conversions, Revenue

    Study Finds Consumer-Generated Content Boosts Conversions, Revenue

    Bazaarvoice has some new research out looking at how brands and retailers drive business value with consumer-generated content (CGC). This includes reviews, questions and answers, social media posts, pictures, videos, and chat comments.

    According to the report, brands and retailers are seeing an increase in conversion rates and increased revenue per visitor with customers who interact with CGC before purchasing. The firm says that across its network, if a person who doesn’t interact with CGC spends over $20, one who does interact with CGC spends $39.26. For every dollar of online revenue, another $6.50 of revenue is influenced by CGC, it says.

    “Now more than ever, visual content is an integral aspect of the CGC mix, bringing a more emotional, ‘right-brain’ experience to complement ratings and reviews and influence shoppers,” Bazaarvoice says.

    Here’s a look at where brands and retailers use CGC other than their website:

    bazaarvoice

    “Focusing on key phrases such as ‘wish,’ ‘if only,’ or ‘only problem’ from CGC is helping brands and retailers make improvements more dynamically and in near real-time response to consumer comments,” it says.

    Screen Shot 2016-04-25 at 11.58.45 AM

    According to the findings, 51% of brands and 91% of retailers plan to increase use of CGC across the customer journey over the next year.

    You can find the full report here (via SocialTimes).

    Images via iStock, Bazaarvoice

  • Google Drops the Google+ From Business Reviews

    Google Drops the Google+ From Business Reviews

    Google is reportedly no longer requiring users to have Google+ accounts to leave reviews. Given that Google+’s popularity never really caught on, this could open up the door for local businesses to get a lot more reviews on Google for better or for worse.

    Google has of course been removing the Google+ integration it spent several years building into many of its products, and this is just the latest example. For the most part, users have not seemed to be incredibly thrilled with Google+ being thrust upon their various Google experiences. The YouTube comment integration was particularly unpopular, but Google got rid of that last summer.

    According to reports, all users need to leave reviews on businesses is a Google account. They’re still required to leave a first and last name.

    More Google users leaving more reviews? I can’t imagine that Yelp, a frequent critic of Google, is thrilled with this news.

    Local search guy Mike Blumenthal who reported on the change (via Search Engine Land) also notes that Google has fixed a bug that prevented reviews from being left on mobile browsers if the business had no previous reviews. This is another reason businesses might start seeing their review counts go up.

    In related news, late last week, Google updated its documentation that contains advice for improving your local ranking. More on that here.

  • Companies Pay Up For Fake Yelp Reviews

    New York Attorney General Eric Schneiderman announced settlements with Machinima, Inc. and three other companies in separate investigations regarding the companies’ role in posting fraudulent content on the Internet. This includes fake Yelp reviews.

    Machinima agrees to pay $50,000 for failure to require disclosure of payments to gaming experts endorsing Xbox on YouTube, while the other three companies (Premier Retail Group, ESIOHInternet Marketing, and Rani Spa) are also forced to pay penalties and agree to stop posting fake reviews.

    According to the AG, Premier Retail Group solicited reviewers through ads posted on Craigslist to write positive reviews in exchange for free samples, vouchers, and other compensation even if they hadn’t visited one of their locations. One such ad said, “Have a Strong Yelp account? Want to make money writing reviews?” The company paid a penalty of $50,000, $30,000 of which is suspended assuming compliance with the settlement agreement.

    ESIOHInternet Marketing, according to the AG, solicited over 50 freelance writers on Craigslist and Fiverr to write over 200 fake reviews of its small business clients for $10 to $15 per review. The company agreed to stop posting fake reviews and related deceptive trade practices and pay a $15,000 penalty.

    Finally, Rani Spa engaged in the efforts of a Candian businessman who offered to boost their online reputation by posting fake Yelp reviews. The company agreed to stop posting fake reviews and related deceptive trade practices and pay a penalty of $50,000.

    A press release from the AG’s office says:

    Ensuring honesty on the Internet is of paramount importance to consumers because of the effect that online reviews can have in influencing consumers’ purchasing decisions. According to one survey, 90% of consumers say that online reviews influence their buying decisions. Multiple studies have concluded that online reviews can make or break companies. A 2015 Nielsen Study reveals that 66% of the global consumers trust consumer opinions posted online, making it the third-most-trusted source of information about businesses after word-of-mouth and recommendations from friends and family. A highly-cited Harvard Business School study from 2011 estimated that a one-star rating increase on Yelp translated to an increase of 5% to 9% in revenues for a restaurant. Cornell researchers have found that a one-star swing in a hotel’s online ratings at sites like Travelocity and TripAdvisor is tied to an 11% sway in room rates, on average.

    The settlements announced today are a continuation of the Attorney General’s commitment to ensuring accurate and reliable consumer reviews. In September, 2013, AG Schneiderman announced “Operation Clean Turf,” the largest investigation into astroturfing by a law enforcement agency, resulting in settlements with 19 companies that paid over $350,000 in penalties. After an extensive undercover investigation into the reputation management industry, AG Schneiderman’s office found that companies had flooded the Internet with fake consumer reviews on websites such as Yelp, Google Local, and CitySearch; used techniques to hide their identities, such as creating fake online profiles on consumer review websites; and paid freelance writers from as far away as the Philippines, Bangladesh and Eastern Europe $1 to $10 per review.

    Yelp discusses the AG’s announcement on its blog:

    Through Yelp’s advanced recommendation software and Consumer Protection Initiative that includes undercover investigations, Consumer Alert program, and legal enforcement efforts, we’ve been able to mitigate the effect of these bad actors. We filed legal action in 2013 against James McNulty, the internet scammer paid by Rani Spa, which led to his admission that Yelp’s recommendation software had foiled his attempts to place fake reviews. ESIOH Marketing halted their services and took down their website in response to our demands in 2014, and Yelp caught Premier Retail Group (aka Infinite Beauty) soliciting reviews on Craigslist the same year, which resulted in us removing many paid reviews and closing associated user accounts.

    The sad reality is that some businesses will always be tempted to try to game the system, which is why Yelp is committed to continuing our efforts and leading the industry in an aggressive stance against astroturfers. We commend the work here of the New York Attorney General and hope to see other regulators follow their lead.

    Yelp posted its Q4 and full-year 2015 earnings earlier this week. The company reported 34% growth in cumulative reviews at about 95 million.

    Image via Wikimedia Commons

  • Yelp Discusses Its Local Ad Sales Efforts

    Yelp Discusses Its Local Ad Sales Efforts

    Yelp released its financials for Q4 on Monday. With the company’s everlasting battle to debunk “conspiracy theories” about its business practices back in recent headlines, we checked in with what the company had to say on its earnings conference call.

    Has Yelp sufficiently put this issue to rest in your opinion? Share your thoughts in the comments.

    The subject actually didn’t come up during the call – even in the Q&A portion. This is perhaps an indication that the company has convinced this particular audience of its defense or that this audience isn’t particularly interested in the narrative.

    The subject of Yelp’s sales efforts of course was very much a part of the conversation, so for those who are interested in the aforementioned battle might be interested in what the company did say.

    First, let’s rewind a bit. For years, Yelp has been accused by business owners of burying positive reviews when these owners decline to pay for advertising. Yelp has always denied anything of the sort, pointing to to studies, failed lawsuits, and an FTC investigation, but the accusations and suspicions have failed to ever subside.

    Yelp itself brought the subject up on its corporate blog last week pointing to what it said was the first example of “real reporting” on it, which the company says debunks the “extortion conspiracy”. What they didn’t mention is that this sole example of “real reporting” came from a source who leads strategy for an organization whose board includes the guy who leads sales at Yelp. They also apparently don’t consider an upcoming feature-length documentary full of third-party interviews an example of real reporting.

    So back to the earnings call. Again, none of this was addressed, but CEO Jeremy Stoppelman noted that Yelp’s revenue will be driven by its local advertising business over the next few years and that the company has broken past the 100,000 local advertising account milestone. He talked about how Yelp sees its Transactions business as an increasingly important component in the company’s over all business, but noted that “for the foreseeable future, we see local advertising as the core.”

    According to COO Geoff Donaker, Yelp saw 45% year-on-year growth of its sales force.

    Stoppelman said on the call, “As I think about the year ahead and the large opportunity in front of us, our three priorities are to continue to build our core local advertising business, increase awareness and engagement and grow transactions. The vast majority of local business owners continue to advertise in traditional offline channels. BIA/Kelsey projects that the Yellow Pages industry will generate roughly $7 billion in 2016. Even though according to a 2015 BrightLocal study, more than 90% of consumers read online reviews when looking for a great local business. Migrating these offline marketing budgets online continues to represent a huge market opportunity for us.”

    “As business owners evaluate their marketing options, many are coming to appreciate the value of Yelp advertising,” he continued. “For example, KinderCare Education, a childcare provider with over 1,000 locations across the country, have been a Yelp advertiser for 2 years but stopped in 2013. Based on a decline in the quality of their lead shortly thereafter, so they recently resumed advertising on Yelp to tap into our purchase-oriented consumer traffic. We are pleased to see KinderCare return to Yelp and this experience underscores the importance of communicating ROI to business owners.”

