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Tag: Online Reviews

  • Yelp Slaps Consumer Alerts On More Pages, Renews Them On Others

    Yelp announced on Friday that it has launched a new round of Consumer Alerts for “a handful of businesses” in its latest efforts to combat the ongoing problem of fake reviews.

    Do you think the fake review problem has gotten better since Yelp started posting Consumer Alerts? Let us know in the comments.

    Yelp first revealed the Consumer Alerts program in the fall of 2012. It’s a tool designed to fight fake reviews by showing warnings to users on the pages of businesses who have been found to pay for reviews. Users are greeted with a big notice like so:

    Yelp doesn’t kick the business out of its service, but the embarrassing warning appears on the business listing for three months. Yelp has hoped that this would serve as a deterrent, but last month, the company said it had issued 285 of the alerts with more to come.

    More indeed. Yelp’s Kristen Whisenand writes:

    We normally remove alerts after 90 days, but we won’t hesitate to renew them if we continue to see suspicious activity. That’s exactly what happened for two businesses this time around. We again found something amiss with two of the locations for Chicago-based nail salon, Azure Nails. And someone was caught red-handed yet again trying to buy reviews for Evergreen Carpet Cleaning in Los Angeles.

    This type of activity not only hurts consumers, but also honest businesses who play by the rules. Yelp’s main line of defense is our automated recommendation software which works behind the scenes at all times to recommend reliable and useful reviews. It’s unfortunate that some people are so set on gaming the system (and misleading consumers) that the additional step of posting Consumer Alerts is necessary. That said, we take our responsibility of providing trusted information very seriously, and we’ll do whatever it takes to ensure that Yelp remains helpful to consumers.

    She shares an ad the company found:

    Just how much Yelp’s Consumer Alerts are really deterring businesses from writing and acquiring fake reviews remains a mystery. Clearly’ they’re not deterring everyone, including businesses that have already been on the receiving end of the alerts.

    Earlier this year, CEO Jeremy Stoppelman talked about how the company conducts “sting operations,” where Yelpers pose as users willing to write paid reviews. He said at the time that this was only happening in the U.S. so far, but that the operations would expand into Europe.

    “It has been incredibly successful in that we have been able to catch businesses red handed,” Stoppleman said.

    Still, you have to wonder how many aren’t being caught.

    Yelp has also utilized the legal system to go after paid reviews. Last year, the company sued the site BuyYelpReview.com, and more recently Yelp sued a guy for planting fake reviews on his business page.

    A Harvard Business School study last year suggested that 16% of Yelp restaurant reviews are potentially fake, a figure Yelp says is misleading, as it used reviews Yelp identified as suspicious (not “fake”) to run its analysis.

    The company did say last year that the study’s findings “shouldn’t come as a complete surprise,” and “as consumers increasingly turn to online reviews to find a local business, the incentive to artificially improve one’s reputation also increases, but neither should the fact that Yelp has been on guard against these very same reviews from our earliest days.”

    Last fall, New York Attorney General Eric T. Schneiderman announced that nineteen companies had agreed to stop writing fake Yelp reviews and pay over $350,000 of fines.

    Yelp said at the time that it would love to work with law enforcement officials in other states to crack down on the “unethical practice” of fake review writing.

    Last month, Yelp posted its financials for the fourth quarter and full year 2013. Cuumlative reviews grew 47% from the same time the previous year to 53 million, while average unique monthly visitors grew 39% to 120 million. Active local business accounts grew 69%.

    Is the fake review problem getting better? Can users rely on the content they find on Yelp? Share your thoughts.

    Images via Yelp

  • Yelp Launches New Interface, Business Pages

    Yelp announced that it is rolling out a new site design along with a new look for business pages. Rather than making a few teaks, the’ve elected to take the “from the ground up” approach.

    The new design plays up local content contributed by Yelp users, while also making it easier to find business info.

    “Since photos are used to determine an incredible amount about a business, the new design puts them front and center,” says product manager Brad Menezes. “Instead of a small thumbnail, we’re featuring up to six big, beautiful photos of the business. Now a quick glance at a restaurant’s page can give you a feel for the dining experience, food quality and ambiance, all within mere seconds.”

    This follows changes Yelp made last year to match users’ photos with their reviews.

    “Yelp’s review highlights give you a birds-eye-view of our community’s favorite elements of a business,” says Menezes. “Because review highlights are so useful, we’ve given them a huge upgrade, mining our review data to call out the best menu items, prices and important information like whether a bar is beer and wine only. Looks like we should head to Tataki South during happy hour, try the Garlic Edamame to start and order the one-of-a-kind Extinguisher Roll (yum!).”

    They’ve also adjusted the column width and font size to make it easier to read reviews, while adding large photos in-line.

    In other Yelp news, the company has partnered with Yahoo to integrate its reviews and listings into Yahoo local search results.

    Images via Yelp

  • Yelp Pushes Through The Controversies With Big Growth And A 5-Star Quarter

    Whether you think it’s a great business tool or you think it’s killing your business, Yelp appears to be unstoppable, and continues to grow substantially. This week, the company released its earnings report for the fourth quarter and full year 2013, and revealed that cumulative reviews have grown 47% from the same time the previous year to 53 million, while average unique monthly visitors grew 39% to 120 million. Active local business accounts grew a whopping 69%. That’s not to mention the 72% revenue increase.

    Has Yelp been good or bad for your business? Let us know in the comments.

    The company performed so well, its stock surged, while other Internet companies like Twitter and LinkedIn saw their shares fall upon earnings releases this week. Barron’s says Yelp had a “five-star Q4”.

    The release came just after a widely followed legal battle involving Yelp reviews came to a close. A building contractor sued a Yelp reviewer for defamation after she accused him of damaging her home and stealing from her. Ultimately, a jury decided both parties had defamed each other, and neither was awarded damages. The business owner expressed “shock” at the outcome, while the reviewer considered it a victory for free speech.

    Last week, Yelp posted on its blog encouraging users not to be afraid to leave negative reviews, pointing out that these kinds of suits are rare.

    “But despite this press hype, 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.”

    He said, “Businesses that try to sue their customers into silence rarely prevail, end up wasting their own time and money and usually bring additional, unwanted attention to the original criticism (a phenomenon known as the Streisand effect). Many states (though, unfortunately not Virginia) have laws designed to further protect consumers from being intimidated or silenced by these types of lawsuits. These Anti-SLAPP laws allow consumers to quickly end meritless lawsuits and require the business to pay the consumer’s legal fees when the business loses.”

    Anti-SLAPP law is a focus of new Yelp efforts in Washington. The company hired lobbyist Laurent Crenshaw, who is lobbying for the cause, which would prevent strategic lawsuits against public participation.

    This week, Yelp also became part of the Internet Association, also aimed at helping shape Internet policy. It includes Airbnb, Amazon, AOL, eBay, Expedia, Facebook, Gilt, Google, IAC, LinkedIn, Lyft, Monster Worldwide, Netflix, Practice Fusion, Rackspace, reddit,Salesforce.com, SurveyMonkey, TripAdvisor, Twitter, Uber Technologies, Inc., Yahoo!, and Zynga.

    “Yelp is a welcome and notable addition to The Internet Association. Yelp is a perfect example of how the Internet has transformed small business for the better and how the Internet provides economic value throughout the economy. Yelp’s listings, ratings and reviews have revolutionized the way consumers find businesses and the way small businesses do operate,” said Michael Beckerman, President and CEO of The Internet Association. “With 85 percent of consumers reading online reviews to find local businesses, Yelp’s online review service brings consumers closer to small businesses and local economies. Having them share their story — and advocating for issues like anti-SLAPP and protecting free speech online — strengthens The Internet Association’s voice as we educate policymakers on the impact of the Internet upon communities worldwide.”

    The Virginia case and Yelp-related lawsuits in general were brought up in the Q&A portion of the earnings call, and CEO Jeremy Stoppelman indicated that suits have basically done nothing to hurt its business. He said Yelp continues to see great user engagement, and that the company does everything it can to protect free speech online (the company was recently ordered to identify anonymous reviewers). According to Stoppleman, the number of cases it sees for its site is “extremely rare.”

    “They just don’t impact our business,” he said.

    Fortune appears to be shining on the company this week. In addition to its own stellar financial performance and subsequent reaction from investors, the EU announced what could be the end of a lengthy antitrust probe into Google’s search business, and the concessions the search giant is making include what could amount to a great deal more traffic for Yelp in Europe.

    On some types of search results, like local business queries, Google will highlight three alternative sites to find results at the top of the results page. As you can see below from the example the EU provided, this includes Yelp. That gives the company a great deal more visibility in the search engine. As the company discussed on the earnings call, international expansion – especially in Europe – is one of Yelp’s top priorities.

