WebProNews

Tag: Online Reviews

  • Businesses Continue To Bash Yelp As Investor Bets It’ll Be Dead In 2 Years

    It hasn’t been a great week of PR for Yelp. While the company made its own news by expanding into Brazil, much of the media coverage has been about businesses bashing the company and its alleged practices and even included an angel investor betting $5,000 that Yelp will be out of business in two years based on a “flawed” business model. And that made Fast Company. Ouch.

    Will Yelp survive? Are its opponents off base? Is Yelp being misrepresented in the media? Or are these concerns and complaints valid? Share your thoughts.

    For the duration of 2013, Yelp has been taking the Yelp Town Hall tour around to various cities around the nation. After a number of them, the company took to its blog to discuss what happens at them.

    In April, Darnell from Yelp’s Business Outreach team wrote, “In the last four months, we visited nine major metros, from Honolulu to Philadelphia, with hundreds of local businesses participating in our interactive workshops designed to answer the burning question, ‘What do I need to know to thrive in the world of online reviews?’ Each event includes a live discussion with business owners who successfully use Yelp to market themselves, Yelp Elites (who are some of the most prolific reviewers in their local community) and members of Yelp’s Business Outreach team. Our goal is to create an open forum in each city we visit where business owners can network and learn directly from their peers.”

    “According to attendees we surveyed, we’re achieving our goal with 72% of respondents saying they learned 1-3 new skills to manage their business listing and reputation on Yelp,” he added. “Beyond that, we asked what were the most useful takeaways from the events. 46% of attendees surveyed said that the tips on responding to negative reviews were useful, while 41% said that the discussion around Yelp’s automated review filter was useful.”

    But from the sound of it, the events haven’t all been quite so rosy.

    This week, Yelp held one of the events in Los Angeles, and according a report from the LA Times, business owners had a lot of outrage to share with the company. Here’s an excerpt:

    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.”

    This “extortion” claim has been a recurring theme throughout media coverage of Yelp and business owner opinion. A few months back, it got so bad that the company had to take to its blog to refute such accusations, but it didn’t do a lot to make such talk go away. A lot of businesses don’t seem to be buying it. The subject even came up on a recent episode of The People’s Court.

    Judge Milian’s repsonse was, “Wow! I don’t know if what you’re saying is accurate or not, but if it is, it’s pretty outrageous,” later adding that she was “horrified.”

    The LA Times report even quotes one business owner, who said that advertising on Yelp had helped his business, but still said we was skeptical of Yelp’s stance that advertising has no affect on review placement. It’s interesting that even business owners finding success on Yelp are saying such things.

    CEO Jeremy Stoppelman actually talked about this briefly in an interview with AdWeek earlier this week. He brought it up when asked about his worst decision of the past decade.

    “Early on, we analyzed data and looked for suspicious review patterns in order to filter out [phony] reviews,” he said. “That just fueled a lot of conspiracy theories like, ‘Oh, you’re selling advertising and my reviews disappeared so therefore if I would have paid you, you would have [kept] my reviews up. But now they’re gone.’ We ultimately compromised by setting aside the filtered reviews in an area that’s visible on the site. In retrospect, we should’ve been more willing to compromise [earlier] on that with hopes that more people would understand what we are trying to do.”

    Stoppelman also defended Yelp on Charlie Rose, saying this about its rating system: “”I find it accurate. If you go and find, say, a four-and-a-half star business in New York [City] that has 70-plus reviews, you’re pretty much guaranteed a good experience.”

    Last week, the company expanded its consumer alerts, designed to let people know about fake user reviews, openly talking about users’ ability to trust the reviews they see on sites.

    Even since then, Yelp has launched the ability for users to leave reviews from their mobile devices, which is sure to greatly increase the frequency of reviews, as people (particularly those who have negative experiences) can easily whip out their phone while still at a business’ location, with their thoughts fresh in their minds, and leave a review.

    “We’ve had it out to [a limited number of] hard-core users for a couple weeks, and the data back so far has been pretty sweet,” Stoppelman told AdWeek, when asked about mobile reviews contributing to a spike in Yelp activity.

    Whatever your feeling of Yelp and its reviews, you can expect that a lot more of them will be pouring in.

    This week, Peter Shankman, a well-known angel investor put out a public Facebook post (which he also promoted) making a bet that Yelp will be out of business in two years. If he loses, he’ll put five grand towards charity.

    Post by Peter Shankman.

    He went on to tell Fast Company, “it’ll die very, very hard. If both Facebook and Google both let me type in ‘Italian Food’ and the first thing I see are three reviews from people I trust, why the f*** would I use Yelp?”

    Yelp certainly has some ideas beyond reviews from strangers. The company has been adding ecommerce and business transaction features, and we expect there are more to come.

    Despite all the negative publicity the company has had to deal with, it seems to be in pretty good shape, and Shankman might find himself paying up in a couple years. Yelp beat Wall Street expectations with its quarterly earnings, announcing that reviews were up 41% year-over-year, and average monthly visitors were up 38%. Active local business accounts grew 62%. Oh, and revenue was up 69%.

    Do you think Yelp is in any danger of not being around in two years? Let us know in the comments.

    Image: Yelp

  • Can Yelp Reviews Be Trusted?

    Can Yelp Reviews Be Trusted?

    Yelp asks in a blog post, “What good are online reviews if you can’t trust their authenticity?”

    That’s a really good question, and an important one that review sites have to grapple with as businesses and spammers constantly try to manipulate them. In some senses it’s not all that different than spammers manipulating search results, a problem that Google continues to battle. The fact of the matter is that consumers can never be 100% sure that what they’re seeing online is completely authentic. Even major websites and social media accounts are hacked on occasion. How do you know what you’re reading online is real?