    Later in the call, CFO Rob Krolik, who announced his resignation, said, “So in terms of 2016 guidance in active local accounts and what that means, just as a reminder, our sales folks are compensated on revenue, not specifically on account growth. So while obviously, it’s important, more important is the advertising revenue that we are generating from each client.”

    “I think what I hear from our sales team is that Google and Facebook do come up, but in general, when they hear Google and Facebook from a local advertiser, that’s a really good sign,” he added. “That means that the local advertisers who has already started to shift online and it’s a great opportunity for us to talk with them about Yelp advertising as well and we are very confident with the ROI that we offer the typical advertiser. More often frankly, we are dealing with prospects who don’t advertise online at all yet and that’s a more difficult conversation, because you are trying to get somebody effectively out of print and online, which is happening over time, but is a more gradual process.”

    If you want to read what some business owners have recently said about about their experiences with Yelp advertising and sales calls, you can check out the comments on our article from last week for some of the latest.

    All Yelp quotes are via Seeking Alpha’s transcript of the conference call.

    Have you advertised with Yelp or discussed it with its sales team? What was your experience like? Discuss.

    Image via Yelp (Flickr)

  • Yelp Earnings Out, CFO Steps Down

    Yelp just released its financials for Q4 and full year 2015 with revenue of 153.7 million (up 40% year-over-year) for the quarter.

    Cumulative reviews grew 34% to approximately 95 million. Local advertising accounts grew 32% to approximately 111,000.

    CEO Jeremy Stoppelman said, “We are pleased with the progress we made on the key initiatives we set at the beginning of 2015. We have evolved to a mobile-centric company and have successfully completed our transition to a performance-based advertising business. In 2016, our priorities are to continue to build our core local advertising business, further increase engagement and awareness and grow transactions. With our rich, relevant review content and highly engaged consumer traffic, we are well-positioned to capture the enormous opportunity ahead of us.”

    The company also announced that CFO Rob Krolik is stepping down.

    “Rob has played a crucial role in Yelp’s successful transition from startup to public company, bringing his professionalism and experience to bear in setting Yelp on a firm financial foundation and headed in the right direction,” said Stoppelman. “I am grateful for his counsel, his leadership and work on our public offerings and five acquisitions, and his efforts in opening facilities around the world to accommodate our more than 4,000 employees. I will miss his passion for Yelp and wish him continued success in his next endeavor.”

    “I am a strong believer in the power of Yelp to help consumers and local businesses alike, which is why it has been such a tremendous opportunity and privilege to serve as CFO,” said Krolik. “It’s been a rewarding experience taking Yelp public, diversifying our offerings through acquisitions, and seeing our team deliver significant and consistent revenue growth year after year. After almost five years with Yelp, I am ready to take some time off to spend more time with family, but expect us to seamlessly transition to a new chief financial officer in the meantime.”

    Here’s the release in its entirety:

    SAN FRANCISCO, Feb. 8, 2016 /PRNewswire/ — Yelp Inc. (NYSE: YELP), the company that connects consumers with great local businesses, today announced financial results for the fourth quarter and full year endedDecember 31, 2015.

    Yelp logo. (PRNewsFoto)
    • Net revenue was $153.7 million in the fourth quarter of 2015, reflecting 40% growth over the fourth quarter of 2014.
    • Cash flow from operations was $3.8 million in the fourth quarter. Adjusted EBITDA for the fourth quarter of 2015 was $17.5 million.
    • Cumulative reviews grew 34% year over year to approximately 95 million.
    • App Unique Devices grew 38% year over year to approximately 20 million on a monthly average basis1.
    • Local advertising accounts grew 32% year over year to approximately 111,000.

    Net loss in the fourth quarter of 2015 was ($22.2) million, or ($0.29) per share, compared to net income of $32.7 million, or $0.42 per share, in the fourth quarter of 2014. Net loss for the fourth quarter of 2015 included an income tax expense of $20.3 million due to the recording of a valuation allowance against our deferred tax assets. Non-GAAP net income, which consists of net income excluding stock-based compensation, amortization and valuation allowance and release, was $9.0 million for the fourth quarter, or $0.11 per share, compared to $14.5 million, or $0.19 per share, in the fourth quarter of 2014.

    Net revenue for the full year ended December 31, 2015 was $549.7 million, an increase of 46% compared to $377.5 million in the prior year. Adjusted EBITDA for the full year 2015 was $69.1 million compared to $70.9 million for the prior year. Net loss for the full year ended December 31, 2015 was ($32.9) million, or ($0.44) per share, compared to a net income of $36.5 million, or $0.48 per share, in 2014. Non-GAAP net income for the full year ended December 31, 2015 was $28.9 million, or $0.37 per share, compared to $36.3 million, or $0.47 per share in 2014.

    “We are pleased with the progress we made on the key initiatives we set at the beginning of 2015,” said Jeremy Stoppelman, Yelp’s co-founder and chief executive officer. “We have evolved to a mobile-centric company and have successfully completed our transition to a performance-based advertising business. In 2016, our priorities are to continue to build our core local advertising business, further increase engagement and awareness and grow transactions. With our rich, relevant review content and highly engaged consumer traffic, we are well-positioned to capture the enormous opportunity ahead of us.”

    “We delivered strong topline growth of 46% year over year as we surpassed half a billion dollars of revenue in 2015,” added Rob Krolik, Yelp’s chief financial officer.

    Fourth Quarter Operating Summary

    • Local advertising revenue totaled $125.9 million, representing 35% growth compared to the fourth quarter of 2014.
    • Transactions revenue totaled $14.0 million, compared to $1.4 million in the fourth quarter of 2014, primarily due to the acquisition of Eat24 in the first quarter of 2015.
    • Brand advertising revenue totaled $7.1 million, representing an 18% decrease compared to the fourth quarter of 2014. Yelp has completed the phase out of its brand advertising product and will have no Brand advertising revenue in 2016.
    • Other revenue totaled $6.8 million which was flat compared to the fourth quarter of 2014.

    Business Highlights

    • App engagement: Approximately 20 million unique devices accessed Yelp via the mobile app on a monthly average basis in the fourth quarter of 2015, an increase of 38% compared to the same period in 2014. In the fourth quarter of 2015, Yelp app users were more than 10 times as engaged as website users based on number of pages viewed.
    • Performance-based advertising: In 2015, Yelp completed its transition to a performance-based advertising business. As of the fourth quarter of 2015, 61% of local advertising revenue came from CPC advertisers, compared to 32% in the fourth quarter of 2014.
    • Eat24 & SeatMe: In 2015, Yelp acquired leading web and app-based online food ordering service Eat24. In the fourth quarter, Eat24 revenue growth accelerated, with revenue up approximately 80% compared to the fourth quarter of 2014. In the fourth quarter of 2015, over 15 million diners were seated through SeatMe, an increase of approximately 120% over the fourth quarter of 2014.

    CFO Transition

    The company announced that chief financial officer Rob Krolik will be stepping down and departing the company in the coming months. Krolik, who joined the company in 2011, will continue as chief financial officer until the earlier of the date a replacement is hired and December 15, 2016, and will assist in the search and transition. The company intends to immediately begin a search for a new chief financial officer.

    “Rob has played a crucial role in Yelp’s successful transition from startup to public company, bringing his professionalism and experience to bear in setting Yelp on a firm financial foundation and headed in the right direction,” said Jeremy Stoppelman. “I am grateful for his counsel, his leadership and work on our public offerings and five acquisitions, and his efforts in opening facilities around the world to accommodate our more than 4,000 employees. I will miss his passion for Yelp and wish him continued success in his next endeavor.”

    “I am a strong believer in the power of Yelp to help consumers and local businesses alike, which is why it has been such a tremendous opportunity and privilege to serve as CFO,” said Krolik. “It’s been a rewarding experience taking Yelp public, diversifying our offerings through acquisitions, and seeing our team deliver significant and consistent revenue growth year after year. After almost five years with Yelp, I am ready to take some time off to spend more time with family, but expect us to seamlessly transition to a new chief financial officer in the meantime.”

    Business Outlook

    As of today, Yelp is providing its outlook for the first quarter and full year of 2016.

    • For the first quarter of 2016, net revenue is expected to be in the range of $154 million to $157 million, representing growth of approximately 31% compared to the first quarter of 2015 at the the midpoint. Adjusted EBITDA is expected to be in the range of $10 million to $12 million. Stock-based compensation is expected to be in the range of $19 million to $21 million, and depreciation and amortization is expected to be approximately 5% of revenue.
    • For the full year of 2016, net revenue is expected to be in the range of $685 million to $700 million, representing growth of approximately 26% compared to full year 2015 at the midpoint. Adjusted EBITDA is expected to be in the range of $90 million to $105 million. Stock-based compensation is expected to be in the range of $83 million to $87 million, and depreciation and amortization is expected to be approximately 5% of revenue.