    Yelp in Google

    It’s possible that Google is already sending an increasing amount of traffic to Yelp. On the call, one analyst asked about visibility improving in Google search results on mobile. Stoppelman kind of dodged the question, simply saying they’ve had great performance from their mobile website.

    He did note that Yelp will likely get into the app indexing so people can access content from the Yelp Android app from mobile search results.

    “I think that’s a nice feature,” he said.

    “Each year we get closer to achieving our goal of becoming the de facto local search engine for the world, and we expect more progress along this line in 2014,” Stoppelman said earlier in the call. “As smartphone and tablet usage continues to skyrocket, we’ve placed special emphasis on becoming platform agnostic so that consumers can get the same great experience on Yelp on a range of different devices.”

    Mobile has indeed become huge for Yelp in recent months, particularly as it has added the ability to review businesses from its apps.

    “In the fourth quarter, 1.1 million reviews or 30% of new reviews were posted on mobile,” said Stoppelman.

    The company says continuing to build out mobile features is a priority this year, and it’s focused on bringing all functionality from desktop to mobile.

    One analyst on the call suggested that Yelp has an issue retaining advertisers, and asked if retention is a priority. COO Geoff Donaker said the repeat rate has been hovering in the same range for quite a while, but considers it a “relatively stable” metric. “Certainly, acquisition is the primary focus of our efforts,” he said, adding that they feel like they’re still getting started.

    Last summer, Yelp launched a “call to action” feature for advertisers, aimed at reducing friction in the customer-to-business transaction process. The feature, Yelp says, is driving 40,000 customer leads per week to its advertisers.

    Yelp advertising has been something of a hot button issue with businesses accusing Yelp of holding their positive reviews hostage (with ad contracts being the ransom), but Yelp has continued to deny such allegations, shrugging them off as conspiracy theories with no evidence. Still, these stories keep coming back into the spotlight.

    Either way, Yelp is only growing rapidly, and its ultimate goal is to be everywhere in the world. It’s certainly continuing to make tremendous strides toward that goal.

    For businesses who appreciate what Yelp has to offer them, the company has teamed up with the U.S. Small Business Administration, and will be hosting a series of live events and webinars over the next few months.

    Do you appreciate what Yelp does for your business? Let us know in the comments.

    Image via Yelp (Flickr)

  • Yelp Earnings Released, Revenue Up 72%

    Yelp Earnings Released, Revenue Up 72%

    Yelp just released its earnings report for Q4 and full year 2013. Net revenue was $70.7 million, up 72% year-over-year.

    The company saw strong growth across all of its revenue sources.

    Cumulative reviews reached 53 million, up 47% year-over-year. Average monthly unique visitors grew 39% year-over-year to about 120 million.

    Active local business accounts reached 67 thousand, up 69 year-over-year.

    CEO Jeremy Stoppelman said, “2013 was an outstanding year for Yelp. We enhanced the mobile experience, brought on thousands of new local business customers and completed the integration of Qype, which accelerated our European expansion. Looking to 2014, we will continue our geographic expansion, add new products and programs for our community of writers and find even more ways to drive value to business owners. ”

    As expected, mobile engagement has been significant since Yelp added the ability to leave reviews from its apps. This means businesses can potentially get a lot more reviews, as users will be inclined to leave one while they’re still in the place of business, or immediately after leaving.

    Yelp

    Here’s the release in its entirety:

    SAN FRANCISCO, Feb. 5, 2014 /PRNewswire/ — Yelp Inc. (NYSE: YELP), the company that connects consumers with great local businesses, today announced financial results for the fourth quarter ended December 31, 2013.

    (Logo: http://photos.prnewswire.com/prnh/20050511/SFW134LOGO)

    • Net revenue was $70.7 million in the fourth quarter of 2013, reflecting 72% growth from the fourth quarter of 2012
    • Cumulative reviews grew 47% year over year to approximately 53 million
    • Average monthly unique visitors grew 39% year over year to approximately 120 million*
    • Active local business accounts grew 69% year over year to approximately 67 thousand

    Net loss in the fourth quarter of 2013 was $(2.1) million, or $(0.03) per share, compared to a net loss of $(5.3) million, or $(0.08)per share, in the fourth quarter of 2012.  Adjusted EBITDA for the fourth quarter of 2013 was approximately $10.4 million, compared to $1.8 million for the fourth quarter of 2012.

    Net revenue for the full year ended December 31, 2013 was $233.0 million, an increase of 69% compared to $137.6 million in 2012.  Net loss for the full year ended December 31, 2013 was $(10.1) million, or $(0.15) per share, compared to a net loss of$(19.1) million, or $(0.35) per share, for 2012.  Adjusted EBITDA for the full year 2013 was approximately $29.4 millioncompared to Adjusted EBITDA of $4.6 million for the prior year.

    “2013 was an outstanding year for Yelp,” said Jeremy Stoppelman, Yelp’s chief executive officer.  “We enhanced the mobile experience, brought on thousands of new local business customers and completed the integration of Qype, which accelerated our European expansion.  Looking to 2014, we will continue our geographic expansion, add new products and programs for our community of writers and find even more ways to drive value to business owners. ”

    “We are very pleased with our performance in 2013,” added Rob Krolik, Yelp’s chief financial officer.  “Full year revenue growth accelerated to 69% over 2012 while we demonstrated leverage in the model with more than a six-fold increase in adjusted EBITDA.  In 2014, we will continue to invest in the business to capture the large local opportunity in front of us.”

    2013 Business Highlights

    • Yelp mobile:  Yelp enhanced the mobile consumer experience by launching new features such as a revamped Nearby function and the ability to write and post reviews from mobile.  In the fourth quarter, Yelp had approximately 53 million mobile unique visitors (which includes both mobile web and mobile app users), and 30% of new reviews were contributed through mobile devices.
    • Closing the loop with businesses:  Yelp launched a number of new products in 2013 to help close the loop with local businesses, including the Revenue Estimator, Call to Action, Customer Activity Feed and Yelp Platform.  Yelp Platform enables consumers to go from discovery to transaction directly on Yelp and is now generating over 10,000 food orders each week.  Yelp also acquired SeatMe, a web and iPad app-based reservation solution for the restaurant and nightlife categories, and integrated the reservation functionality into its mobile application and website in the fourth quarter.
    • Geographic expansion:  In Q4, Yelp completed the integration of Qype, migrating 1.8 million reviews and 1.4 million photos to Yelp from Qype Germany.  Yelp expanded its European sales efforts and is now selling Yelp products in France,Spain and Germany.  With the launches of New Zealand, the Czech Republic, Brazil and Portugal in 2013, Yelp is now available in 24 countries on five continents.

    Business Outlook

    As of today, Yelp is providing its outlook for the first quarter of 2014 and full year 2014.

    • For the first quarter of 2014, net revenue is expected to be in the range of $73.5 million to $74.5 million, representing growth of approximately 60% compared to the first quarter of 2013.  Adjusted EBITDA is expected to be in the range of $8 million to $9 million.  Stock-based compensation is expected to be in the range of $10 million to $11 million, and depreciation and amortization is expected to be approximately 5% of revenue.
    • For the full year of 2014, net revenue is expected to be in the range of $353 million to $358 million, representing growth of approximately 53% compared to the full year of 2013.  Adjusted EBITDA is expected to be in the range of $54 million to $58 million.  Stock-based compensation is expected to be in the range of $43 million to $45 million, and depreciation and amortization is expected to be approximately 5% of revenue.

    Quarterly Conference Call

    Yelp will discuss its quarterly results today via teleconference at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time).  To access the call, please dial 1 (800) 446-1671, or outside the U.S. 1 (847) 413-3362, with Passcode 36415214, 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 5, 2014 and 11:59 p.m. PT February 18, 2014 by calling 1 (888) 843-7419 or 1 (630) 652-3042, with Passcode 36415214.  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 Francisco in July 2004. Since then, Yelp communities have taken root in major metros across the U.S., Canada, UK, Ireland, France, Germany, Austria,The Netherlands, Spain, Italy, Switzerland, Belgium, Australia, Sweden, Denmark, Norway, Finland, Singapore, Poland,Turkey, New Zealand, the Czech Republic, Brazil and Portugal. Yelp had a monthly average of approximately 120 million unique visitors in the fourth quarter 2013*. By the end of the same quarter, Yelpers had written approximately 53 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.