    Yelp, for its part, thinks it can assure users of the authenticity of its own reviews at least. Do you trust the reviews you read on Yelp? Let us know in the comments.

    Yelp maintains that 85% of consumers rely on the Internet and review sites to find local businesses, and decide where to spend their money, and that 108 million people per month turned to Yelp last quarter. That’s a lot of people, and a lot of information about real businesses consumed. A lot of opinions shaped. A lot of decisions made about whether or not to ever set foot inside a business.

    There are those out there who are paying people for fake reviews on Yelp, and Yelp knows this. This could be people paying for fake positive reviews for their own business, or it could be fake negative reviews of competitors’ businesses.

    “We’ve always taken the quality of content on Yelp very seriously – our automatic review algorithm, user support team and flag system work overtime to monitor the content on our site,” says Yelp VP of Consumer & Mobile Products, Eric Singley. “We’ve gone to extensive measures to make sure that the consumers who come to Yelp can trust those reviews to reflect the real life experience they will have with that business.”

    Singley began his stint at Yelp working on the company’s search and consumer products, and then managing and designing its mobile apps. He currently oversees the site and apps.

    Back in October, Yelp launched its Consumer Alerts feature:

    Yelp Consumer Alerts

    These are warnings to users that appear when Yelp has found a business that has paid for reviews. Yelp removes the alert from the business’ page after 90 days, unless they find more efforts aimed at misleading users.

    Yelp started the program off with nine businesses it had already busted. It has now launched a new round of alerts.

    “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),” says Singley.

    He notes that is kind of activity is illegal, and points to FTC guidelines.

    “There will always be fraudsters out there who try to game the system, but we’re doing our best to not let that ruin the value so many millions of people get from Yelp – the trust that allows 4 out of 5 Yelp users to feel confident when consulting our site before spending money at a local business,” says Singley. “In the end, it’s up to consumers to choose a business that fits their needs, but the Consumer Alerts program is our attempt to inform them of suspicious behavior we have clearly identified.”

    So, is the attempt working? Does it make consumers trust Yelp reviews more? Some (including businesses) out there don’t trust Yelp itself. It seems the company’s service is frequently the subject of various lawsuits (often defamation), and businesses have even accused Yelp itself of extortion, claiming that it buries reviews with its filter in an attempt to get businesses to advertise on Yelp. Yelp, of course, strongly denies that this is the case. Regardless of whether or not it’s true, you have to think these claims have made an impact on Yelp’s reputation.

    Yelp has been making moves to cater more to businesses, and looks to be moving more into a direct ecommerce direction, with features like Call to Action and Transactions. Yelp also just acquired SeatMe for online reservsations, and recently started matching users’ photos with their reviews, which means more imagery for business pages.

    Whether or not Yelp is doing a good job at eliminating fake reviews is surely debatable, but you can’t deny that they’re taking the issue seriously. In June, it was reported that Yelp had filed a lawsuit against a site that sells Yelp reviews. Interestingly, that site (BuyYelpReview.com) now redirects to an article called, “Yelp and the Business of Extortion 2.0“. It’s six pages long.

    Yelp released its earnings report a couple weeks ago. It posted a 69% increase in revenue (year over year), and announced that its cumulative reviews were up 41% at over 42.5 million. Quite a few reviews. The company did not indicate whether this number included fake reviews in its announcement. Average monthly unique visitors were up 38%, and active local business accounts grew 62% to about 51,400.

    Fake reviews are not good for anyone other than those who are paying for them. They’re not good for consumers, and they’re not good for honest businesses who fall victim to shady competitors. While Yelp’s numbers are looking pretty good, they’re not good for Yelp either, and isn’t it in the company’s best interest to make sure they aren’t permeating its site, making people lose trust? If people stop trusting Yelp, they’re going to stop using it.

    The question is: Is Yelp doing a good job of containing the issue of fake reviews and maintaining user and business trust? Can you, as a business or as a consumer, trust what you read on Yelp? Let us know what you think in the comments.

  • People’s Court’s Judge Milian ‘Horrified’ By Business Owner’s Yelp Story

    Yelp is looking for increased user trust as it recently announced more consumer alerts aimed at letting users know about businesses who have been caught with fake reviews. Businesses, on the other hand, continue to voice their frustration with the popular online review site. Just see the comments on our coverage of the alerts.

    One reader pointed out that Yelp came up for discussion on a recent episode of The People’s Court. YouTube user Brock Keeling shared part of the episode:

    Not having seen the rest of the episode, it’s hard to place all of this in the context of the case at hand. Unfortunately, The People’s Court website doesn’t have the episodes archived.

    But in this clip, the business owner says, “The bad comments on the Internet were through Yelp, which to me, is a scam to begin with. If you go on that website, and searched our business name, what comes up is one or two bad statements, and if you go down on the bottom of the page, you can get down to twenty-five statements that are positive.”

    He told Judge Marilyn Milian, “Yelp contacted us, and said, ‘Well, if you advertise with us, then we’ll make sure that those get filtered out.’ We refuse to advertise, and that’s what you see when you go on Yelp.”

    Milian responded, “Wow! I don’t know if what you’re saying is accurate or not, but if it is, it’s pretty outrageous.”

    “And this is true,” she said. “It’s garbage in, garbage out with the Internet. It’s informative because you learned something you may not have known, but you always have to look at it with a skeptical eye. And then of course the other thing that business owners do is they will post forty-two positive things and just have them and their friends post a bunch of positive things, and that will push the negative down the road too.”

    “That didn’t happen,” the business owner said. “They filtered out every positive statement…and you can check that yourself.”

    “I’m horrified,” said Judge Milian.