    Quarterly Conference Call

    To access the call, please dial 1 (866) 776-8879, or outside the U.S. 1 (440) 996-5670, with Passcode 29597481, at least five minutes prior to the 1:30 p.m. PT start time.  A live webcast of the call will also be available at http://www.yelp-ir.com under the Events & Presentations menu.  An audio replay will be available between 4:00 p.m. PT February 8, 2016 and 11:59 p.m. PT February 15, 2016 by calling 1 (855) 859-2056 or 1 (800) 585-8367, with Passcode 29597481.  The replay will also be available on the Company’s website at http://www.yelp-ir.com.

    About Yelp

    Yelp Inc. (http://www.yelp.com) connects people with great local businesses. Yelp was founded in San Franciscoin July 2004. Since then, Yelp communities have taken hold in major metros across more than 30 countries. Approximately 20 million unique devices1 accessed Yelp via the Yelp app, approximately 75 million unique visitors visited Yelp via desktop computer2 and approximately 66 million unique visitors visited Yelp via mobile website3 on a monthly average basis during the fourth quarter of 2015. By the end of the same quarter, Yelpers had written approximately 95 million rich, local reviews, making Yelp the leading local guide for real word-of-mouth on everything from boutiques and mechanics to restaurants and dentists.

    1 Calculated as the number of unique devices accessing the app on a monthly average basis over a given three-month period, according to internal Yelp logs.

    2 Calculated as the number of “users,” as measured by Google Analytics, accessing Yelp via desktop computer on an average monthly basis over a given three-month period.

    3 Calculated as the number of “users,” as measured by Google Analytics, accessing Yelp via mobile website on a monthly average basis over a given three-month period.

    Non-GAAP Financial Measures

    This press release includes information relating to adjusted EBITDA, non-GAAP net income and non-GAAP net income per share, each of which the Securities and Exchange Commission has defined as a “non-GAAP financial measure.” Adjusted EBITDA, non-GAAP net income and non-GAAP net income per share have been included in this press release because they are key measures used by Yelp management and board of directors to understand and evaluate core operating performance and trends, to prepare and approve its annual budget and to develop short- and long-term operational plans. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles in the United States (“GAAP”).

    Adjusted EBITDA and non-GAAP net income have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of Yelp’s financial results as reported under GAAP. Some of these limitations are:

    • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA and non-GAAP net income do not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
    • adjusted EBITDA does not reflect changes in, or cash requirements for, Yelp’s working capital needs;
    • adjusted EBITDA and non-GAAP net income do not consider the potentially dilutive impact of equity-based compensation;
    • non-GAAP net income does not reflect the impact of the valuation allowance release in the fourth quarter of 2014 or the recording of the valuation allowance in the fourth quarter of 2015;
    • adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to Yelp; and
    • other companies, including those in Yelp’s industry, may calculate adjusted EBITDA and non-GAAP net income differently, which reduces their usefulness as comparative measures.

    Because of these limitations, you should consider adjusted EBITDA, non-GAAP net income and non-GAAP net income per share alongside other financial performance measures, including various cash flow metrics, net income (loss) and Yelp’s other GAAP results. Additionally, Yelp has not reconciled its adjusted EBITDA outlook for the first quarter and full year 2016 to its net income (loss) outlook because it does not provide an outlook for other income (expense) and provision for income taxes, which are reconciling items between net income (loss) and adjusted EBITDA. As items that impact net income (loss) are out of Yelp’s control and cannot be reasonably predicted, Yelp is unable to provide such an outlook. Accordingly, reconciliation to net income (loss) outlook for the first quarter and full year 2016 is not available without unreasonable effort. For a reconciliation of historical non-GAAP financial measures to the nearest comparable GAAP measures, see the non-GAAP reconciliations included below in this press release.

    Forward-Looking Statements

    This press release contains forward-looking statements relating to, among other things, the future performance of Yelp and its consolidated subsidiaries that are based on Yelp’s current expectations, forecasts and assumptions and involve risks and uncertainties. These statements include, but are not limited to, statements regarding expected financial results for the first quarter and full year 2016, Yelp’s priorities for 2016 and its ability to execute against those priorities, CFO transition and timing thereof, Yelp’s ability to improve its margins, Yelp’s ability to capture a meaningful share of the large local market, the future growth in Yelp revenue and continued investing by Yelp in its future growth, Yelp’s ability to drive daily usage and engagement (particularly on mobile), increase awareness of Yelp among consumers, and deliver value to local businesses, Yelp’s ability to increase transactions completed on its platform, Yelp’s ability to take advantage of trends toward app usage and native advertising and to become the leading destination for consumers connecting with great local businesses. Yelp’s actual results could differ materially from those predicted or implied and reported results should not be considered as an indication of future performance. Factors that could cause or contribute to such differences include, but are not limited to: Yelp’s limited operating history in an evolving industry; Yelp’s ability to generate sufficient revenue to regain profitability, particularly in light of its significant ongoing sales and marketing expenses; Yelp’s ability to successfully manage acquisitions of new businesses, solutions or technologies, such as Eat24, and to integrate those businesses, solutions or technologies; Yelp’s reliance on traffic to its website from search engines like Google and Bing; Yelp’s ability to generate and maintain sufficient high quality content from its users; maintaining a strong brand and managing negative publicity that may arise; maintaining and expanding Yelp’s base of advertisers; changes in political, business and economic conditions, including any European or general economic downturn or crisis and any conditions that affect ecommerce growth; fluctuations in foreign currency exchange rates; Yelp’s  ability to deal with the increasingly competitive local search environment; Yelp’s need and ability to manage other regulatory, tax and litigation risks as its services are offered in more jurisdictions and applicable laws become more restrictive; the competitive and regulatory environment while Yelp continues to expand geographically and introduce new products and as new laws and regulations related to Internet companies come into effect; Yelp’s ability to timely upgrade and develop its systems, infrastructure and customer service capabilities. The forward-looking statements in this release do not include the potential impact of any acquisitions or divestitures that may be announced and/or completed after the date hereof.

    More information about factors that could affect Yelp’s operating results is included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Yelp’s most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q at http://www.yelp-ir.com or theSEC’s website at www.sec.gov. Undue reliance should not be placed on the forward-looking statements in this release, which are based on information available to Yelp on the date hereof. Yelp assumes no obligation to update such statements.

    Investor Relations Contact Information
    Wendy Lim, Ronald Clark, Allie Dalglish
    (415) 635-2412
    ir@yelp.com

    Media Contact Information
    Shannon Eis
    (415) 635-2478
    seis@yelp.com

     

    Yelp Inc.
    Condensed Consolidated Balance Sheets
    (In thousands)
    (Unaudited)
    December 31, December 31,
    2015 2014
    Assets
    Current assets:
    Cash and cash equivalents $         171,613 $        247,312
    Short-term marketable securities 199,214 118,498
    Accounts receivable, net 52,755 35,593
    Prepaid expenses and other current assets 19,700 19,355
    Total current assets 443,282 420,758
    Long-term marketable securities – 38,612
    Property, equipment and software, net 80,467 62,761
    Goodwill 172,197 67,307
    Intangibles, net 39,294 5,786
    Restricted cash 16,486 17,943
    Other assets 3,701 16,483
    Total assets $         755,427 $        629,650
    Liabilities  and stockholders’ equity
    Current liabilities:
    Accounts payable $             3,388 $            1,398
    Accrued liabilities 43,458 29,581
    Deferred revenue 2,931 2,994
    Total current liabilities 49,777 33,973
    Long-term liabilities 12,030 7,527
    Total liabilities 61,807 41,500
    Stockholders’ equity
    Common stock – –
    Additional paid-in capital 774,022 627,742
    Accumulated other comprehensive loss (13,519) (5,609)
    Accumulated deficit (66,883) (33,983)
    Total stockholders’ equity 693,620 588,150
    Total liabilities and stockholders’ equity $          755,427 $         629,650

     

    Yelp Inc.
    Condensed Consolidated Statements of Operations
    (In thousands, except per share amounts)
    (Unaudited)
    Three Months Ended Twelve Months Ended
    December 31, December 31,
    2015 2014 2015 2014
    Net revenue $ 153,731 $ 109,887 $ 549,711 $ 377,536
    Costs and expenses
    Cost of revenue (1) 15,000 7,286 51,015 24,382
    Sales and marketing (1) 87,535 53,580 301,764 201,050
    Product development (1) 28,970 19,076 107,786 65,181
    General and administrative (1) 20,659 16,662 80,866 58,274
    Depreciation and amortization 7,980 5,291 29,604 17,590
    Total costs and expenses 160,144 101,895 571,035 366,477
    Income (Loss) from operations (6,413) 7,992 (21,324) 11,059
    Other income (expense), net 40 38 386 221
    Income (Loss) before income taxes (6,373) 8,030 (20,938) 11,280
    Benefit (Provision) for income taxes (15,856) 24,698 (11,962) 25,193
    Net income (loss) attributable to common stockholders $ (22,229) $   32,728 $ (32,900) $   36,473
    Net income (loss) per share attributable to common stockholders:
    Basic $     (0.29) $       0.45 $     (0.44) $       0.51
    Diluted $     (0.29) $       0.42 $     (0.44) $       0.48
    Weighted-average shares used to compute net income (loss) per share attributable to common stockholders:
    Basic 75,372 72,645 74,683 71,936
    Diluted 75,372 77,211 74,683 76,712
    (1) Includes stock-based compensation expense as follows:
    Three Months Ended Twelve Months Ended
    December 31, December 31,
    2015 2014 2015 2014
    Cost of revenue $        336 $        207 $     1,117 $        729
    Sales and marketing 5,803 4,038 21,962 15,083
    Product development 6,314 4,508 23,431 14,804
    General and administrative 3,519 3,063 14,332 11,657
    Total stock-based compensation $   15,972 $   11,816 $   60,842 $   42,273