    * Source: Google Analytics

    Non-GAAP Financial Measures

    This press release includes information relating to Adjusted EBITDA, which the Securities and Exchange Commission has defined as a “non-GAAP financial measures.” Adjusted EBITDA has been included in this press release because it is a key measure used by the Company’s 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 has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of the Company’s 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 does 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, the Company’s working capital needs;
    • adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation;
    • adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us;
    • adjusted EBITDA does not take into account restructuring and integration costs associated with our acquisition of Qype; and
    • other companies, including those in the Company’s industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

    Because of these limitations, you should consider adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income (loss) and the Company’s other GAAP results. Additionally, the Company has not reconciled its adjusted EBITDA outlook for the first quarter and full year 2014 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 the Company’s control and/or cannot be reasonably predicted, the Company is unable to provide such an outlook. Accordingly, reconciliation to net income (loss) outlook for the first quarter and full year 2014 is not available without unreasonable effort.  For a reconciliation of historical non-GAAP financial measures to the nearest comparable GAAP measures, see “Reconciliation of Net Loss to Adjusted EBITDA” included 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 the Company’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 2014, the future growth in Company revenue and continued investing by the Company in its future growth, the Company’s ability to expand geographically and build Yelp communities internationally and expand its markets and presence in existing markets, the Company’s ability to capture the large local opportunity and its plans regarding product innovation around mobile and new features, geographic expansion, and closing the loop with local businesses. The Company’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: the Company’s short operating history in an evolving industry; the Company’s ability to generate sufficient revenue to achieve or maintain profitability, particularly in light of its significant ongoing sales and marketing expenses; the Company’s ability to successfully manage acquisitions of new businesses, solutions or technologies, including Qype and SeatMe, and to integrate those businesses, solutions or technologies; the Company’s reliance on traffic to its website from search engines like Google, Bing and Yahoo!; the Company’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 the Company’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;  the Company’s ability to deal with the increasingly competitive local search environment; the Company’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 the Company continues to expand geographically and introduce new products and as new laws and regulations related to Internet companies come into effect; the Company’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 the Company’s operating results is included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s most recent Quarterly Report on Form 10-Q at http://www.yelp-ir.com or the SEC’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 the Company on the date hereof. Yelp assumes no obligation to update such statements. The results we report in our Annual Report on Form 10-K for the three months and year ended December 31, 2013 could differ from the preliminary results we have announced in this press release.

    Media Contact Information
    Yelp Press Office
    Vince Sollitto
    (415) 230-6506
    [email protected]

    Investor Relations Contact Information
    The Blueshirt Group
    Stacie Bosinoff, Nicole Gunderson
    (415) 217-7722
    [email protected]

     

    Yelp Inc.
    Condensed Consolidated Balance Sheets
    (In thousands)
    (Unaudited)
    December 31, December 31,
    2013 2012
    Assets
    Current assets:
    Cash and cash equivalents $        389,764 $          95,124
    Accounts receivable, net 21,318 11,738
    Prepaid expenses and other current assets 5,752 4,912
    Total current assets 416,834 111,774
    Property, equipment and software, net 30,666 14,799
    Goodwill 59,690 48,605
    Intangibles, net 5,235 5,936
    Restricted cash 3,247 6,400
    Other assets 306 182
    Total assets $        515,978 $        187,696
    Liabilities, and stockholders’ equity
    Current liabilities:
    Accounts payable $            3,364 $            2,284
    Accrued liabilities 22,728 16,367
    Deferred revenue 2,621 2,856
    Total current liabilities 28,713 21,507
    Long-term liabilities 782 527
    Total liabilities 29,495 22,034
    Commitments and contingencies
    Stockholders’ equity
    Common stock – –
    Additional paid-in capital 553,753 225,245
    Accumulated other comprehensive  income 3,188 805
    Accumulated deficit (70,458) (60,388)
    Total stockholders’ equity 486,483 165,662
    Total liabilities, and stockholders’ equity $         515,978 $         187,696

     

     

    Yelp Inc.
    Condensed Consolidated Statements of Operations
    (In thousands, except per share amounts)
    (Unaudited)
    Three Months Ended Twelve Months Ended
    December 31, December 31,
    2013 2012 2013 2012
    Net revenue $    70,651 $    41,157 $    232,988 $    137,567
    Cost and expenses
    Cost of revenue (1) 4,926 3,003 16,561 9,928
    Sales and marketing (1) 38,847 25,511 131,970 85,915
    Product development (1) 11,802 6,244 38,243 20,473
    General and administrative (1) 13,460 7,852 42,907 31,531
    Depreciation and amortization 3,524 2,421 11,455 7,223
    Restructuring and integration (1) – 1,262 675 1,262
    Total cost and expenses 72,559 46,293 241,811 156,332
    Loss from operations (1,908) (5,136) (8,823) (18,765)
    Other income (expense), net (109) (203) (407) (226)
    Loss before provision for income taxes (2,017) (5,339) (9,230) (18,991)
    Provision for income taxes (52) 20 (838) (122)
    Net loss (2,069) (5,319) (10,068) (19,113)
    Accretion of redeemable convertible preferred stock – – – (32)
    Net loss attributable to common stockholders $    (2,069) $    (5,319) $     (10,068) $     (19,145)
    Net loss per share attributable to common stockholders:
    Basic $      (0.03) $      (0.08) $         (0.15) $         (0.35)
    Diluted $      (0.03) $      (0.08) $         (0.15) $         (0.35)
    Weighted-average shares used to compute net loss per share attributable to common stockholders:
    Basic 68,859 63,003 65,695 54,149
    Diluted 68,859 63,003 65,695 54,149
    (1) Includes stock-based compensation expense as follows:
    Three Months Ended Twelve Months Ended
    December 31, December 31,
    2013 2012 2013 2012
    Cost of revenue $         140 $           38 $           421 $           122
    Sales and marketing 3,201 1,746 10,131 4,917
    Product development 2,705 696 6,270 1,705
    General and administrative 2,743 778 9,300 8,134
    Restructuring and integration – – 555 –
    Total stock-based compensation $      8,789 $      3,258 $      26,677 $      14,878

     

     

    Yelp Inc.
    Reconciliation of Net Loss to Adjusted EBITDA
    (In thousands)
    (Unaudited)
    Three Months Ended Twelve Months Ended
    December 31, December 31,
    2013 2012 2013 2012
    Net loss $ (2,069) $ (5,319) $ (10,068) $ (19,113)
    Provision for income taxes 52 (20) 838 122
    Other income (expense), net 109 203 407 226
    Depreciation and amortization 3,524 2,421 11,455 7,223
    Stock-based compensation* 8,789 3,258 26,122 14,878
    Restructuring and integration – 1,262 675 1,262
    Adjusted EBITDA $ 10,405 $  1,805 $  29,429 $    4,598
    * Stock-based compensation for the twelve months ended December 31, 2013 excludes approximately $0.6 million of stock-based compensation already included in restructuring and integration costs.

     

     

     

    SOURCE Yelp Inc.
     

     

    Images via Yelp

  • Nobody Wins In Yelp Defamation Suit

    Nobody Wins In Yelp Defamation Suit

    Over a year ago, a Virginia judge ordered a Yelp user to change a negative review on the site. Building contractor Dietz Development sued user Jane Perez, claiming to have lost business because of her negative postings on the site (as well as on Angie’s List). He sued for $750,000, and claimed that he lost $300,000 because of her “defaming” words.

    Perez had written that Dietz had caused damage to her home, trespassed and stole jewelry. The judge granted a temporary injunction, and ordered Perez to change parts of the review, specifically the accusations of theft.The following month, the Supreme Court of Virginia overturned the injunction, ruling that it was not justified.

    The case went to trial last week, and has now apparently been resolved without a real victor. The trial lasted for five days, and a verdict was reached on Friday evening. They found that both had defamed one another (Dietz defaming Perez through responses to her initial reviews), and neither party was awarded damages.

    The Washington Post shares statements from both of them with Dietz expressing shock, and Perez claiming victory because “freedom of speech won in this case, and that’s a good message to send.”

    Last week, Yelp took to its blog to encourage users not to be afraid to leave negative reviews.

    “But despite this press hype, 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 elp 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.”

    “As we mentioned a couple weeks ago, litigation is not a good substitute for customer service,” he added. “Businesses that try to sue their customers into silence rarely prevail, end up wasting their own time and money and usually bring additional, unwanted attention to the original criticism (a phenomenon known as the Streisand effect). Many states (though, unfortunately not Virginia) have laws designed to further protect consumers from being intimidated or silenced by these types of lawsuits. These Anti-SLAPP laws allow consumers to quickly end meritless lawsuits and require the business to pay the consumer’s legal fees when the business loses.”

    Yelp reviewers help both consumers and “good” businesses, he noted.

    It does seem like the lengthy Virginia case’s conclusion could dissuade some businesses from going after Yelp reviewers. At the very least, it will make them think twice about the responses they post to any negative reviews.

    On the flip-side, businesses who feel they have been defamed may feel their hands are tied.

    Yelp will announced its Q4 and full year 2013 earnings today.

    Image via Yelp

  • Yelp To Users: Don’t Be Afraid To Leave Negative Reviews

    Yelp, it would seem, doesn’t want its users to be afraid to leave negative reviews for businesses because of some of the lawsuits that have made the headlines.