    Yelp has been accused of the practices this man talks about repeatedly. The Washington Post recently ran a video report on this topic, prompting Yelp to take to its blog to deny such allegations.

    The company called such stories “sensational,” and said, “No, Yelp doesn’t ‘extort’ small businesses,” though clearly, not everyone is convinced.

  • You Can Now Leave Full Reviews From Yelp’s Mobile App

    Yelp should be getting a big boost to its number of reviews now that the company just announced it has added the ability to leave reviews from mobile devices.

    Starting today, iPhone users will be able to write and publish reviews from the Yelp app. The functionality will be available on Android soon.

    “Starting today, Yelpers won’t have to wait until they get home to tell the world why their neighborhood barber is deserving of five shiny stars – they can do it directly from their phones, while they’re on-the-go,” a Yelp product manager writes in a blog post. “What’s more, any photos that a Yelper has taken of the business they are reviewing will now appear in-line with their mobile reviews, similar to how they do on the website.”

    Yelp Mobile Reviews

    Yelp announced back in June that it would match users’ photos with their reviews, and display them together. This is a potentially good way for business pages to feature more imagery. According to the company, users stay on Yelp business listings 2.5 times longer when they have photos.

    “Prior to today, we offered Yelpers the option to leave a Tip after checking in at a business,” the product manager says. “Tips are still here to stay and are great for bite-sized content (i.e. “great jukebox!”). Mobile reviews are a better option for people looking to go into detail about the factors that contribute to a business’ star rating.”

    Yelp says it may post reviews that are too short as tips as it experiments with rolling out the feature. If this happens to your review, you can go back and add to it to make it become a legit review.

    Yelp says its mobile app is used on 10.4 million unique devices per month. Meanwhile, the company is battling fake reviews to maintain user trust.

  • Is Yelp Getting Better For Businesses?

    Is Yelp Getting Better For Businesses?

    Yelp has always been about helping local businesses find customers, and helping potential customers find local businesses of interest. Despite the general functionality of the service, there have been plenty of complaints from businesses who feel that Yelp has hurt their business more than helped it. The company has been making moves lately, which would seemingly make it an even more valuable tool for businesses, and it will be interesting to see if the controversies fade or linger and whether or not new ones arise.

    Do you like the moves Yelp has been making? Do you feel like Yelp is becoming a better tool for businesses? Share your thoughts in the comments.

    A few months ago, Yelp launched the Revenue Estimator tool. This lets local businesses compare their Yelp-driven business to the national average. It does the math by multiplying customer leads sent from Yelp each month by the business’s average revenue per customer lead. It also includes the average spend per customer for each business category for reference.

    “We think this new tool will be helpful to business owners for two reasons,” Yelp said upon the tool’s release. “First, it helps quantify the revenue opportunity Yelp is already sending to each business. Second, it establishes a revenue baseline for prospective advertisers, from which they can later evaluate the impact of their investment in Yelp Ads.”

    Yelp Revenue Estimator

    CEO Jeremy Stoppelman recently discussed plans for launching ecommerce tools for businesses.

    Yelp goes “far beyond restaurants,” he said at the Le Web conference earlier this month. “I think the number one category right now is shopping, so boutiques, places to buy different things…and so it covers the full range…the Yellow Pages traditionally didn’t cover things like shopping and didn’t really cover things like restaurants, but Yelp obviously cover those pretty well, but goes into the traditional Yellow Pages categories too, like doctors and hair salons, and plumbers.”

    Interviewer Loic Le Meur noted that the next logical step for the company could be to start actually selling products.

    After saying, “mmm hmm” and nodding his head, Stoppelman added, “I think that is an interesting direction, and it’s one we’ve got a toe in the water, but I see a lot of potential, and that is, we have all these people that are essentially shopping online for something offline, and so why not offer those consumers a way to close the transaction? We already do that with OpenTable Top Tables, so you can book your reservation from your iPhone or your Android device.”

    “This is an area that we’re interested in,” he added. The way to think about it is “Yelp as a platform,” he said.

    “We’re aggregating all these consumers,” Stoppelman continued. “They’re doing their shopping today, and the problem is that they’re just not closing their transaction. And so you can imagine that you might be able to plug in services like OpenTable for all sorts of verticals, and that could be a really interesting business for us.”

    Last week, Yelp launched a feature that encourages transactions. That didn’t take too long. It’s called the “Call to Action” feature, and is available to Yelp advertisers.

    “It will allow biz owners to promote a desired transaction of their choosing directly on their Yelp business listing,” a spokesperson for Yelp told WebProNews. “For example, Ticketmaster, one of the companies we’re launching with, has been using the feature on Yelp listings for over 2,000 live entertainment venues to guide consumers seamlessly from Yelp directly to the Ticketmaster page where they can purchase tickets.”

    “According to a recent BCG study, advertisers on Yelp report seeing an average of $23,000 in annual revenue from the site,” the company said in a blog post. “Yelp’s Call to Action feature, available now to Yelp advertisers, is designed to increase the revenue potential Yelp provides to business owners, with the ability to promote a specific action they’d like consumers to take. The Call to Action feature will take consumers seamlessly from a business’ Yelp listing to the the business’ own website to complete the transaction — be it scheduling an appointment, printing a coupon, buying tickets to see ‘N Sync (still holding out hope for a reunion tour!), or any other action a business wants to promote.”

    Business owners who want to try out the new feature are advised to start at Yelp’s advertising page.

    Even since then, Yelp has added another feature, adding user-uploaded photos in-line with review text on business reviews. Yelp matches the photos and reviews that are contributed by the same people and displays them together on the business’ Yelp page.