     

    Yelp Inc.
    Condensed Consolidated Statements of Cash Flows
    (In thousands)
    (Unaudited)
    Twelve Months Ended
    December 31,
    2015 2014
    Operating activities
    Net income (loss) $ (32,900) $  36,473
     Adjustments to reconcile net income (loss) to net cash provided by operating activities:
      Depreciation and amortization 29,604 17,590
      Provision for doubtful accounts and sales returns 16,788 7,238
      Stock-based compensation 60,842 42,273
      Recording (Release) of valuation allowance 20,341 (28,197)
      Loss on disposal of assets and website development costs 213 4
      Premium amortization, net, on securities held-to-maturity 1,190 349
      Excess tax benefit from share-based award activity (6,583) (1,834)
      Realized (gain) on investments (4) –
    Changes in operating assets and liabilities:
    Accounts receivable (25,279) (21,291)
    Prepaid expenses and other assets (22,703) (4,011)
    Accounts payable, accrued expenses and other liabilities 15,894 8,927
    Deferred revenue (41) 411
    Net cash provided by operating activities 57,362 57,932
    Investing activities
    Acquisition, net of cash received (73,422) (14,340)
    Purchases of property, equipment and software (31,127) (29,054)
    Capitalized website and software development costs (11,734) (11,349)
    Change in restricted cash 1,404 (14,764)
    Purchase of intangibles (647) (1,724)
    Proceeds from sale of property and equipment 134 14
    Purchases of marketable securities (246,160) (210,459)
    Maturities of marketable securities 202,870 53,002
    Net cash used in investing activities (158,682) (228,674)
    Financing activities
    Issuance of common stock upon exercise of employee stock options 12,255 –
    Proceeds from issuance of common stock from share-based awards – 20,164
    Proceeds from issuance of common stock for Employee Stock Purchase Plan 8,911 8,869
    Repurchase of common stock (482) (1,318)
    Excess tax benefit from stock-based award activity 6,583 1,834
    Contingent consideration payments (825) –
    Net cash provided by financing activities 26,442 29,549
    Effect of exchange rate changes on cash and cash equivalents (821) (1,259)
    Change in cash and cash equivalents (75,699) (142,452)
    Cash and cash equivalents – Beginning of period 247,312 389,764
    Cash and cash equivalents – End of period $ 171,613 $ 247,312

     

    Yelp Inc.
    Reconciliation of GAAP to Non-GAAP Financial Measures
    (In thousands)
    (Unaudited)
    Three Months Ended Twelve Months Ended
    December 31, December 31,
    2015 2014 2015 2014
    Adjusted EBITDA:
    Net income (loss) $ (22,229) $ 32,728 $ (32,900) $ 36,473
    (Benefit) provision for income taxes 15,856 (24,698) 11,962 (25,193)
    Other (income) expense, net (40) (38) (386) (221)
    Depreciation and amortization 7,980 5,291 29,604 17,590
    Stock-based compensation 15,972 11,816 60,842 42,273
    Adjusted EBITDA $  17,539 $ 25,099 $  69,122 $ 70,922
    Non-GAAP Net Income (Loss) and Income (Loss) per share:
    GAAP net income (loss) $ (22,229) $ 32,728 $ (32,900) $ 36,473
       Add back: stock-based compensation 15,972 11,816 60,842 42,273
       Add back: amortization of intangible assets 1,718 550 6,475 2,448
       Less: tax effect of stock-based compensation & amortization of intangible assets  

    (6,827)

    		  

    (4,422)

    		  

    (25,853)

    		  

    (16,654)
       Add back: recording (release) of valuation allowance (net of tax) 20,341 (26,197) 20,341 (28,197)
    NON-GAAP NET INCOME $    8,975 $ 14,475 $  28,905 $ 36,343
    GAAP diluted shares 78,166 77,211 78,078 76,712
    NON-GAAP NET INCOME PER SHARE $      0.11 $     0.19 $      0.37 $     0.47

     

    Logo – http://photos.prnewswire.com/prnh/20150714/236436LOGO

     

    To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/yelp-announces-fourth-quarter-and-full-year-2015-financial-results-300216659.html

    SOURCE Yelp Inc.

    Image via Yelp (Flickr)

  • Yelp Puts ‘Extortion Conspiracy Theory’ Back Into Spotlight

    Well, the Yelp “extortion” (or lack thereof) narrative is back in the news. For years, the company has been accused by business owners of burying positive reviews when the owners decline to pay for advertising on Yelp. Yelp has always strongly denied such things, pointing to failed lawsuits, studies, etc., but the stories and accusations have never gone away.

    Do you believe Yelp has proven beyond a reasonable doubt that such accusations are completely without merit? Share your thoughts in the comments.

    So why are we talking about this now? Mostly because Yelp itself is. The company has a new blog post out claiming that the “Yelp extortion conspiracy theory” has been “debunked…again.”

    More accurately, Yelp played some phone calls for a guy who works for an organization that a Yelp sales exec is the board member of, and it was concluded that there was no wrongdoing. It’s unlikely that this is going to make the narrative disappear.

    Vince Sollitto, SVP Communications and Public Affairs, writes, “Sometimes people claim Yelp gives more favorable ratings to businesses who advertise on our platform, and some even allege that Yelp threatens to manipulate ratings and reviews of those who don’t advertise. These claims are of course false and have already been scrutinized by courts of law, academic studies, and a closed FTC investigation. They are sensational, however, and the media has often repeated them at face value without doing any investigating or even real reporting. Until today.”

    He’s referring to a report from Greg Sterling, who wrote about a plumber he spoke with who told him “he had been solicited to advertise on the site and that he declined but was told by the telephone sales rep that his reviews could potentially be affected if he didn’t.”

    Yelp played 25 – 30 calls from Yelp to this plumber (only the Yelp side of the conversations are recorded) and concluded:

    There was nothing that sounded like a threat or any suggestion that reviews would be removed or otherwise altered by Yelp if the guy didn’t advertise. There wasn’t anything that could be construed as even implying that.

    If you’re a true conspiracy theorist you might now be inclined to believe that Yelp edited the records or omitted key conversations. But I can tell you it did not; I listened to the entire tiresome sequence of calls.

    Sterling says he believes Yelp’s version of the events after being “exposed to evidence that supported it.”

    Phil Rozek says in the comments on Sterling’s post, “Most of the time (in my experience), business owners’ complaints boil down to, ‘I said no to advertising, and then my reviews started disappearing.’ They wonder why reviews that initially got past the filter got filtered post facto, after the chat with the sales rep. It’s less often that they claim Yelp actually voiced something resembling a threat. I do think there are some rogue Yelp reps who gave business owners a shakedown, but I’ve seen nothing that to make me think it’s systemic.”

    Sterling replied to say, “One would assume that Yelp would aggressively stamp out any rogue sales people at this point to protect its reputation.”

    Rogue salespeople or not, Yelp’s defense and Sterling’s post may appear to “debunk” this particular plumber’s claim, but don’t really do much to do so for the common complaint Rozek speaks of.

    Something else worth noting here is that Sterling is the VP of Strategy and Insights for the Local Search Association, which is described as “a not-for-profit industry association of media companies, agencies and technology providers.” One of the board members for this association is Yelp Chief Revenue Officer Jed Nachman.

    From a Local Search Association press release from last year:

    Jed Nachman, Senior Vice President of Revenue, Yelp. Jed has been with Yelp since early 2007 and is responsible for leading Yelp’s rapidly growing sales, client services, and revenue operations groups, which span across four domestic locations as well as Europe. (emphasis ours).

    Since then, Nachman has been promoted to Chief Revenue Officer. This happened just last month when Yelp CEO Jeremy Stoppelman wrote:

    Since joining Yelp as Head of Local Sales in 2007, Jed has built our sales organization, including client services and revenue operations, from 10 to over 2000 team members. Along the way, Jed and his team have grown Yelp revenue from $500 thousand to $500 million. He has also been an integral member of our executive team — and helped establish our positive, energetic and highly accountable company culture. Now as Chief Revenue Officer, Jed will lead our local advertising business, take a more prominent role in company-wide planning and help push the company past the $1 billion revenue milestone.