    Yelp Senior Director of Litigation Aaron Schur took to the Yelp blog to point out that lawsuits like the recent cases in Virginia (one went to trial this week) are “rare”.

    “But despite this press hype, 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,” he writes. “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.”

    “As we mentioned a couple weeks ago, litigation is not a good substitute for customer service,” he continues. “Businesses that try to sue their customers into silence rarely prevail, end up wasting their own time and money and usually bring additional, unwanted attention to the original criticism (a phenomenon known as the Streisand effect). Many states (though, unfortunately not Virginia) have laws designed to further protect consumers from being intimidated or silenced by these types of lawsuits. These Anti-SLAPP laws allow consumers to quickly end meritless lawsuits and require the business to pay the consumer’s legal fees when the business loses.”

    Yelp reviewers help both consumers and “good” businesses, he says.

    The company recently disclosed its lobbying efforts after hiring lobbyist Laurent Crenshaw, who is lobbying on an “anti-SLAPP” bill, which would prevent strategic lawsuits against public participation.

    Yelp was recently ordered by a court to identify anonymous users whom one business said were writing fake, negative reviews.

    Image via Yelp

  • Virginia Yelp Review Suit Goes To Trial

    A little over a year ago, a Virginia judge ordered a Yelp user to change a negative review on the site. Jane Perez was sued by Dietz Development, a building contractor who claimed to have lost business because of her negative postings on the site (as well as on Angie’s List). He sued for $750,000, and claimed that he lost $300,000 because of her words.

    Perez claimed in her reviews that the contractor had caused damage to her home, trespassed and stole jewelry. The judge granted a temporary injunction, and ordered Perez to change parts of the review, specifically the accusations of theft.

    The following month, the Supreme Court of Virginia overturned the injunction, ruling that it was not justified.

    The case, according to The Washington Post, heads back to court on Monday for trial.

    The Virginia Supreme Court determined that Perez wouldn’t have to change the reviews as long as they had yet to be proven libelous. Simply being sued for damages was not determined to be enough of a justification.

    Now that the case is going to trial, this feud gets a step closer to conclusion. We’ll continue to follow it, and report on the outcome.

    Earlier this month, in another case, Yelp was ordered to identify the people behind anonymous reviews who allegedly left fake, negative reviews on a business listing.

    Image via Yelp

  • More Unproven Yelp ‘Extortion’ Accusations Publicized

    The story has been going on for quite some time. Businesses accuse Yelp of “extortion” or holding their positive reviews hostage unless they spend advertising money, and Yelp denies it vehemently, citing a lack of evidence and research appearing to contradict it.

    But the story isn’t going away, as more accusations make their way to the public eye.

    Has Yelp sufficiently proven that such accusations are unsubstantiated? Tell us what you think.

    Last week, the Seattle Times ran a guest column by Terry Thomas, a small business owner who has taught business ethics at Seattle University and the University of Washington.

    “Shortly after our company began receiving positive reviews on Yelp, an energetic Yelp salesman called me, congratulating me on our company’s online reviews, and offering to help boost our Internet presence with one of several of Yelp’s marketing programs,” he wrote. “Once I was finally able to get him to answer my question about what the price would be, I was staggered: $8,400 per year for their midlevel program. I politely declined.”

    After that, Thomas claimed his positive reviews began to be filtered or “buried deep” within the site and “difficult to access.” Only positive reviews had been moved, he said. The more negative reviews moved up the page and were featured more prominently.

    It’s pretty much the same story we’ve been hearing for a long time. One business owner even shared it with Judge Milian on The People’s Court:

    Last May, Yelp defended itself after similar accusations from various business owners were reported by The Washington Post and the Los Angeles Times.

    “Some business owners have even gone so far as to take these accusations to court, but their claims keep getting dismissed for lack of any fact-based evidence,” blogged Yelp’s VP Communications & Public Affairs, Vince Sollitto, at the time.

    He pointed to research finding no connection between advertising and Yelp’s automated filtering.

    With the data set employed, a Harvard Business School study found that “none of the advertise interaction effects are statistically significant,” and that “neither 1- nor 5-star reviews were significantly more or less likely to be filtered for businesses that were advertising on Yelp at the time we collected our dataset.”

    It went on to conclude, “Yelp’s current implementation of the filtering algorithm does not treat advertisers’ reviews in a manner different to non-advertisers’ reviews. While we have no direct knowledge of how Yelp’s filtering algorithm works, the lack of filtering biases associated with advertising increases our confidence in using filtered reviews as an unbiased, albeit imperfect, proxy for fake reviews.”

    You can find the report in its entirety here. Find section 3.4 for more details on the methodology.

    “A simple Google search debunks the conspiracy,” Sollitto wrote. “Want to see if businesses that advertise on Yelp really do get ‘special treatment?’ Feel free to do your own version of a simple Google test like this [site:yelp.com/biz ‘Yelp sponsor’ AND ‘rude staff’] by inserting your own negative phrases in the last set of quotation marks. The words ‘Yelp Sponsor’ only appear on pages of advertisers, which begs the question: if these Yelp advertisers get a special ‘Delete’ button for negative reviews, why in the world aren’t they using it? (Hint: because it doesn’t exist.) Nor is there any rational incentive for a Yelp sales team member to jeopardize his or her career by pitching a product that can’t be delivered because it doesn’t exist.”

    Thomas says he’s not buying Yelp’s defense, and notes that many other small business owners who have filed a class-action lawsuit against the company don’t either. The case was dismissed, but is awaiting a decision in appeals court.

    His article points to an NBC report from November about a dentist who claimed his negative reviews had been removed when he paid to advertise with the company, but reappeared when he told the company he no longer wanted to advertise.

    Following Thomas’ article, The Seattle Times posted a letter to the editor from someone named Nete Olsen, who claimed, “I’ve also been extorted by the online reviews site,” and that the article “puts into words the exact experience that our business has gone through with the online review website.”

    This week, the Times published another letter to the editor from Sollitto saying that both Thomas’ piece and Olsen’s letter “rehash a conspiracy theory that lacks evidence (see: Woozle effect).” He noted the Harvard study again.

    “Yelp does not extort small businesses,” he continued. “We have been transparent with the fact that we do not recommend every review that is submitted. Why might a review not be recommended? It might be a fake, an unhelpful rant or rave, a review that the business owner asked a customer to write, or, simply, a review that was posted by someone we don’t know much about.”

    “Let’s spend a moment on that last one,” he added. “We feel the most useful reviews come from active members of the Yelp community — those who regularly return to the site to share their opinions, who engage with other members of the community and share more information about themselves. After all, whose opinion would you trust more: a friend who you know is an expert in that given area, or a faceless stranger just shouting out a drive-by suggestion?”

    Jeremy Stoppelman

    Image via Jeremy Stoppelman (Twitter)

    Yelp CEO Jeremy Stoppelman addressed the topic in a reddit AMA in November, saying, “Despite the ‘Yelp extorts’ conspiracy meme, there’s never been a shred of actual ‘smoking gun’ evidence (phone call recording, email, etc.) to back up the claims.”

    As far as we know, he’s right. We’ve not seen any real hard evidence. Still, the accusations continue to fly, and businesses even go to Yelp events to voice their frustration.

    Yelp and the U.S. Small Business Administration (SBA) have a new online reviews initiative, which will see even more events in various cities throughout the country this year, leading up to Small Business Week in May. We’d imagine that Yelp will face a few more unhappy businesses.

    In a couple weeks, Yelp will release its Q4 and full year 2013 financial results, and will no doubt provide some stats on reviews and users. On the last one, they announced a 68% year-over-year increase in revenue and 42% year-over-year growth in cumulative reviews.

    The extortion accusations are only one of the controversies Yelp continues to face. It also continues to battle fake reviews with “sting operations.” The company recently revealed that it has caught nearly 300 businesses engaging in fake reviews, resulting in their business pages displaying Yelp’s consumer alert messages.

    Do you believe the “extortion meme” is a baseless conspiracy theory or do you think there’s a legitimate reason these accusations continue to fly? Share your thoughts in the comments.

    Lead image via Yelp

  • Yelp And SBA Team Up On Online Reviews Initiative

    Yelp and the U.S. Small Business Administration (SBA) have teamed up to launch the Success With Online Reviews initiative, which kicked off last week at the New York Stock Exchange.

    “Sharing what you dig and what you don’t is nothing new, but today this consumer word-of-mouth happens at lightning speed online, in the form of reviews,” says Darnell Holloway, Yelp’s Senior Manager of Local Business Outreach. “What’s more is that in a recent national survey, 85% of consumers said that they read online reviews about local businesses. ”

    That would be the Local Consumer Review Survey 2013 from BrightLocal.

    While the kickoff event is over, Yelp and the SBA will be bringing “local expert” workshops to various cities around the country over the course of the next few months. They’ll also be hosting a series of webinars, beginning on February 11th.