    “We have always said that what sets Yelp apart from other review sites is our community of Yelpers who come to the site to contribute rich content,” said Yelp UI designer Allison Shaw. “Not only are they writing reviews about their experiences with all types of local businesses, they’re also uploading photos. We’re continually working to make the content on Yelp as helpful as possible for people looking to make a spending decision.”

    This month, Yelp also started using more data for “nearby” suggestions in its iPhone app (the update will come to Android in the coming months). This makes Yelp a more effective local search tool for users. Suggestions are based not only on location, but also on previous Yelp check-ins, reviews, Yelp friends, time of day, weather, etc.

    Nearby

    Today, Yelp shared some findings from a Nielsen survey, indicating that four out of five Yelp users visit the site when preparing to spend money at a local business.

    “Why is this important?” asks Matt H., VP Revenue & Analytics at Yelp. “Because it reinforces what we already know – that Yelp users are searching for local businesses with the intent to spend money, and they’re using Yelp to decide where to do it. With a monthly average of 102 million unique visitors (as of Q1 2013), that’s a lot of spending power channeled through Yelp. In fact, just last week we introduced Call to Action, another new feature that helps business owners close this loop between discovering a business on Yelp and making a transaction.”

    According to the survey, 99% of Yelp users have made a purchase at a business they found on Yelp, with nearly 90% of them doing so within a week.

    Do you think Yelp is getting better for businesses? Let us know in the comments.

  • Yelp Sues Site That Sells Yelp Reviews

    Ever tried to purchase a Yelp review? There are sites out there that sell them. One is called BuyYelpReview.com, and it’s currently being sued by Yelp, so you might want to hold off if you’re getting any shady ideas.

    Yelp filed a complaint in the U.S. District Court of Northern California seeking for the site to be shut down immediately by court order. It also seeks for those behind the site to pay Help back for legal fees and three times what the site made from selling reviews. Here’s the complaint (via The Daily Dot):

    Yelp v. Catron (1)

    Here are some snippets from BuyYelpReviews’ site:

    Buy Yelp reviews from the most trusted source in the industry. We offer 100% real reviews from aged accounts. All have real friends, activity, check-ins etc.. Using our in house Yelp experts we form high quality reviews that will not be filtered out. We analyze all aspects of your business and ensure that your reviews are realistic. Receive unlimited 5 star reviews and start attracting more customers.

    …

    Whether you own a restaurant, salon, hotel or an automobile shop, having an impressive virtual presence matters. It has been proven by research that most consumers resort to the Web to review businesses and services. Buy Yelp Reviews For Your Business Today!

    …

    If you have existing bad Yelp reviews, no worries. We will ensure that your customers see your good reviews first. Customers may leave bad reviews now and then, it doesn’t need to be the end of your business.

    It makes you wonder how many Yelp reviews come from practices like this. The site even promises its reviews will come from the city that your business is located in. Wow. Just how big is this operation?

    So far, the site appears to be up and open for business. Each review is $24.95 with a minimum purchase of 3 reviews.

  • Yelp Matches Users’ Photos With Their Reviews, Displays Them Together

    Yelp announced today that it will now display user-uploaded photos in-line with review text on business reviews. This will put imagery more directly in users’ faces, obviously.

    Yelp simply matches photos and reviews contributed by the same Yelp user for the same business, and displays them together on the business’ Yelp page.

    “We have always said that what sets Yelp apart from other review sites is our community of Yelpers who come to the site to contribute rich content,” writes Yelp UI designer Allison Shaw. “Not only are they writing reviews about their experiences with all types of local businesses, they’re also uploading photos. We’re continually working to make the content on Yelp as helpful as possible for people looking to make a spending decision.”

    Yelp Photos inline

    “Now, in addition to pulling out all the literary stops to describe the amazing experience they had at their favorite hair salon, Yelpers’ photographic proof will be right there to give others a visual of their handsome new ‘do,’” says Shaw.

    According to the company, users stay on Yelp business listings 2.5 times longer when they have photos.

    The feature is currently live on Yelp.com and the mobile site.

    Earlier this week, Yelp announced a new e-commerce feature for advertisers, enabling customers to pay businesses right from Yelp. CEO Jeremy Stoppelman had hinted at such features earlier this month at Le Web.

  • Yelp: Consumers, On Average, Can Rely On Our Content

    At the LeWeb conference in London this week, Yelp CEO Jeremy Stoppelman took to the stage to discuss his business with host Loic Le Meur. Inevitably, the topic of fake reviews and the Review Filter came up. This has been a bit of a controversial feature for businesses with some accusing Yelp of hiding positive reviews with the filter as a move to get the businesses to advertise. Though Yelp addressed such accusations in a recent blog post, Stoppelman didn’t get into that aspect of it here, and surprisingly nobody asked about it in the Q&A.

    Are Yelp reviews a reliable source of information for consumers in your opinion? Tell us what you think.

    “Fake reviews [are] a constant battle,” said Stoppelman. “It’s something that we’ve faced from literally day one. Within a couple weeks of launching the site, we saw our first fake reviews. My co-founder and I knew immediately that we were going to have to solve this. So we set about finding an algorithmic solution, much like Google, and we call it the Review Filter. What it does is it looks at patterns of behavior on the site, and tries to decide as accurately as possible which reviews really can be relied on by consumers in the community and which we’re unsure about, we should set aside. And so on every business page, at the bottom, there’s a little link that says how many reviews have been filtered, and you can go follow that link, and see what we’ve taken off of that page. I think that’s been one of our, frankly, keys to success is that consumers, on average, can rely on the content they see on Yelp.”

    Stoppelman continued, “We’re going to do our best to identify those strange patterns, and pull that content down, and so it does…it’s a new thing, and it’s caught businesses off guard because you know, frankly, the world prior to that, you know, sites like CitySearch and so forth, really didn’t spend a lot of time trying to protect against that, and so businesses got into the habit of just ‘Hey, if I want to be five stars, I just need to get enough friends to review me or I need to write enough fake reviews,’ and we’ve made sure that Yelp…you can’t do that. It’s not gonna work.”