    While there are many companies besides Yelp involved with the Local Search Association (which Nachman’s LinkedIn profile still says he is currently a part of), it certainly seems worth mentioning that the organization is tied to Nachman, even if Yelp didn’t deem it so for its blog post on the matter, which simply refers to Sterling as a “well-known analyst and thought leader”.

    To be clear, I don’t bring any of this up to discredit Sterling in any way. I’ve enjoyed his reporting on the search industry for many years. Yelp’s description of him is not wrong. It just leaves out his LSA connection, which Sterling does highlight in his own bio.

    In other words, I’m not implying that Sterling’s report is without merit. It just seems a little disingenuous on Yelp’s part to hold up a report from a guy who leads strategy for an organization with a direct connection to a guy who leads sales at Yelp as the only example of “real reporting” on this topic, especially considering that there’s a feature-length documentary full of interviews expected to be released soon.

    It of course remains to be seen whether the doc, titled “Billion Dollar Bully,” will be able to show us any hard hitting evidence to back up the claims so many people have made, but those who have been following the story for years will no doubt be very interested to see what is presented.

    Prost Production, the company behind the film did provide an update last week:

    We initially thought we would be finished filming this summer, but in true documentary fashion, the story has lead us down many paths that we felt compelled to follow. With all the footage we have acquired, we have been structuring, restructuring, and structuring again the story so that it is told in the best possible way.

    We thought we were done with production in November, but once again, an interview popped up that we couldn’t miss out on and were out filming just last Sunday. Now, we are 99.9% certain we are completely done! The film is near picture lock but needs a little more tweaking. In a few weeks we will be sharing a cut of the film with Kickstarter backers who contributed at the Executive Producer level. We hope to be sharing a finished project with everyone not too long after that!

    Thank you again for your interest in this project. We want to ensure this story is factually-based and done correctly. It takes time to get there, especially when this is such a grassroots effort with a very small crew. It would be a disservice to all those who have participated in the making of this film (supporters, interviewees, etc) if we put out something quickly just for the sake of having a movie. We look forward to sharing details soon about when and where it can be seen.

    I encourage you read Sterling’s post here and check out Billion Dollar Bully when it is released, which will almost certainly present a very different side of the story.

    In other Yelp news, the company announced that it has issued a new round of consumer alerts warning people about 37 businesses busted for violating Yelp policies.

    What do you make of Yelp’s defense? Do you expect the documentary to provide any real evidence? Discuss.

    Image via Yelp (Flickr)

  • Yelp Shows Users View Counts For Their Reviews

    Yelp Shows Users View Counts For Their Reviews

    Yelp announced that all users can now see how many people have viewed their reviews for the 90 days prior. This should only encourage people to post more reviews, because people love to see stats about the things they’ve done online.

    “For years Yelpers have been taking the time to share local insight knowing their reviews and photos help others find the best businesses out there,” says Yelp product manager Jake B. “Compliments let you know when someone finds your review especially useful, funny, or cool, but that’s just a fraction of the people your reviews are reaching. Now users in all Yelp countries can see just how many people are benefiting from their contributions on Yelp with the addition of total views for the last 90 days of their reviews, photos, and profile. These stats are visible only to the user and can be seen on Yelp desktop and mobile. Views are compiled from activity across all platforms.”

    “We know it’s a commitment to be a Yelper, and we’re continually grateful for the time and effort our community puts into sharing their wisdom,” he adds. “It’s fun to share your opinions, but it’s even more fulfilling to know that thousands of people are led to the best ham sandwich they’ve ever tasted, or the small bridal shop where they purchased the perfect wedding gown, or have avoided some wonky dental work, all thanks to the experiences you and your fellow Yelpers shared.”

    The company said in October that its cumulative reviews grew 35% year over year, reaching 90 million in Q3.

    Images via Yelp, Yelp’s Flickr

  • Yelp Reviews Under Government Spotlight

    Yelp Reviews Under Government Spotlight

    On Tuesday, Yelp and other members of the Consumer Electronics Association, including Zenefits and R Street Institute, briefed Congressional staff, businesses, and advocacy organizations on SLAPPs (Strategic Lawsuits Against Public Participation) and what it calls “chilling impacts” of lawsuits filed “to censor or intimidate critics.”

    In September, a Yelp reviewer was ordered to pay a business owner $1,000 after leaving a series of comments on Yelp and a local site, which a court found ventured beyond free speech and into defamation.

    Do you think the court got that decision right? Let us know what you think.

    Yelp has said repeatedly that it doesn’t want reviewers to be afraid to leave negative reviews, and the company seems to fear that cases like this could make them think twice.

    “We frequently find that a better course of action, rather than suing your customers, is publicly responding to a critical review in the same forum,” a Yelp spokesperson said in relation to that case.

    “Seventy percent of people online use a review site before making a purchasing decision,” said Laurent Crenshaw, director of policy, Yelp. “These platforms allow users to make better purchasing decisions and make businesses more responsive to consumers. For this virtuous cycle to continue, we can’t have chilled speech.”

    According to a press release, the CEA and its members shared with Congressional staff how SLAPPs were used to stifle free speech in many areas. In states without Anti-SLAPP statutes, online reviewers can face “prolonged lawsuits simply for expressing their opinion,” it says.

    Yelp has engaged in lobbying efforts on anti-SLAPP legislation that would prevent such suits. Earlier this year, the company attacked casino mogul Steve Wynn for supporting legislation that would make it easier to sue people for bad reviews.

    “We live in an age where public comment forums are getting a lot of feedback,” said Mike Godwin, innovation policy director and general counsel at R Street Institute. “How do we keep those channels open? States are the laboratories of democracy and 28 states have already put in place protection from SLAPPs.”

    The panel specifically championed the SPEAK FREE Act proposed by Representatives Blake Farenthold (R-TX) and Anna Eshoo (D-CA).

    “We thank Representatives Farenthold, Eshoo, and others for advancing federal anti-SLAPP legislation,” said Michael Hayes, manager of government relations, CEA. “Whether you express your opinion online or offline, you shouldn’t have to worry about the threat, and cost, of a SLAPP. We need a federal fix to ensure that these bogus lawsuits no longer undermine Americans’ free speech.”

    On Wednesday, the Senate Commerce, Science, and Transportation Committee was held to discuss “How Gagging Honest Reviews Harms Consumers and the Economy” and the Consumer Review Freedom Act.

    Crenshaw talked about this on the Yelp blog:

    Thankfully, Congress is taking an important step in protecting consumers’ right to free speech with the Consumer Review Freedom Act of 2015 (S. 2044). This bipartisan effort, introduced by Senators John Thune (R-SD), Brian Schatz (D-HI) and Jerry Moran (R-KS), would nullify any of the non-negotiable clauses that allow businesses to slap consumers with large fines for sharing their honest feedback.

    The protection of free speech, both offline and on, has always been, and should continue to be, a top priority of the government. We at Yelp applaud the Senate Commerce, Science, and Transportation Committee for their dedication to this issue and look forward to a long future where people can share their firsthand experiences with local businesses without facing the threat of fine or unfair retribution.

    This is a battle Yelp has been dealing with for years as businesses who feel they’ve been harmed by user reviews have repeatedly sought retaliation by way of lawsuit. As Yelp has repeatedly pointed out, this often results in a “Streisand Effect,” in which the business ends up getting more negative press as a result of their efforts and ultimately harms itself further.

    Do you agree with Yelp on this issue, or do you worry that any government action will result in negative effects? Share your thoughts in the comments.

    Image via Yelp

  • Yelp Experiments With Categorized Photo Browsing

    Yelp Experiments With Categorized Photo Browsing

    Yelp announced a new way to browse photos – by category. You can now browse by things like food, interior, outside, drink, and menu.

    The feature comes as the company has been experimenting with using neural networks to learn more about the content in user photos.

    “Each photo a Yelp community member takes provides meaningful information to other people, but sometimes the exact photo you need gets buried under several screenfulls of other photos (I’m looking at you Food),” says product manager Frances Haugen.

    You can utilize the feature by clicking “See all photos” as pictured above. It will show you a grid of images for different categories.

    grid

    For now, it’s just an experiment with restaurants, but the company says it will be looking for other categories of businesses that make sense for the feature. It also wants users to tweet category suggestions at them.

    The company notes that users might find photos that are in the wrong category. You can flag these, and tell Yelp they were in the wrong one.

    Image via Yelp

  • Government Agencies Get Yelp-Friendly

    Government Agencies Get Yelp-Friendly

    Yelp announced that it has entered into an agreement with the federal government to enable federal agencies and offices to claim their Yelp pages, read, and respond to reviews.

    That includes the TSA:

    yelp-tsa

    “We encourage Yelpers to review any of the thousands of agency field offices, TSA checkpoints, national parks, Social Security Administration offices, landmarks and other places already listed on Yelp if you have good or bad feedback to share about your experiences,” says Yelp’s Laurent Crenshaw. “Not only is it helpful to others who are looking for information on these services, but you can actually make an impact by sharing your feedback directly with the source.”