    According to the SBA, the events will teach best practices for handling negative reviews, responding to reviews, generating more buzz with promotions, and monitoring customer leads.

    At the initial event, local business owners were invited to listen to a panel made up of “business owner experts” and reviewers fro Yelp’s Elite Squad, including the owner of the most reviewed locksmith business in New York.

    The initiative itself will run through Small Business Week in May (05/12-05/16).

    Image via Yelp

  • Just How Bad Is Yelp’s Fake Review Problem?

    You’re probably aware of multiple controversial issues surrounding Yelp reviews. There are several to choose from. You have some businesses accusing the company of holding positive reviews hostage (with advertising being the ransom). You have a court ordering Yelp to turn over the identities of anonymous Yelp reviewers. You have people paying other people to write fake reviews, whether it’s negative reviews for competitors or positive reviews for their own business.

    Do you find Yelp to be a reliable source of information for consumers? Is your own business fairly portrayed? Ever suspected a review was a fake? Let us know in the comments.

    These are all issues that Yelp has to deal with on an ongoing basis, and that consumers have to take into consideration every time they read a review on the site. The fake reviews are apparently so prevalent that the company is ramping up its efforts to combat them.

    “Consumers, on average, can rely on the content they see on Yelp,” CEO Jeremy Stoppelman said on stage at LeWeb last year. Reassured?

    In the fall of 2012, Yelp revealed a new system for combating fake reviews with its Consumer Alerts. Yelp shows warnings to users when they’ve found businesses that have paid for reviews. If you come across such a business listing, you’re greeted with a Consumer Alert, which explains that they’ve caught someone red-handed trying to buy reviews.

    Yelp Consumer Alerts

    Yelp doesn’t kick the business out of its service, but the embarrassing warning appears on the business listing for three months. Yelp has hoped that this would serve as a deterrent. Just how well it’s actually working remains a mystery. So far, Yelp has reportedly issued 285 of the alerts with more on the horizon.

    Stoppleman was interviewed for an article this week by The Telegraph. He talked about how the company is conducting “sting operations,” where Yelpers pose at users willing to write paid reviews. It’s only been happening in the U.S. so far, but is about to be expanded into Europe.

    “It has been incredibly successful in that we have been able to catch businesses red handed,” Stoppleman is quoted as saying of the sting operations.

    But how successful has Yelp really been at spotting fake reviews? Catching people red-handed is one thing. How many are not being caught?

    Yelp has certainly been using the law to go after paid reviews, but a lot of this has been happening well after the Consumer Alerts system was put in place. Last summer, Yelp sued BuyYelpReview.com, obviously for selling reviews (not the latest such suit filed by Yelp).

    Apparently Yelp has busted quite a few businesses over the past year. It had already caught nine when it first launched the Consumer Alerts, then launched another round of them in August. With the number approaching 300, it would appear that the program, at least initially, did little to deter the practice (though Stoppleman told the Telegraph it’s “obviously a deterrent”).

    “We’ve seen some pretty extreme chicanery in connection with these businesses, including people buying fake reviews, offering rewards or discounts for reviews or having a large number of reviews submitted from the same Internet Protocol (IP) address (a clue that someone may be trying to artificially inflate their rating),” said Yelp VP of Consumer & Mobile Products Eric Singley in August.

    In September, a Harvard Business School study suggested that 16% of Yelp restaurant reviews are potentially fake.

    Luther Lowe, director of public policy at Yelp, tells us that 16% figure is misleading, as “HBS used reviews Yelp identified as suspicious (not ‘fake’) to run [its] analysis. 25% suppressed not 16%.”

    Yelp responded to the study, saying that the findings “shouldn’t come as a complete surprise.”

    “As consumers increasingly turn to online reviews to find a local business, the incentive to artificially improve one’s reputation also increases,” the company said. “But neither should the fact that Yelp has been on guard against these very same reviews from our earliest days.”

    It went on to talk up its controversial review filter.

    That same month, New York Attorney General Eric T. Schneiderman announced that nineteen companies agreed to stop writing fake Yelp reviews and pay over $350,000 of fines.

    “Consumers rely on reviews from their peers to make daily purchasing decisions on anything from food and clothing to recreation and sightseeing,” he said. “This investigation into large-scale, intentional deceit across the Internet tells us that we should approach online reviews with caution.”

    “We think it’s great the New York Attorney General took action against these businesses that try to mislead consumers. In fact, we helped him,” said Yelp Senior Litigation Counsel Aaron Schur. “Because Yelp uses sophisticated software to filter reviews and weed out less reliable ones, we identify — and take action against — concerted campaigns to game the system quite frequently. As a result, we were able to give the NY AG’s office some solid leads on which businesses to go after.”

    “And we have more,” he added. “We would love to work with law enforcement officials in other states to crack down on this unethical practice.”

    Meanwhile, there are more reviews being posted to Yelp than ever. In the second half of 2013, Yelp added the ability to review businesses from its mobile apps. Earlier this month, Yelp boasted 47 million reviews, seemingly encouraging the saturation of the site with reviews by recognizing a guy who wrote 1,712 in 2013 alone. Perhaps more reviews means better odds of drowning out the fake ones.

    At least Yelp isn’t eager to roll over on fake reviews without significant evidence. Despite being ordered to do so, Yelp has been resistant to handing over the names of anonymous users, whom a business alleges wrote fake negative reviews about it.

    How bad is Yelp’s fake review problem? Do you think Yelp is doing a good job of keeping it under control? Share your thoughts in the comments.

  • Court Orders Yelp To Identify Anonymous Reviewers

    Once again, the subject of free speech with regard to Yelp reviews has been brought up in court. A new decision has proven controversial because if the court is wrong (which is very possible due to an apparent lack of real evidence), Yelp users who chose to leave reviews anonymously will have heir identifies revealed for engaging in the practice that millions of others do on the Internet. The decision could set a dangerous precedent for other potential suits involving negative online reviews and anonymity.

    Do you think people should be able to leave anonymous reviews on the the Internet without having to worry about their identities exposed? Share your thoughts in the comments.

    The Court of Appeals of Virginia ruled on Tuesday that Yelp has to reveal the names of seven reviewers who left anonymous, negative reviews of a business, which maintains that the names are critical in pursuing a defamation case against the reviewers over what it claims were false reviews from non-customers.

    The business we’re talking about is Hadeed Carpet Cleaning in Alexandria, Virginia. It alleges that reviewers are in violation of Yelp’s terms of service by not being real customers.

    The Circuit Court for the City of Alexandria held Yelp in contempt for not complying with a subpoena, but Yelp argued that this was a violation of the First Amendment. Some would agree considering that the business has apparently been unable to prove that it “had legally and factually sufficient claims against each defendant.”

    Either way, the Appeals court was apparently convinced enough by Hadeed’s argument.

    It explains, “As of October 19, 2012, Yelp’s website displayed seventy-five reviews about Hadeed and eight reviews about a related company, Hadeed Oriental Rug Cleaning. These reviews were posted by various Yelp users, and a number of the reviews were critical of Hadeed. Hadeed filed suit against the authors of seven specific critical reviews. In these reviews, the authors implicitly or explicitly held themselves out to be Hadeed customers. In its complaint, Hadeed alleged that it tried to match the negative reviews with its customer database but could find no record that the negative reviewers were actually Hadeed customers. Consequently, Hadeed alleged that the negative reviewers were not actual customers; instead, the Doe defendants falsely represented themselves to be customers of Hadeed. Hadeed’s complaint further alleged that the negative comments were defamatory because they falsely stated that Hadeed had provided shoddy service to each reviewer.”

    You can find the full legal document here.

    Yelp (incorporated in Delaware) also argued that the trial court erred “by asserting subpoena jurisdiction over Yelp, which is a non-party, foreign corporation.” The court found that the service of the subpoena on Yelp’s registered agent in Virginia provided jurisdiction.

    The Washington Times shares a statement from a Yelp spokesperson:

    “We are disappointed that the Virginia Court of Appeals has issued a ruling that fails to adequately protect free speech rights on the internet, and which allows businesses to seek personal details about website users — without any evidence of wrongdoing — in efforts to silence online critics,” Yelp spokesman Vince Sollitto said in a statement. “Other states require that plaintiffs lay out actual facts before such information is allowed to be obtained, and have adopted strong protections in order to prevent online speech from being stifled by those upset with what has been said. We continue to urge Virginia to do the same.” Emphasis added.

    The case is even more interesting given that Yelp has actually been battling fake reviews tooth and nail. If people are leaving fake reviews, as Hadeed is claiming, Yelp would supposedly want these eliminated. They just don’t want to see their users’ first amendment rights violated to get there.

    In September, New York Attorney General Eric T. Schneiderman announced that nineteen companies agreed to stop writing fake Yelp reviews and pay over $350,000 in fines.Yelp said at the time that it would like to work with law enforcement officials in other states to crack down on the practice.