    Stoppelman told Le Meur that Yelp is ‘disrupting the Yellow Pages”.

    “The Yellow Pages world was one of completely pay-to-play,” he said. “So if you had a local business, and you really wanted to be seen, you had to just pay an enormous amount of money, and that was it. Yelp turns that on its head, and actually puts consumers first. And so in our world now, if you’re a great local business, you actually get some exposure for free because your reviews speak for themselves. That’s going to get you some additional eyeballs, so that’s going to turn into some customers. If you want to go beyond that, and actually get some additional traffic, that’s where the advertising model comes in.”

    It’s that advertising model that has led some businesses to go so far as to accuse Yelp of extortion, an accusation that the company takes a great deal of offense to.

    Businesses have been throwing around such allegations for quite some time, but last month, the discussion came into a greater focus – so much that Yelp felt it needed to take to its corporate blog to defend itself. The post, titled, “No, Yelp Doesn’t ‘Extort’ Small Businesses. See For Yourself,” pointed specifically to a story run by The Washington Post full of businesses alleging wrongdoing on Yelp’s part.

    The basic story, according to the report, is that a business gets a bunch of new customers because of reviews on Yelp, then Yelp reaches out to the business to advertise. If it doesn’t advertise, then the positive reviews start disappearing, and only negative or indifferent reviews stay, while the positive ones get buried in the filtered section, which is accessed when a user clicks and enteres a CAPTCHA.

    Yelp maintains that advertiser data is not taken into account with the filtered section, but one business in the Washington Post’s story went so far as to say that a Yelp salesperson said they would unfilter filtered reviews if they advertised. The business owner claimed they did some “small scale” advertising, and “magically,” five or six of the filtered reviews became unfiltered.

    But nobody has been able to prove any of this, and Yelp says this is all simply false.

    But the complaints don’t stop with a few “sensational” (as Yelp calls them) reports. On our own coverage of the story, we’ve seen numerous readers express anger with Yelp.

    Either way, users continue to flock to Yelp, and Yelp maintains that it’s generally reliable. Earlier this year, Yelp topped 100 million unique monthly visitors for the first time ,and in May, it revealed that its average uniques grew 43% year-over-year to 102 million, while revenue was up 68% year-over-year.

    As a business, do you feel Yelp is presenting consumers with a reliable representation of your business? As a consumer, do think it has been reliable? Let us know in the comments.

  • Google Updates Spam Detection For Reviews, Warns SEOs

    Google announced that it has made some improvements to its spam detection algorithms that increased the number of reviews that appear on some Google+ Local pages.

    Do you think things have gotten better? Let us know in the comments.

    Google’s Dasha made the announcement in a Google Groups forum thread (via Search Engine Roundtable).

    “Online reviews have been in the news a lot recently, and we at Google are committed to helping people to get ratings, reviews, and recommendations that are relevant, helpful, and trustworthy,” Dasha says. “To protect both business owners and customers from spam reviews, we have systems in place that may remove individual reviews.”

    Reviews have been in the news, mostly because of defamation suits. We recently looked at one particular case where a contractor sued a woman who accused him of being a thief in reviews on Yelp and Angie’s List. On top of that, a court ordered her to change her reviews, until another judge reversed that decision, saying (in a nutshell) that she could leave the reviews up until she was proven guilty. But that’s a whole other conversation. This is about spam.

    “No one likes spam, and we’d like to talk about what you can do to make sure all of the reviews on Google+ Local are useful, honest, and written by real people!” adds Dasha.

    Some Warnings

    Google advises business owners to be wary of SEO and reputation management services that promise to generate reviews, and Google says it will take down fake “glowing testimonies”. The company also notes that it does not take down negative reviews for just being negative for anyone, and instead advises business owners to respond themselves. Google also says not to trust anyone who says they know how to remove reviews from Google.

    Interestingly, a specific guideline Google lists for business owners is to not set up a computer or tablet in their place of business customers can leave reviews on site. The company also reminds business owners that it doesn’t allow them to give customers free gifts or discounts in exchange for reviews. It’s kind of like the whole paid links thing.

    Google tells SEOs specifically, “If a business accepts paper comment cards it might be tempting to collect them and “digitize” them by posting the reviews on Google+ Local. We ask that all reviews come from first hand experience and do not allow posting reviews on behalf of others.”

    Additionally, Google encourages users to report reviews that are in violation of its policy guidelines. There’s a gray flag icon next to reviews for that purpose. From there, users can fill out a form. Google does not follow up individually, however.

    Google tells reviewers to read the guidelines here, and reminds those who want to leave reviews for multiple locations of the same business to tailor each review to a specific location. They also advise against writing reviews for your current employer, as this is against the rules as well. Also, don’t put URls in the text of your reviews, because they’ll treat it as spam.

    Google Must Keep Up The Quality

    It’s going to be increasingly important for Google to keep up the quality of its local search results. Google may dominate the search landscape, but local is one area where there is real potential for other players to make a mark. One such player is Facebook.

    Facebook launched Graph Search in January, and is only just getting started. So far, it’s pretty much a novelty, but there is a lot of potential for it to grow into something much bigger, and as I discussed in a recent article, local search is one area where it could quickly take a stab at Google. It really depends on how much people use it. It hasn’t even rolled out to everyone yet, and it’s going to get much more feature rich as time goes on (including the addition of open graph – the Facebook-connected web – which is essentially most of the web).