    “It’s clear Washington is eager to engage with people directly through social media,” Crenshaw adds. “Earlier this year a group of 46 lawmakers called for the creation of a ‘Yelp for Government’ in order to boost transparency and accountability, and Representative Ron Kind reiterated this call in a letter to the General Services Administration (GSA). Luckily for them, there’s no need to create a new platform now that government agencies can engage directly on Yelp.”

    The government agreement will continue to roll out over the coming months.

    Yelp considers this all pat of its broader “Consumer Protection Initiative,” which also encompasses its recent announcement about using health care data from ProPublica as well as its efforts to show restaurant health scores.

    Image via Yelp

  • Yahoo: We’re Still Using Yelp Reviews [Updated]

    Yahoo: We’re Still Using Yelp Reviews [Updated]

    Update 2: Blumenthal points to another response from Yahoo on reddit:

    “Thanks for pointing this out! I work for Yahoo, and I’ve reported this to our Yahoo Local team*. They’ll be taking a look at this for sure. Yahoo Local doesn’t use the Yelp API, rather we have a data feed from them that we merge into this feed. They’ll be examining this to see if and what the problem may be. Thanks again for pointing this out to us!

    Update: A spokesperson for Yahoo tells us the company is not running any tests that would remove Yelp’s content, and that it’s possible that the listings I tried just didn’t have listings with Yelp reviews (presumably same with Blumenthal’s).

    As a matter of fact, Blumenthal noted in the comments of his own post that he is now seeing some Yelp listings. False alarm apparently.

    Early last year, Yahoo and Yelp announced a partnership in which Yahoo would begin showing Yelp reviews in its local search results. Some businesses were frustrated with the move claiming Yahoo had trashed “years of positive feedback from customers” in favor of Yelp’s reviews, which have of course been controversial on their own.

    That didn’t stop the partnership from carrying on. Yahoo would go on to feature Yelp reviews for all kinds of local search results. While we haven’t yet heard anything about it from the companies, it looks like Yahoo is no longer using Yelp reviews, and is once again using its own local content.

    Screen Shot 2015-08-04 at 12.09.54 PM

    This was pointed out by local search watcher Mike Blumenthal, who wrote in a brief blog post, “It appears that Yahoo is no longer serving up Yelp reviews. Drop maps, change their name and poof. Your old Yahoo reviews are back.”

    Yahoo announced the closure of maps.yahoo.com in June, by the way. It noted at the time, “However, in the context of Yahoo search and on several other Yahoo properties including Flickr, we will continue to support maps. We made this decision to better align resources to Yahoo’s priorities as our business has evolved since we first launched Yahoo Maps eight years ago.”

    That announcement made no mention of ditching Yelp.

    We’ve reached out to Yahoo for content, and will update accordingly.

    Images via Yahoo

  • Amazon Is Changing How It Shows Reviews And How Ratings Work

    Amazon Is Changing How It Shows Reviews And How Ratings Work

    Amazon is reportedly changing how it displays customer reviews on product pages in the U.S. It’s using machine learning to figure out which reviews are most helpful to users, and giving those more weight in the algorithm. It’s also putting more weight on newer reviews.

    This is according to a report from CNET, which interviewed Amazon spokesperson Julie Law about it. According to her, the system will “learn what reviews are most helpful to customers,” and “improve over time” to “make customer reviews more useful”.

    The new system, which also influences products’ star ratings, apparently went into effect on Friday, though it may not be noticeable by many right away. Products’ star ratings are expected to change more frequently due to the way reviews are now weighted. CNET’s Ben Fox Rubin reports:

    The new platform was something the company looked at “very closely” before instituting, Law said, though she declined to say how long Amazon had been developing it.

    “It’s just meant to make things that much more useful,” Law said, “so people see things and know it reflects the current product experience.”

    While it’s still early, I suspect we’ll be hearing a lot of feedback from people who have products listed on the site. Reviews – especially the ones that are most visible – can make or break a product’s sales, and I’ll be surprised if we don’t see some anger arise from this.

    Ultimately, the system should better serve customers if it works as it’s supposed to, but anytime there’s a major change like this that has a direct effect on others’ ability to make money, there’s almost always a built-in controversy. We’ll see how this one plays out.

    Image via Amazon

  • Yelp Tells Businesses How To Respond To Reviews

    Businesses have a tricky relationship with Yelp. On the one hand, it can be a great way for customers to find a business, and a positive Yelp presence can encourage the customer to actually visit. On the flipside, negative reviews can be very damaging, and have led to plenty of defamation suits.

    Do you interact with negative reviews of your business? What approach do you take? Let us know in the comments.

    Yelp is now giving some advice to business owner about how they should response to reviews. Senior manager of local business outreach at the company wrote a blog post as a “how-to guide”. Within this are “two important things you should know about responding to reviews on Yelp”. Remmers writes:

    Always respond to reviews in a diplomatic, polite way. You can respond to both your negative and positive reviews on Yelp. You’re also able to respond to each review either privately or publicly. A private message is rather like a personal email and is only visible to that individual reviewer and you. It’s ideal for thanking patrons and also a good first step to find out more information from a dissatisfied customer. The other option is a public message which is visible to everyone. Make sure when posting a public response, that you thank the reviewer for their feedback, state your policies and address any of their concerns.

    Negative review? Although around 80% of the reviews on Yelp are 3 stars or higher, there is a chance you may get a negative review at some point. For starters, don’t send the reviewer a defensive private message or post something publicly accusing the reviewer of being a fraud. It’s viewed negatively by other consumers that encounter it and ends up only drawing more attention to the review. Instead, send the reviewer a private message to determine if they’re willing to connect with you privately to provide more details of what may have transpired.

    Last year, as one defamation suit was making headlines, Yelp told users not to be afraid to leave negative reviews.

    “It’s important to keep in mind that the First Amendment guarantees the rights of consumers to express their opinion about a business and honestly describe their experience,” wrote Yelp Senior Director of Litigation Aaron Schur. “These strong protections are why these suits are unlikely, especially when a reviewer has thoughtfully shared their views (Yelp provides guidance on how to do this in our Content Guidelines). We find the most useful reviews include a rich narrative, a wealth of detail and perhaps a helpful tip for others who are looking to spend their hard-earned money at that local business.”

    It’s in Yelp’s best interest that negative reviews exist, because who would trust a site where all reviews are positive? You’re going to get negative reviews. Addressing them the right way, however, could help you save a significant amount of space and help you avoid the Streisand effect.

    About six months ago, Yelp launched the Yelp for Business Owners app to make it easier for businesses to keep up with reviews. Available on Android and iOS, it notifies business owners in real time of new Yelp messages and reviews so businesses can respond in a timely fashion.

    “Since launching in June of 2014, consumers are now sending an average of 55,000 messages each month to businesses through our free Message the Business tool,” Yelp said at the time. . “With more than 64% percent of Yelp searches done on mobile and 73 million monthly unique visitors using Yelp via their mobile device as of Q3 2014, it’s clear there’s a demand to conduct these conversations on the go.”

    Business owners can also use the new app to view their business page activity, such as the number of user views and customer leads they have generated over the past 30 days. They can respond to reviews by private message or public comment, and respond to customer inquiries from the Message the Business feature. Advertisers can also use the app to view reports on ad clicks from Yelp users.

    Earlier this month, Yelp put out a call for small business owners to volunteer for its Small Biz Advisory Council. Specifically, they’re looking for Yelp aficionados who wish to act as representatives for business owners around the world and share insights with Yelp execs.

    According to the company, those selected will be able to make connections with small business leaders from around the world, travel to San Francisco for a summit at the Yelp headquarters, provide input on products in development, brainstorm new ideas for the company to consider, and be a resource for other business owners who have questions about Yelp’s products.

    Do agree with Yelp about how businesses should respond to reviews? Tell us what you think.

    Image via Yelp (Flickr)

  • Yelp Slaps 51 Businesses With Consumer Alert Warnings

    Yelp announced that it has activated a new round of consumer alerts, this time slapping 51 businesses with the alert messages.

    While the alerts themselves show messages to consumers who stumble upon the Yelp pages of these businesses, the real message is to the business themselves, and that message is: “We don’t tolerate review manipulation.”

    “Consumers have the right to know when someone is attempting to mislead them,” said Yelp’s Kayleigh Winslow. “For example, before heading in for LASIK eye surgery you would probably want to know that a very large number of five-star reviews for King LASIK came from the same IP address used to claim the business owner’s account. Likewise, you’d probably like a heads up that Luminere Esthetics & Wellness was caught offering $400 in exchange for removing a negative review of the business before stopping by for a waxing appointment (yikes).”

    “On top of giving consumers a false perception of the place where they are about to spend their money and violating Yelp’s Terms of Service, writing a testimonial without revealing you’ve been compensated is also false advertising,” she added.

    The warnings stay up on Yelp business pages for 90 days with a link to the evidence Yelp found. The company says it has found hundreds of instances of people engaged in shady reviewing practices since it started the consumer alerts.

    Yelp has a team of investigators who scour the site, message boards, and classified ads for suspicious activity, such as offers to pay for good reviews. They also investigate tips from outside parties. In fact, they actively encourage users who spot such activity to report it to the company.