    Also in September, a study from the Harvard Business School claimed that about a fifth of Yelp restaurant reviews were phony. This was after the company sued a site for selling fake reviews.

    Interestingly enough, it was a year ago that we were reporting on the Supreme Court of Virginia overturning an order for a Yelp user to change her reviews, which accused a contractor of stealing from her. It was essentially determined that the reviews were free speech until proven defamatory. So, pretty much the opposite of what we’re seeing this week.

    One of the latest reviews on Hadeed’s Yelp listing comes rom Chris R. from Cumberland, Rhode Island, who writes, “I’ve not been a customer here however Joe Hadeed made headlines today by winning a law suit against yelp aimed at curbing free speech. The world (or the US for that matter) does not revolve around Hadeed carpet cleaning, Mr. Hadeed. Do not compromise Americans liberties (more than they have been already) because you are upset someone gave you a bad review on http://yelp.com. Oh, and enjoy the 1 star rating.”

    There’s no question that defamatory comments online can hurt businesses, especially on a hugely popular review site like Yelp. But at what cost should businesses be able to try and make their cases?

    What do you make of the court’s ruling? Should Yelp be forced to turn over identities of anonymous users? Share your thoughts in the comments.

    Image via Yelp

  • This Guy Wrote 1,712 Yelp Reviews Last Year Alone, Receives Praise From Yelp

    Oakland Yelp user Victor G. received some recognition from Yelp for posting the most reviews of 2013 with a total of 1,712 during the year. That’s a lot of reviews (about five a day).

    In all, he’s written over 7,000 reviews on the site. That’s out of the 47 million reviews it hosts.

    “A Yelper since December 2007 and a member of the Elite Squad six years running, Victor G. has reviewed everything from gelaterias to thrift stores,” says Yelp VP of Community Management Andrea Rubin.

    Rubin actually shared the top three Yelpers of the year, which included Victor G. at number one, followed by Kim N. and Kenneth N. of Mountain View and Vancouver respectively.

    The company also shared the top ten most reviewed local businesses of the year, with Bottega Louie in Los Angeles taking the top spot.

    “People voiced their opinions about this LA eatery in 2,193 recommended reviews over the course of the year, boosting Bottega Louie’s overall review count to more than 7,000 while maintaining an impressive 4-star rating,” says Rubin. “Though the portobello fries are clear crowd pleasers, Bottega Louie’s famous macarons take the cake, with mentions in 1,230 reviews!”

    The top ten is as follows:

    1. Bottega Louie, Los Angeles, CA
    2. Phil’s BBQ, San Diego, CA
    3. Bi-Rite Creamery, San Francisco, CA
    4. Wurstküche, Los Angeles, CA
    5. Pink’s Hot Dogs, Los Angeles, CA
    6. Katz’s Delicatessen, New York, NY
    7. Ippudo NY, New York, NY
    8. Brenda’s French Soul Food, San Francisco, CA
    9. The Halal Guys, New York, NY
    10. Founding Farmers, Washington, DC

    Image: Victor G. (Yelp)

  • Yelp Explains The Recommended Review Process

    Yelp is trying to educate users more about how its review recommendations work. As the company acknowledges, most people probably don’t really even think about it, but others certainly wonder how they come up the ones that they do.

    “Well, for starters, imagine you were trying to find a great new restaurant in town way back before Yelp existed,” says Vince Sollitto, Yelp’s VP Communications & Public Affairs. “You’d probably try to get as many word-of-mouth recommendations as possible. Then you’d sift through them, deciding how to value each one. You would probably place more weight on recommendations from people in the know who have tried every place in town, and from people whose tastes you share, than on recommendations from folks who rarely go out to eat, who seem like they might be too close to the owner to be unbiased, or who you’ve just met and don’t know much about.”

    “In a nutshell, that’s how Yelp works,” he continues. “Every day our automated software goes through the more than 47 million reviews that have been submitted to Yelp to select the most useful and reliable ones to help you find the business that’s right for you. Unlike many other sites, our stance is quality over quantity when it comes to reviews. As a result, we only recommend about three-quarters of the reviews we get. More often than not, these reviews come from active members of the Yelp community, and from those we’ve come to know and trust.”

    He notes that reviews that aren’t recommended appear in the link on the bottom of the business’ profile page, and don’t factor into the business’ overall star rating or review count.

    Yelp says it doesn’t recommend reviews when it doesn’t know much about the user, or thinks that they could be biased or fake.

    Here’s a new ideo Yelp has put together to illustrate the process.

    I probably don’t have to tell you that Yelp is often criticized over fake reviews, and has been accused of holding reviews “hostage”.

    CEO Jeremy Stoppelman did a reddit AMA (Ask Me Anything) last week to address these things and more. Here are some highlights.

  • Yelp CEO Addresses All Your Favorite Accusations On Reddit

    Yelp CEO Addresses All Your Favorite Accusations On Reddit

    Yelp CEO Jeremy Stoppelman engaged in a reddit AMA (Ask Me Anything) today, taking on an assault of questions about extortion, fake reviews, lawsuits, wages, and just about everything you’ve ever heard people allege about the company.

    Not that he has any regrets about it. Someone actually asked him if he regretted doing the AMA, and he responded, “Absolutely not. I should have done it years ago, keep the questions coming!”

    And keep them coming they did.

    On claims that Yelp holds positive reviews hostage by not allowing them to be viewable, Stoppelman said, “There has never been any amount of money you could pay us to manipulate reviews. We do have an algorithm that highlights the most useful and reliable reviews on our site which is about 75% of contributed content. I started Yelp to solve my own need of finding a great doctor, obviously we needed to protect consumer(s) against fake reviews and spam to make sure the site is actually helpful (anyone remember CitySearch?). That’s why we pioneered the development of a review filter, a technology that other competitors like Google have since tried to mimic.”

    “Despite the ‘Yelp extorts’ conspiracy meme, there’s never been a shred of actual ‘smoking gun’ evidence (phone call recording, email, etc.) to back up the claims,” he said in another comment.

    In another, he said that no one in the Yelp Sales organization can write reviews.

    When asked directly if Yelp calls businesses and offers to release good reviews and/or remove bad reviews for money, Stoppelman said, “Absolutely not. Consumer trust is paramount.”

    When a user (going by handle Professional_Fart) replied with “Bullshit,” Stoppelman responded, “What part of that is bullshit?”

    Professional_Fart did not elaborate.

    One user asked the interesting question: Are the reviewers on Yelp your customers or are they your product?

    Stoppleman responded, “Internally we refer to the Yelp community as ‘the source’ (lifted from the newspaper world’s – protect your source) which means we must protect and nourish the community lest we lose everything. Without Yelpers there is no company.”

    The AMA record also shows that Stoppelman had coffee, 2 eggs and half a cantaloupe for breakfast this morning. Read the rest of his conversation here.

    Yelp released its quarterly earnings report last week with a 68% year-over-year increase in revenue. Cumulative reviews grew 42%, while average unique monthly visitors were up 41% at 117 million. Active local business accounts grew 61% to 57,200.

    Image: Jeremy Stoppelman (Twitter)

  • Brace Yourself For A Lot More Yelp Reviews

    Yelp released its earnings report for the third quarter this week, and during its conference call, revealed some staggering numbers related to its recently added mobile review feature. The bottom line is that the feature is hugely popular, and continues to become more so. That means people are more likely to leave a review as soon as they interact with your business, while their experience is fresh in their minds.

    Do you think mobile reviews are having an impact on your business? Let us know in the comments.

    Yelp says it is seeing 10,000 mobile reviews each day, representing 25% of its daily review volume. Already.

    “We’re just getting started,” CEO Jeremy Stoppelman said during the call, noting that mobile review functionality just hit Android a few weeks ago.

    Mobile reviews on Yelp for Android

    In fact, the functionality wasn’t present in the iOS app either until just a couple months ago. Clearly the feature is having a major impact on how consumers use Yelp, as was to be expected.

    “How it affects contributors is hard to say at this point,” said Stoppelman, adding that “folks that have been asking for it are quite delighted.” He says they’re seeing that coming up in the reviews themselves.

    He added that the mobile reviews should continue to lead to more traffic to Yelp.

    It’s only the latest in a series of mobile enhancements Yelp has made in recent months. They also recently added the ability to match users’ photos with their reviews, and display them together, potentially helping businesses feature more imagery. According to Yelp, users stay on business listings 2.5 times longer when they have photos.

    Of course users can still leave “Tips” via the mobile apps. These are the “bite-sized” content compared to the reviews that enable customers to go into further detail about their experience.

    During the call, Yelp also noted that they’ve hired some more Android developers to keep the Android app on parity with the iOS app.

    During the quarter, 46% of Yelp’s local ads were shown on mobile devices, approximately 62% of searches were on mobile devices, and mobile app usage increased to about 11.2 million unique devices on a monthly average basis.