    Bars Friends Like

    Of course, there are already plenty of other mobile apps that must be already taking away some amount of Google’s local search market share. The point is, Google needs to stay at the top of its game, which is where spam control is of the utmost importance.

    Google also added Place Summaries to its Google Places API last month, meaning developers can use review info in their apps. That’s important too.

    Other recent improvements include the addition of new photo sharing options and store interior photography access to local search results.

    No matter how many nice features Google adds though, it has to keep quality up on results. Just as this is an ongoing issues for web search, it appears to be one for local search as well. In addition to spam issues, Google has also had issues where anonymous reviews were making it to business listings, even though Google has moved to a policy against this. This was reported on in January (and had even been happening for months), and we’ve really yet to see any headway made there. Google said it was looking into it, but we’re not sure what they found. The specific example we looked at still has the anonymous reviews.

    Is Google getting better at local search? Let us know what you think.

  • Yelp Earnings: Net Revenue Up 65% Year-Over-Year

    Yelp released its Q4 and full-year 2012 earnings report on Wednesday after market close. The company posted net revenue of $41.2 million for the quarter, a 65% year-over-year increase. Yelp also posted a $5.3 million net loss for Q4.

    Cumulative reviews grew 45% year-over-year to over 36 million by the end of the year. Average unique monthly visitors grew 31% year over year to about 86 million. Active local business accounts grew 68% year-over-year to approximately 39,800.

    Yelp also announced that in January, it surpassed 100 million uniques for the first time, and put out an infographic about it.

    CEO Jeremy Stoppelman said, “2012 was a tremendous year for Yelp. We completed a successful IPO, launched new products to improve the Yelp experience for consumers and business owners, expanded into new markets while increasing our presence in existing ones, and completed our first acquisition. We believe 2013 will be a tipping point for our brand in Europe as Yelp continues to become a trusted local resource. Our mobile strategy will remain a top priority as engagement increases, and we will continue to focus on the business owner, creating more ways to measure the value of Yelp leads.”

    Here’s the release in its entirety:

    SAN FRANCISCO, Feb. 6, 2013 /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 ended December 31, 2012.

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

    • Net revenue was $41.2 million in the fourth quarter of 2012, reflecting 65% growth in net revenue from the fourth quarter of 2011
    • Cumulative reviews grew 45% year over year to more than 36 million at the end of 2012
    • Average monthly unique visitors grew 31% year over year to approximately 86 million*
    • Active local business accounts grew 68% year over year to approximately 39,800

    Net loss in the fourth quarter of 2012 was $5.3 million, or $0.08 per share, compared to a net loss of $9.1 million, or $0.56 per share, in the fourth quarter of 2011.  Adjusted EBITDA for the fourth quarter of 2012 was approximately $1.8 million, compared to an Adjusted EBITDA loss of $15,000 for the fourth quarter of 2011.

    Net revenue for the full year ended December 31, 2012 was $137.6 million, an increase of 65% compared to $83.3 million in the same period last year.  Net loss for the full year ended December 31, 2012 was $19.1 million, or $0.35 per share, compared to a net loss of $16.9 million, or $1.10 per share, for the comparable period in 2011. Adjusted EBITDA for the full year 2012 was approximately $4.6 million compared to an Adjusted EBITDA loss of $1.1 million for the prior year.

    “2012 was a tremendous year for Yelp,” said Jeremy Stoppelman, Yelp’s chief executive officer. “We completed a successful IPO, launched new products to improve the Yelp experience for consumers and business owners, expanded into new markets while increasing our presence in existing ones, and completed our first acquisition.  We believe 2013 will be a tipping point for our brand inEurope as Yelp continues to become a trusted local resource.  Our mobile strategy will remain a top priority as engagement increases, and we will continue to focus on the business owner, creating more ways to measure the value of Yelp leads.”

    “Yelp continued to deliver growth and scale in 2012 with both revenue and Adjusted EBITDA ahead of our expectations,” added Rob Krolik, Yelp’s chief financial officer.  “These results, along with our strong operating metrics, demonstrate that our playbook continues to deliver growth across Yelp markets.”

    2012 Business Highlights

    • New market expansion: Yelp continued to launch new markets globally, accelerated its presence in Germany and U.K with the acquisition of Qype and opened its first international sales office in London. In the fourth quarter Yelp launched Poland andTurkey, bringing the total number of worldwide Yelp countries to 20.
    • Yelp mobile:  Yelp focused on enhancing the mobile experience, including the launch of local ads on apps. In the fourth quarter, 25% of local ads were shown on mobile devices and the mobile app was used on approximately 9.2 million unique mobile devices on a monthly average basis.
    • Increased brand distribution: Yelp branded content was integrated into the new Apple “Maps” application on iOS 6. Yelp also partnered with Bing to power their local business pages, and was incorporated into Mercedes and Lexus in-vehicle infotainment systems.
    • New products: Yelp introduced new features and enhancements throughout the year including dashboard metrics for business owners and a redesigned homepage placing a greater emphasis on the social graph and mobile activity. Yelp also introduced new products such as gift certificates and Yelp Menus.

    Business Outlook

    As of today, Yelp is providing guidance for the first quarter and full year of 2013.

    • For the first quarter of 2013, net revenue is expected to be in the range of $44.0 million – $44.5 million representing growth of approximately 62% compared to the first quarter of 2012. Adjusted EBITDA is expected to be in the range of $1.25 million -$1.50 million.
    • For the full year of 2013, net revenue is expected to be in the range of $210 million – $212 million, representing growth of approximately 53% compared to the full year of 2012. Adjusted EBITDA is expected to be in the range of $20 million to $22 million.