    The last round of consumer alerts was announced in January, when the company slapped 85 businesses with the warning messages. At least there was a substantially smaller number this time around.

    Image via Yelp

  • Yelp Aims To Better Deal With Duplicate Business Listings

    Duplicate listings have proven to be a pretty big challenge for Yelp, the company revealed in a post on its engineering blog. It’s not an issue Yelp takes lightly, and it’s putting new measures in place to help deal with it as time goes on.

    So far, under its current system, Yelp has been able to merge over 500,000 duplicate listings. The post provides some insight into how they’ve reached that number.

    “We constantly receive new business information from a variety of sources including external partners, business owners, and Yelp users,” writes software engineer Tobi Owoputi. “It isn’t always easy to tie different updates from different sources to the same business listing, so we sometimes mistakenly generate duplicates. Duplicates are especially bad when both listings have user-generated content as they lead to user confusion over which page is the “right” one to add a review or check-in to.”

    “The problem of detecting and merging duplicates isn’t trivial,” he continues. “Merging two businesses involves moving and destroying information from multiple tables which is difficult for us to undo without significant manual effort. A pair of businesses can have slightly different names, categories, and addresses while still being duplicates, so trying to be safe by only merging exact matches isn’t good enough. On the other hand, using simple text similarity measures generates a lot of false positives by misclassifying cases like: two businesses that are part of the same chain and are located close to one another; one business that is a sub-business of another (e.g. Monterey Bay Aquarium and Jellies Experience at the Monterey Bay Aquarium); a professional and the practice that they work at (e.g. Coldwell Banker and Rose Parmelee – Coldwell Banker).”

    You can dive into the process here, but Yelp plans to add language and geographical area-specific features, focus on high-impact duplicates (based on number of search result impressions), and extract its named entity and discriminative word classifiers into libraries for use in other projects.

    Yelp hopes to be able to merge all high confidence duplicate business listings and minimize the amount of human intervention with improvements to its classifier.

    Image via Yelp

  • Facebook Puts Critic Content On Restaurant Pages

    Facebook Puts Critic Content On Restaurant Pages

    It appears that Facebook is taking another step in offering an alternative to Yelp and similar services. The company has reportedly partnered with a number of content providers to show reviews from food critics on restaurants’ Facebook Pages.

    The feature is being tested according to multiple reports.

    According to the report above, Facebook has partnered with Bon Appetit, Conde Nast Traveler, Eater, New York Magazine, and the San Francisco Chronicle. so far. It shares a comment from Facebook:

    “Since reviews are such an important part of helping people make informed decisions about what to do locally, we’re excited to be incorporating a new way for people to use Facebook to find the best real-world experiences,” a Facebook spokeswoman told us in an email. “Thousands” of restaurants are included in the pilot, she said.

    While it doesn’t discuss extending this beyond restaurants, one can imagine that similar content could one day appear for different types of businesses. It would also be interesting if Facebook did with with movies. I bet the studios would love to see quotes like this one appear on their movies’ pages:

    Rarely has a remake felt more contractually obligated than the 2015 version of Poltergeist. – Brian Tallerico·Roger Ebert

    While Facebook Pages for restaurants already display reviews from people who have visited, the new feature adds another layer of authority to the content that is displayed, provided you’re one that puts a lot of stock into what critics think. The fact that negative reviews are as likely to show as positive ones could present restaurants (and potentially other businesses) with a new source of frustration on Facebook.

  • Yelp For Sale? Report Says It’s Exploring Options

    Yelp might be up for sale, according to a report from The Wall Street Journal, which says, citing people familiar with the matter, that it is working with investment bankers and has “been in touch with potential buyers” in recent weeks.

    It notes that the company could still decide against a sale, but it seems to be exploring its options. The report projects the company could get over $3.5 billion, and cites slowing growth in traffic and a marked decline in stock price since highs in March of last year.

    A spokesperson for Yelp tells WebProNews, “We don’t comment on rumors or speculation, so can add nothing further.”

    Shareholders seem to like the idea of a sale as shares quickly jumped about 8% upon the news.

    The company released its Q1 financial results last week, reporting a 55% revenue increase compared to the same quarter last year, but falling short of analysts’ expectations and sending its stock price down. Still, the company grew its cumulative reviews by 36% to 77 million, including a record 6 million reviews contributed during the quarter.

    Growth in mobile usage and the company’s sales efforts were major themes of the ensuing conference call. The company reported that average monthly mobile unique visitors grew 29% year-over-year to approximately 79 million while average monthly desktop unique visitors declined 3% to about 80 million. Combined, average monthly unique visitors grew 8% to 142 million. In other words, there are now nearly as many mobile users as desktop users, and it’s only a matter of time until the mobile number overtakes desktop.

    The company’s brand advertising revenue was down 11% year-over-year. It attributes this to the shift to programmatic advertising and the “industry’s desire to have advertising products that are disruptive to the consumer experience.”

    40% of Yelp’s local advertising revenues in Q1 came from CPC advertisers, which was up from 32% in Q4.

    It would be interesting to know which companies Yelp has been “in touch” with as potential buyers. I could speculate, but what would be the point? One question is what company would want to take on all of the legal headaches that accompany the business?

    Image via Yelp

  • Dealing With An Increasingly Mobile Yelp

    Yelp released its Q1 financial results on Wednesday with a 55% revenue increase compared to the same quarter last year, but falling short of analysts’ expectations and sending its stock price down. Still, the company grew its cumulative reviews by 36% to 77 million, including a record 6 million reviews contributed during the quarter.

    Do you expect Yelp’s increasing mobile user base to have an impact on your business? Let us know in the comments.

    Mobile Growth

    Mobile is a major growth area for Yelp, and businesses should understand the effects of that.

    The company reported that average monthly mobile unique visitors grew 29% year-over-year to approximately 79 million while average monthly desktop unique visitors declined 3% to about 80 million. Combined, average monthly unique visitors grew 8% to 142 million. In other words, there are now nearly as many mobile users as desktop users, and it’s only a matter of time until the mobile number overtakes desktop.

    Keep in mind, the ability to write reviews from mobile devices hasn’t even been around for two years. The feature hit the Yelp iPhone app in August, 2013, and then the Android app the following October.

    Last year, the company added a feature that enables users to upload videos so users can show various aspects of a business, such as ambiance, lighting, noise level, etc.

    They also added a mobile review translation feature, making content more useful for travel.

    What Yelp is saying about mobile

    CEO Jeremy Stoppelman had plenty to say about Yelp’s progress in mobile during the earnings conference call.

    “The way consumers contribute and consume content today is rapidly becoming mobile-centric,” said Stoppelman. “And as one of the first apps in the Apple App Store, we’ve been at the forefront of this trend. Mobile has been and continues to be one of our top product priorities and we’ve seen that focus result in strong mobile consumer traffic and engagement.”

    Over 50% of reviews and photos were contributed via Yelp’s mobile apps during the quarter, while mobile devices accessing the apps grew 47% year-over-year to about 16 million. According to the CEO, those are Yelp’s “most valuable and engaged” users.

    “If you fast forward a few years in to the future, you can imagine that our business is quite reliant on mobile traffic. And that’s where we frankly continue to invest a lot of our time and attention and resources particularly on the products and engineering side,” Stoppelman said during a Q&A. “And the good news is it seems to be paying off. Mobile web, if you include mobile web you’re looking at 29% year-over-year and then we talked about the app number being even stronger. So we feel good about where the business is headed but it’s certainly a period of transition where you are seeing desktop decline as users give up their desktop machines and switch over to iPhones and whatnot.”

    “One thing we’re quite encouraged by, as users do shift from desktop to mobile, particularly mobile app, we do see much higher engagement,” he said. “Just as an indicator that we’re seeing 65% of searches now are happening on mobile. We’re also seeing more and more content, I think it’s about close to 50% of content is now north of 50% of content is coming from mobile and of course a big portion of that, vast majority is coming from the mobile app.”

    He also talked about Yelp’s relationship with Apple, and how its review content is consistently surfaced through iOS functionality.

    Stoppelman even responded to a question about Google’s mobile-friendly update, saying that while it’s still too early to say for sure, there are no signs of a massive impact on Yelp’s search rankings either way. He noted that Yelp content is largely mobile-friendly, and that he doesn’t expect any significant impact one way or the other.

    What Yelp didn’t say about mobile

    What he didn’t mention is that another recent Google update has the potential to increase Yelp’s search visibility on Android. Google recently started surfacing content from apps in its search results, and if people continue to use the Yelp app, there is some potential opportunity for the company there. In fact, even since Google turned on app indexing as a signal, it has begun showing apps that users haven’t even downloaded in search results, encouraging app installs. This could very well lead to more Yelp Android app downloads.

    Another major component of Yelp’s mobile presence that they didn’t really get into on the call was the API, which gives developers the ability to pull Yelp data and use it in their own apps, potentially making your business information available in more places from mobile devices (and the web).

    Last summer, Yelp opened up its API to all developers for free, and increased the call limit to make it easier for them to use. In other words, anyone who wants to use Yelp data in their apps or website can now do so easily, without cost, and pull enough data to make actual useful Yelp-related features.