    Stoppelman said, “We saw another quarter of strong momentum thanks to the high-quality, authentic content contributed by Yelpers around the world. Our focus on connecting consumers with great local businesses continues to drive our success. In the third quarter, we improved the user experience by adding the ability to write and post reviews from mobile and launched new features such as the customer activity feed for business owners. Looking to the rest of the year and beyond, we are well positioned to capture the large local opportunity ahead of us through our innovation around mobile, geographic expansion and closing the loop with local businesses.”

    Yelp reviews have long been controversial with business owners between fake reviews, Yelp’s review filter and people making defamation claims.

    Earlier this month, Yelp posted some tips for business owners to manage their reputations, which basically boiled down to determining where you want to focus your attention, attracting potential customers by using Yelp’s tools (like business info, photos and deals/gift certificates) and connecting with customers.

    “When someone reviews your business on Yelp, you have two options to connect with that customer: send a private message or add a public comment,” wrote Morgan Remmers, Manager of Local Business Outreach for Yelp. “Sending a private message is much like sending someone a personal email and goes directly to the reviewer. A public comment posts directly below the consumer’s review for the public to see.”

    “A good use of the public commenting tool is to state your business’ policy or clarify any inaccuracies in the review,” Remmers added. “Regardless of the response tool you choose to use, respond diplomatically, thank the reviewer for sharing their feedback and ask someone less involved in your business to read over your response before you hit the ‘send’ button. Keep in mind that consumers are looking at the BIG picture about how your business is being perceived so don’t focus or obsess over any single review.”

    Separately, Yelp shared some comments from actual business owners from its Small Business Advisory Council panel:

    “I handle negative reviews online the same way I would in the restaurant. You deal with it as an owner, you address the problem and rectify it as fairly as possible.” – Valarie Girard, Les Deux Gamins in Montréal, QC

    “Allowing Yelp to become the explosive tool it’s capable of being is most often achieved by providing first class customer service.” Wade Lombard, Square Cow Movers in Austin, TX

    “In order to succeed on Yelp, business owners must realize they are not helpless bystanders. They can manage their online reputation by improving their customer service and communicating with reviewers using the tools provided by Yelp, such as business owner comments and private messaging. “ – Julie Lim, OC Wine Mart in Irvine, CA

    “Invest the time to understand how to use Yelp to your business’ advantage. This includes developing a holistic, customer centric, high-touch approach to appropriately embrace the word-of-mouth power that Yelp can and will unleash for your brand and business.” – Matt Berman, Bolt Barbers in Los Angeles, CA

    As we’ve seen, business owners at other Yelp events have had some pretty different things to say. You’re probably familiar with the complaints by now.

    A study released last month found that one fifth of Yelp reviews are phony.

    During the third quarter, cumulative reviews grew 42% year-over-year reaching over 47.3 million. Average monthly unique visitors were up 41% year over year at about 117 million, and active local business accounts grew 61% to about 57,200.

    Has your Yelp experience improved in recent months? Let us know how it’s going.

  • Google Adds Review Extensions To AdWords

    Google is making big moves to lend more credibility to AdWords ads, whether that be in the form of endorsements from people users know and trust or testimonials from respected brands.

    In June, Google announced the beta release of review extensions, which allow advertisers to include said testimonials right in their ads. After testing with select partners, Google is now making the feature available to advertisers in general.

    Review Extensions

    “Seeing a review from a reputable source gives users valuable information that builds trust in your business,” says Google in a Google+ post. “We’ve already seen an enthusiastic response to review extensions and many of the advertisers who have implemented them have seen impressive results.”

    They share an example from airline El Al, which claims to have seen a 10% increase in click through rate using the extensions.

    The feature will become available to AdWords advertisers over the coming days. To use it, click the Ad Extensions tab, select Review Extensions from the View menu, click +Extension, and choose the appropriate campaign. You’ll need to specify if it’s a paraphrased review or an exact quote. Google will have to approve the text. It will take a few days.

    This comes after Google made changes to its terms of services enabling it to use users’ profile pictures and names in ads (and other products). Similarly, Google expects this to add more credibility to ads, as people are more likely to trust their friends.

    Image: Google

  • Yelp Android App Adds Ability To Write Reviews

    About two months ago, Yelp launched an update to its iPhone app, adding the ability to write reviews for businesses from the app. Now, the functionality has come to Android.

    This is obviously a major part of Yelp, and it is somewhat surprising that it took as long as it did to make its way to the mobile experience, but either way it’s here now.

    Yelp reviews on Android

    “With this new addition, we thought it would be interesting to take a look at what Yelpers have been reviewing on mobile and, as it turns out, it’s a little bit of everything,” says Yelp mobile product manager James Hurley in a blog post. Not only are consumers raving about (and uploading photos of) the to-die-for apple pie à la mode they just devoured, they’re also sharing their thoughts on auto mechanics, gyms and plumbers.”

    “They’re also loving what they’re reviewing,” he adds. “We’ve long known that Yelpers have and share more positive experiences than negative ones and the same is true for mobile contributions. For those who wondered if the ability to write reviews instantly would lead to more rants and raves in the heat of the moment, we found that star ratings for reviews written on mobile closely mirror what we see on the desktop site, with about 80% of reviews being 3, 4 and 5 stars. Consumers are clearly taking the time to write thoughtful reviews of their experiences with local businesses.”

    Yelp adds mobile reviews to android

    Well, that sounds good in theory, though the app obviously does still give customers the ability to leave the aforementioned rants and raves about negative experiences, so that’s all the more reason to treat your customers right.

    The app is available in Google Play.

  • Yelp On Fake Reviews: Don’t Worry, We’ve Got This

    Last week, a study from Harvard Business School came out looking at Yelp review fraud, suggesting that about a fifth of Yelp restaurant reviews are fake.

    Do you trust reviews you read on Yelp? Let us know in the comments.

    It received quite a bit of attention, even making it pretty high on the front page of reddit, where thousands have commented. Among those commenting are some people who claim to have worked at Yelp in the past.

    Following is what reddit user ehenningl had to say about the controversial review filter:

    As a former employee of Yelp, I was very intrigued by this posting and read through the entire study and while there was some truth to the research they missed some major factors that go into the review filter. First off, Yelp’s review filter is smarter than they think, I don’t know how it exactly works, but it just fucking works. While working at Yelp, I was unable to write reviews for obvious conflict of interest reasons, but wrote many before and after my employment with them.

    Most of my reviews would stick because my USER ACTIVITY was frequent on their site and consistently used the site and mobile app to find businesses. The research paper points out; “For example, longer reviews, or reviews by users with a larger review count are less likely to be filtered.” Which is partly correct, but from what I know (they never let us know much about the filter when I worked there) USER ACTIVITY is the #1 factor that goes into the review filter, not the frequency of reviews. Which makes perfect sense because someone who frequents the site would understand the value of the reviews.

    The second flaw in their study is “A limitation of our work is that we cannot control for filtering biases in attributes that we do not observe, such as the IP address of a reviewer”, which is probably has the 2nd most weight in the review filter. IP address is everything, especially when you claim that most of these reviews are coming from overseas. For example Yelp knows where my user activity is coming from. If I where to write a review for a random business in Seattle, but I’ve never searched for a business while actually being in the state of Washington, it would most likely be filtered because there hasn’t been any USER ACTIVITY from an IP ADDRESS with in the Seattle area.

    The third area that the research didn’t address is the relationship of the reviewer to the business owner. All of my reviews have stuck on Yelp, except one. The one I wrote for a family friends business that I frequent. So how the did Yelp know that I know them personally and filter the review, Facebook. Both my account and the business owners account where linked through Facebook, which we are friends on….boom…filtered.

    Now I’m not claiming that 100% of reviews on Yelp are legitimate, but I’m sure as shit 20% are not fake. This study is flawed in so many ways because they didn’t have the proper data set to really understand what goes into the review filter which happens to be Yelp’s greatest proprietary asset.

    Yelp has since taken to its blog to address the study, saying that its findings “shouldn’t come as a complete surprise.”

    “As consumers increasingly turn to online reviews to find a local business, the incentive to artificially improve one’s reputation also increases,” the company said. “But neither should the fact that Yelp has been on guard against these very same reviews from our earliest days.”

    Once again, Yelp pointed to its review filter, sharing the following video from March of 2010:

    As you may know, Yelp has often been accused of extortion by small businesses who claim that Yelp buries their positive reviews with the filter if they don’t agree to buy ads from Yelp’s sales force.