    Quarterly Conference Call

    To access the call, please dial (866) 770-7120, or outside the U.S. (617) 213-8065, with Passcode 89233749, 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 3:30 p.m. PT February 6, 2013 and 11:59 p.m. PT February 20, 2013by calling (888) 286-8010 or (617) 801-6888, with Passcode 31161883. 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 US, Canada, UK, Ireland, France, Germany, Austria, The Netherlands, Spain, Italy, Switzerland, Belgium, Australia, Sweden, Denmark, Norway, Finland, Singapore, Poland and Turkey. Yelp had a monthly average of approximately 86 million unique visitors in the fourth quarter 2012*. By the end of the same quarter, Yelpers had written more than 36 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. Yelp’s mobile applications were used on approximately 9.2 million unique mobile devices on a monthly average basis during the fourth quarter 2012.

    * 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 measure.” 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.

    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 consider any dilutive impact of our contribution to The Yelp Foundation;
    • adjusted EBITDA does not take into account any 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 adjusted EBITDA guidance to net income (loss) guidance because it does not provide guidance 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 guidance. Accordingly, reconciliation to net income (loss) outlook for the first quarter of and full year 2013 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 2013, the future growth in Company revenue and continued investing by the Company in its future growth and the Company’s ability to build Yelp communities internationally and expand its markets and presence in existing markets. 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; 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; and 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 twelve months ended December 31, 2012 could differ from the preliminary results we have announced in this press release.

    Media Contact Information
    Yelp Press Office
    Stephanie Ichinose
    (415) 908-3679
    [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,
    2012 2011
    Assets
    Current assets:
    Cash and cash equivalents $          95,124 $          21,736
    Accounts receivable, net 11,474 8,257
    Prepaid expenses and other current assets 4,912 1,733
    Total current assets 111,510 31,726
    Property, equipment and software, net 14,799 9,881
    Goodwill 48,735 –
    Intangibles, net 5,942 –
    Restricted cash 6,400 365
    Other assets 310 1,849
    Total assets $        187,696 $          43,821
    Liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit)
    Current liabilities:
    Accounts payable $            2,284 $            2,973
    Accrued liabilities 16,367 7,685
    Deferred revenue 2,856 2,072
    Total current liabilities 21,507 12,730
    Long-term liabilities 527 3
    Total liabilities 22,034 12,733
    Commitments and contingencies
    Redeemable preferred stock – 55,435
    Stockholders’ equity (deficit)
    Common stock – –
    Additional paid-in capital 225,245 16,625
    Accumulated other comprehensive  income 805 271
    Accumulated deficit (60,388) (41,243)
    Total stockholders’ equity (deficit) 165,662 (24,347)
    Total liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit) $         187,696 $           43,821

     

    Yelp Inc.
    Condensed Consolidated Statements of Operations
    (In thousands, except per share amounts)
    (Unaudited)

     
    Three Months Ended Twelve Months Ended
    December 31, December 31,
    2012 2011 2012 2011
    Net revenue $ 41,157 $ 24,905 $ 137,567 $  83,285
    Cost and expenses
    Cost of revenue (1) 3,003 1,833 9,928 5,931
    Sales and marketing (1) 25,511 16,024 85,915 54,539
    Product development (1) 6,244 3,162 20,473 11,586
    General and administrative (1) 7,852 5,267 31,531 17,234
    Depreciation and amortization 2,421 1,448 7,223 4,238
    Restructuring and integration costs 1,262 – 1,262 –
    Contribution to The Yelp Foundation – 5,928 – 5,928
    Total cost and expenses 46,293 33,662 156,332 99,456
    Loss from operations (5,136) (8,757) (18,765) (16,171)
    Other expense, net (203) (252) (226) (395)
    Loss before provision for income taxes (5,339) (9,009) (18,991) (16,566)
    (Provision)/Benefit for income taxes 20 (37) (122) (102)
    Net loss (5,319) (9,046) (19,113) (16,668)
    Accretion of redeemable convertible preferred stock – (48) (31) (189)
    Net loss attributable to common stockholders $ (5,319) $ (9,094) $ (19,144) $ (16,857)
    Net loss per share attributable to common stockholders:
    Basic $   (0.08) $   (0.56) $     (0.35) $     (1.10)
    Diluted $   (0.08) $   (0.56) $     (0.35) $     (1.10)
    Weighted-average shares used to compute net loss per share attributable to common stockholders:
    Basic 63,015 16,097 54,151 15,291
    Diluted 63,015 16,097 54,151 15,291
    (1) Includes stock-based compensation expense as follows:
    Three Months Ended Twelve Months Ended
    December 31, December 31,
    2012 2011 2012 2011
    Cost of revenue $        38 $        17 $        122 $         50
    Sales and marketing 1,746 496 4,917 1,607
    Research and development 696 164 1,705 721
    General and administrative 778 689 8,134 2,499
    Total stock-based compensation $   3,258 $   1,366 $   14,878 $    4,877

     

    Yelp Inc.
    Condensed Consolidated Statements of Cash Flows
    (In thousands)
    (Unaudited)
    Twelve Months Ended
    December 31,
    2012 2011
    Operating activities
    Net loss $ (19,113) $ (16,668)
     Adjustments to reconcile net loss to net

    cash (used in) provided by operating activities:
    Depreciation and amortization 7,223 4,238
    Provision for doubtful accounts 599 35
    Stock-based compensation 14,878 4,877
    Contribution to The Yelp Foundation – 5,928
    Loss on disposal of assets and web-site development costs 64 13
    Changes in operating assets and liabilities:
    Accounts receivable (2,017) (1,682)
    Prepaid expenses and other assets (2,384) (1,099)
    Accounts payable and accrued expenses 70 3,975
    Deferred revenue (443) 633
    Net cash (used in) provided by operating activities (1,123) 250
    Investing activities
    Acquisition of Qype GmbH, net of cash received (24,125) –
    Purchases of property, equipment and software (7,524) (4,798)
    Capitalized website and software development costs (2,930) (2,506)
    Change in restricted cash (6,013) (149)
    Cash used in investing activities (40,592) (7,453)
    Financing activities
    Proceeds from initial public offering, net of underwriter fees 114,006 –
    Payments for deferred offering costs (1,749) (456)
    Proceeds from issuance of common stock 3,675 2,038
    Repayment of acquired debt (1,308) –
    Net cash provided by financing activities 114,624 1,582
    Effect of exchange rate changes on cash 479 283
    Net increase in cash and cash equivalents 73,388 (5,338)
    Cash and cash equivalents at beginning of period 21,736 27,074
    Cash and cash equivalents at end of period $95,124 $21,736