    “Thousands of companies have used Yelp’s API to build local information into their products and services, giving consumers even more access to great Yelp content, like Yelp review snippets, photos, ratings and business listing information,” said Yelp VP Business & Corporate Development Mike Ghaffary in July. “Developers have turned to Yelp because of our trusted, high-quality local data, which, through an empirical study, is shown to be more reliable and consistent than other sources of local data.”

    What can businesses do to deal with increased mobile use of Yelp?

    Well, there’s probably not a lot to do in terms of mobile Yelp optimization beyond the things that apply to the desktop. You should make sure you’ve claimed your business, and add photos, business hours, and other important information. Respond to customer reviews (in a professional manner). You can create deals or mobile check-in offers to try and increase conversions.

    “Optimizing your Yelp listing is equivalent to optimizing your website for search engines such as Google,” writes Amanda DiSilvestro at Search Engine Journal. “You want to utilize keywords in your business listing, and try to earn backlinks wherever you can either through guest posting, press releases, or better yet, naturally.”

    “Yelp also offers social features for users to help them find their friends on Yelp and see what they have been reviewing and what they recommend in any given area,” she adds. “This is more of a feature for users than businesses, but it’s good to know it exists in case your business ever wants to check out what people are saying about businesses in the area (your competition maybe?). You can check out these social features by clicking Find Friends’ at the top of a Yelp page. If you don’t already have an account, it will prompt you to add in information and confirm your email address. You’ll be set to go in less than two minutes.”

    DiSilvestro also recommends including a link to your Yelp page on your website and/or in your email signature.

    Just be careful about asking for Yelp reviews, because Yelp considers this spam. “Don’t Ask for Reviews” is one of Yelp’s guidelines. They have a whole page on it in their support center.

    Under the “Why does Yelp discourage businesses from asking for reviews?” section, it says:

    1. Would-be customers might not trust you. Let’s face it, most business owners are only going to ask for reviews from their happy customers, not the unhappy ones. Over time, these self-selected reviews create bias in the business listing — a bias that savvy consumers can smell from a mile away. No business is perfect, and it’s impossible to please 100% of your customers 100% of the time.

    2. Solicited reviews are less likely to be recommended by our automated software, and that will drive you crazy. Why aren’t these reviews recommended? Well, we have the unfortunate task of trying to help our users distinguish between real and fake reviews, and while we think we do a pretty good job at it with our fancy computer algorithms, the harsh reality is that solicited reviews often fall somewhere in between. Imagine, for example, the business owner who “asks” for a review by sticking a laptop in front of a customer and smilingly invites her to write a review while he looks over her shoulder. We don’t need these kinds of reviews, so it shouldn’t be a surprise when they aren’t recommended.

    It later goes on to say, “There is an important distinction between ‘Hey, write a review about me on Yelp,’ [BAD] and ‘Hey, check us out on Yelp!’ [GOOD]. It’s the difference between actively pursuing testimonials and simply creating awareness of your business through social media outlets.”

    Last last year, Yelp gave businesses their own mobile app, enabling them to get to get real-time notifications of new Yelp messages and reviews. This should help businesses keep a closer eye on their Yelp presence and be able to jump in and respond to any negatively quickly.

    In December, Yelp said consumers were sending an average of 55,000 messages each month to businesses through its Message the Business tool.

    Business owners can also use the new app to view their business page activity, such as the number of user views and customer leads they have generated over the past 30 days. They can respond to reviews by private message or public comment, and respond to customer inquiries from the Message the Business feature.

    Advertisers can also use the app to view reports on ad clicks from Yelp users.

    Overall, the more Yelp’s mobile user base grows, the more businesses are likely to be affected by Yelp, because when users can leave a quick review for a business from the device in their pocket while their experience is freshest in their mind, it only makes sense that reviews will happen more frequently.

    Yelp also expects to open up mobile ad inventory and programmatic advertising this year.

    On the earnings call, Yelp also talked about how its ramping up its salesforce and trying to get more advertisers. More on that here.

    Do you think increased mobile usage of Yelp will help your business? Discuss.

    Images via Yelp

  • Yelp Gets Legal Victory In Privacy Case (Because Subpoena Was Issued In Wrong State)

    Yelp has been embroiled in a legal battle for the past couple years as a Virginia carpet cleaning service has sought to get the names of reviewers it alleges left reviews without using the service in order to name them in a defamation suit. Things haven’t always gone Yelp’s way. It lost in the initial trial and in appeals court, and Yelp was even held in contempt.

    The Supreme Court of Virginia has now ruled of favor in Yelp, but not because of the main issues at hand, but rather because it determined a subpoena from Hadeed Carpet Cleaning should have been issued in California – Yelp’s home turf – rather than in Virginia.

    “Although we were hoping the court would rule on both jurisdictional and First Amendment grounds, this is still an important win,” said Paul Alan Levy, a Public Citizen attorney, who represented Yelp in the case. “If Hadeed turns to California courts to learn the identities of its critics, those courts will require it to show evidence to meet the well-accepted First Amendment test for identifying anonymous speakers. And so far, Hadeed has not come close to providing such evidence.”

    As usual, Yelp boasted about its legal victory on its official blog, where the company’s “senior director of litigation” Aaron Schur said:

    Hadeed undermined its own customers’ free speech rights by trying to force Yelp to reveal their private information based merely on a hunch that they might not be real clients. Fortunately, the right to speak under a pseudonym is constitutionally protected and has long been recognized for the important information it allows individuals to contribute to public discourse. This is also why The Washington Post, Gannett Co. and other media outlets joined the Reporters Committee for Freedom of the Press amicus brief, while Google, Twitter, TripAdvisor and Pinterest, the Electronic Frontier Foundation, and others also argued in favor of our efforts to protect free speech.

    Hadeed may still believe those reviews were not from his customers, but he has no evidence of this. In fact, several targeted customers also filed an Amicus brief reiterating that they were actual customers of Hadeed Carpet Cleaning and that their critical reviews were truthful representations of their consumer experiences. They feel strongly enough to come forward to stand by their reviews and share why they feel it’s important for consumers to be able to contribute their opinions online, even under a pseudonym if necessary.

    …

    Businesses that want to bully and intimidate customers who express displeasure with less than stellar consumer experiences should not be able to obtain their personal information without providing sufficient evidence that they have been wronged, which Hadeed failed to do in this case.

    Meanwhile, Yelp itself is being referred to as the “billion dollar bully” in a documentary about the company’s alleged business practices, which recently raised funding on Kickstarter. It’s unclear whether or not the film will delve into this case at all, as its main focus is on allegations by business owners that Yelp holds positive reviews hostage with aggressive ad sales tactics.

    Kaylie Milliken, the filmmaker behind Billion Dollar Bully, did put out a call for more stories about Yelp from businesses since hitting the funding goal.

    As far as Hadeed goes, Yelp says that if the carpet cleaner wants to issue a subpoena in California, it’s “happy to continue the fight,” though in the same post, it advises businesses to avoid litigation and focus on customer service and use Yelp’s tools.

  • Yelp Documentary ‘Billion Dollar Bully’ Reaches Funding Goal

    Last week, a Kickstarter campaign kicked off to raise money for a documentary called Billion Dollar Bully, which delves into accusations about Yelp’s business practices that have haunted the company for years.

    Businesses often claim that Yelp salespeople call them to try to get them to advertise, and when they decline Yelp responds by burying positive reviews and letting negative ones rise to the top. Yelp of course denies that this has ever happened, and frequently points to failed lawsuits, an FTC investigation, and a study, which it says prove that these stories are nothing more than conspiracy theories.

    Whatever the case may be, this film is moving forward, and viewers will be able to make up their own minds as to who they believe.

    The project had a goal of 60,000, and has so far raised $60,406 from 483 backers with 23 days to go. An update on the Kickstarter page from filmmaker Kaylie Milliken and associate producer Melissa Wood says:

    Again, I PROMISE to leave a thorough update tonight, but I can’t wait until then to announce that WE REACHED OUR FUNDING GOAL!!!! This is amazing!!

    But this does not mean that we’re done. $60,000 was the bare minimum amount that was needed to make this film. With each dollar that comes in, the quality and content of the film improves. Therefore, we have set our first “stretch goal” at $100,000. We need extra funding to cover:

    Travel
    – Why do we need to travel? Because we need to speak with leading experts who live all over the country. That means we need to get a minimum of three people to each destination

    Graphic Art

    Marketing

    More rewards (more backers = more rewards that need to be sent out)

    Principal Photography

    Contract Work

    We really can’t begin to thank you all enough for this AMAZING show of support! In less than two weeks, we reached our first funding goal. WOW. Please continue to spread the word!!

    Kaylie & Mellissa

    We’ll have to check out for the more detailed update.

    In case you’re curious about what Yelp thinks of this whole thing, the company’s VP of Corporate Communications appeared on CNBC opposite Milliken earlier this week, which we covered here. See that article for additional comments from Milliken as well.

    Read our initial interview with Milliken here.