    Reddit user drkstr17 claims to be a former Yelp employee who used to sell ads for Yelp, calling about 80 local businesses each day. drkstr17 writes:

    I’ll be the first to say that it was about the worst job I’ve ever had. It was high pressure sales for very little reward. It was a shit job, but I will say that never once was I given the power to “blackmail” any of my sales prospects. Yes, we were accused of removing good reviews and posting bad ones, but if any other account executives did this, they were merely bluffing. The reviews that get “filtered out” have nothing to do with Yelp sales people. It’s an automated feature that is supposed to detect “shady” accounts in an effort to prevent what this news article posting is all about. It doesn’t do the best job at it; I always thought they could’ve done a much better job with their review filter, but its intentions are in the right place.

    Another reddit user suggests that some sales reps could be “very pushy” with prospective clients due to the high pressure sales environment, and make suggestions that were not necessarily in line with company policy. drkstr17 replies:

    “Exactly. I’ve actually heard the line, “if you buys ads your reviews would be better” mouthed by several employees. It’s vague enough to be interpreted in different ways. If you do advertise with Yelp, technically speaking, your reach is expanded and your exposure goes up. This would then bring people to your business, and hopefully their experience ends with a positive review. That’s what we were taught to explain to our prospects, but it sounds more enticing to leave it as simple as, “buying ads = more positive reviews.”

    Yelp has defended itself against extortion and blackmail accusations, denying all of it, but the accusations have not gone away. The subject even came up on a recent episode of The People’s Court.

    It has also come up in Yelp-hosted events, which the company holds around the country to aid local businesses with their Yelp presences.

    Yelp Event

    As far as fake reviews go, Yelp is not taking them lightly. The company has been actively engaged in lawsuits against those creating them. Last week, New York Attorney General Eric T. Schneiderman announced that nineteen companies agreed to stop writing fake Yelp reviews and pay over $350,000 of fines.

    “Consumers rely on reviews from their peers to make daily purchasing decisions on anything from food and clothing to recreation and sightseeing,” Schneiderman said. “This investigation into large-scale, intentional deceit across the Internet tells us that we should approach online reviews with caution. And companies that continue to engage in these practices should take note: ‘Astroturfing’ is the 21st century’s version of false advertising, and prosecutors have many tools at their disposal to put an end to it.”

    Yelp, in a separate blog post, discussed the AG’s dealings as well.

    “We think it’s great the New York Attorney General took action against these businesses that try to mislead consumers. In fact, we helped him,” wrote Yelp Senior Litigation Counsel Aaron Schur. “Because Yelp uses sophisticated software to filter reviews and weed out less reliable ones, we identify — and take action against — concerted campaigns to game the system quite frequently. As a result, we were able to give the NY AG’s office some solid leads on which businesses to go after.”

    “And we have more,” he added. “We would love to work with law enforcement officials in other states to crack down on this unethical practice.”

    Of course, the site has allowed reviews from Breaking Bad characters to remain on pages for fictional restaurants, but I guess that’s not hurting anybody (except those looking for fictional restaurants to eat at as though they’re real).

    As mentioned, there is a massive conversation about Yelp on reddit. To read through the comments, one doesn’t get the sense that Yelp has a very great reputation these days. That hasn’t stopped the company from growing significantly.

    As with what you read on Yelp, things we read on reddit often need to be taken with a grain of salt. We don’t have any proof that the comments above are actually from people that worked at Yelp, so take them as you will.

    Do you believe Yelp to be a credible source for online reviews? Share your thoughts in the comments.

    This article has been updated from its original version.

    Images: Yelp

  • Nearly One-Fifth of Yelp Restaurant Reviews Are Phony, Shows Study

    Earlier this month it was reported that business review website Yelp had sued an individual who won against the company in small claims court. Julian McMillian, a San Diego lawyer, had sued Yelp over an ad deal. Yelp is now asking for $25,000 from McMillian for allegedly teaming with other lawyers in a scheme to plant fake good reviews on each others’ Yelp pages.

    That situation demonstrates just how serious Yelp is about protecting its image as an impartial source of business reviews. This, however, is at odds with business owners’ desire for good reviews, which can make the difference in thousands of dollars in revenue. With so many shady SEO companies promising good Yelp reviews, Yelp has implemented one of the harshest filtering systems in social media. It’s a system that often makes it the target of extortion claims from business owners who feel the company’s advertising practices conflict with its filtering goals.

    This week, a new study shows just why Yelp is so aggressive with its filtering and banning practices. The study, out of the Harvard Business School, is titled “Fake It Till You Make It: Reputation, Competition, and Yelp Review Fraud.” It shows that a full 16% of Yelp restaurant reviews are potentially fake.

    The study also found, naturally, that restaurants with already poor reputations are more likely to fake reviews. In addition, restaurants engaged in fierce competition are more likely to leave fake bad reviews for their competitors.

    As consumer review websites grow in popularity, so will companies promising foolproof fraudulent reviews. Though the study does not speak on Yelp’s advertising practices, it does shed light on just how challenging finding fake reviews is for the website and those like it. Barring some miracle algorithm that can perfectly identify fake reviews, the future of online reviews looks much the same as the current one: an ever-escalating battle between website filters and marketers.

  • Yelp Will Help Your Business, According To This Study

    There’s been a lot of controversy surrounding Yelp and the impact the online review service can have on small businesses. This has included everything from fake reviews to alleged extortion, with numerous businesses speaking out on the Internet, in the media and in the courtroom against the company and its policies.

    But a lot of businesses are finding success with Yelp, and are gaining customers. Merchant Warehouse has put out results from a study finding that 90% of those polled say positive reviews on Yelp impacted their company buying choices, and 72% of them said they trust online reviews as much as personal recommendations.

    Have you seen positive business effects from your Yelp listing? Let us know in the comments.

    According to Merchant Warehouse’s findings, 44% based their choices for what businesses to go to on text reviews, while 26% cited business ratings, 17% said quantity of reviews, and 14% said reviews from friends or family.

    Yelp Trusted Reviews

    The study finds that 93% of people who conducted research on review sites “typically” make purchases at the businesses they look up. Here’s a look at the types of businesses that are being searched for most:

    Business types

    Merchant Warehouse also points to data from a Boston Consulting Group survey, finding that small businesses that took advantage of Yelp business accounts saw an increase in annual revenue.

    Yelp Annual Revenue

    According to the firm, 77% of small businesses that use Yelp say the site has changed the way they respond to customer issues and complaints, but many simply aren’t paying attention.

    paying attention to yelp

    But other businesses are paying plenty of attention to Yelp, and they’re not happy with what they’re finding. Yelp has been going around the country holding town hall meetings, and according to reports, there are a lot of complaints being tossed the company’s way. The LA Times recently shared an account of one of the meetings:

    Many slammed the company for allowing reviewers to post inflammatory comments — one restaurant manager said she cried for three days after a Yelper wrote that her restaurant was filled with Nazis. Others said they had been subjected to aggressive advertising calls from Yelp.

    Vintage clothing shop owner Reiko Roberts said the advertising pressure amounted to extortion. She said that when she declined to buy ads, “the lower reviews go to the top and the higher reviews go to the bottom.”

    Meanwhile, Yelp continues to maintain a focus on “closing the loop,” meaning getting customers to actually engage in transactions with the businesses they are looking at. It’s still early in the company’s efforts here, but already over the last couple months, Yelp has made acquisitions and launched specific features aimed at doing this.

    Has your experience with Yelp been positive or negative? A mix of both? Let us know in the comments.

    All images part of an infographic from Merchant Warehouse. View the whole thing here.

    [via Social News Daily]

  • Etsy Is Changing The Way Reviews Work

    Etsy Is Changing The Way Reviews Work

    Back in April, Etsy launched a seller survey aimed at collecting feedback from its community that it would go on to use to make changes to the site’s feedback system. This week, the company announced those changes.

    In an effort to promote honesty and fairness, Etsy is doing away with the system that let a shop’s feedback score include ratings the owner received as a buyer, which the company says was misleading to shoppers.

    A shop’s overall rating will now only reflect reviews left by buyers in the last year. To encourage authentic reviews, as Etsy says, the buyer’s profile name will be displayed publicly with their reviews, and item reviews will require text as well as a rating.

    “These changes, as well as decline in non-payment issues, reduce the need for rating buyers,” says Etsy’s Heather Burkman. “Sellers who took our survey revealed that rating buyers was a tedious task — and in fact, buyer scores were rarely viewed. So, buyers will no longer be rated in the new system.”

    “We heard from many sellers that negative feedback often resulted from a misunderstanding, whether feedback was left too early, or the buyer didn’t contact the seller to resolve an issue,” she adds. “Reviews can now be edited, providing a window for the buyer and seller to communicate and resolve issues directly. To prevent premature reviews, we’re tying in processing and shipment information, so that an item can only be reviewed once we believe it‘s arrived.”

    Finally, Etsy reviews will be based on a new five-star rating system. More on the changes, which will be rolling out over the course of the coming weeks, can be found here.

    It seems that the new system is not going over incredibly well with some sellers, and some are afraid the site is becoming too much like eBay.