     

    Yelp Inc.
    Reconciliation of Net Loss to Adjusted EBITDA
    (In thousands)
    (Unaudited)
    Three Months Ended Twelve Months Ended
    December 31, December 31,
    2012 2011 2012 2011
    Net loss $ (5,319) $ (9,046) $ (19,113) $ (16,668)
    Provision for income taxes (20) 37 122 102
    Other income (expense), net 203 252 226 395
    Depreciation and amortization 2,421 1,448 7,223 4,238
    Stock-based compensation 3,258 1,366 14,878 4,877
    Restructuring and integration costs 1,262 – 1,262 –
    Contribution to Yelp Foundation – 5,928 – 5,928
    Adjusted EBITDA $  1,805 $      (15) $    4,598 $   (1,128)

     

    SOURCE Yelp Inc.

  • Yelp Tops 100 Million Uniques For First Time

    Yelp announced today that it surpassed 100 million unique vistors on its site in January, marking the first time in Yelp history it has had that many uniques in a month.

    “That’s an all-time high for traffic to the desktop and mobile site and a clear indication that people are looking for local businesses and finding them on Yelp,” said CEO Jeremy Stoppelman in a blog post. “While that number is huge, it doesn’t even include the 9.4 million unique mobile devices that used the Yelp mobile app in January alone.”

    “Even more staggering than 100 million unique visitors using Yelp.com in January are the millions of contributions Yelpers made to the community in the same time frame,” he added. “The 4.6 million calls and 5.7 million directions generated through the Yelp mobile app and nearly 2 million bookmarks created by Yelpers are the connection between searching for a specific local business and making a spending decision.”

    According to Stoppelman, who cites a recent survey, business owners on Yelp report that the average customer across all categories spends $101.59 in their first visit.

    The company has put out this infographic to accompany its impressive traffic news:

    Yelp 100 million

  • Google Is Letting Anonymous Users Review Businesses

    Online reviews are a hot button issue right now, particularly as one case involving Yelp reviews has attracted some media attention. You can read about that here. Basically, a woman was sued for defaming remarks, as she claimed in reviews on Yelp and Angie’s List that a contractor had stolen jewelry from her, which she has so far been unable to prove. She was initially ordered to change her reviews, but the Virginia Supreme Court overturned that decision, indicating that a jury would have to find her guilty before the reviews would be required to be removed.

    As WebProNews readers have indicated in various comments, a lot of business owners feel that the reviews shouldn’t be allowed to remain up, as the business stands to lose potential customers as a result, which of course, is the basis of the suit to begin with.

    Accountability for online reviews is a big issue for businesses who face damage to their reputations. Google recognizes this, and last year, when they moved to the Google+ Local model for local search, the company was supposed to have started requiring users to be signed into their Google accounts, which would be accompanied by their names/profiles, to post reviews. This would ensure accountability for what is said in these reviews.

    Upon trying to write a business review while logged out of Google, I am personally prompted to sign in.

    However, Google appears to still be letting anonymous reviews through. Instead of the reviewers name, it may say “A Google User”.

    Barry Schwartz at Search Engine Roundtable points to a Google Business Help thread, where a business owner complains about this problem:

    About five weeks ago we started asking our patients to write reviews about us and our practice in our Google+ Local page (https://plus.google.com/101314730224126339952/about?hl=en sorry, I don’w know why but I can’t embed the link). We only have one page as Google already merged our Google Places and previous Google+ page.

    We have noticed than some reviews appear to be written as “A Google User” instead of displaying the actual name of the review’s author.

    Does anybody know why this is happening? As far as I know there’s no way for google users to ask to post a review anonymously.

    I’m concerned about this as positive anonymous reviews are sometimes perceived as spam or false reviews, damaging our reputation.

    Google’s Jade Wang responds in the thread, saying, “Thanks, all — we are investigating.”

    The response was from yesterday. The anonymous reviews are still showing:

    A Google User

    Schwartz also notes that this has been happening for months.

    In the thread, one user says Google may show “A Google User” for reviews that were created before the changes, but they shouldn’t be displaying this way for reviews that recent. Wang’s acknowledgement seems to suggest that Google will fix this.

    Luckily for this particular business, these particular reviews are positive.

  • Yelp Reviews Ruled Free Speech Until Proven Defamatory. Right Call?

    Last month, in a case of free speech vs. business reputation, a Virginia judge ordered Yelp (and Angie’s List) user Jane Perez to change negative reviews on the sites, which cast a contractor as a thief. The contractor, Christopher Dietz (of Dietz Development), sued Perez for $750,000 in damages in a defamation case, claiming to have lost business (as much as $300,000) because of her negative postings. You can read the lawsuit here (pdf).

    The reviews in question indicate that Perez found her jewelry missing, and that “Dietz was the only one with the key.” One could see where a consumer might steer clear of a contractor with such a review. The problem, however, is that Perez has so far not been able to prove that Dietz stole her jewelry, and it’s basically one person’s word vs. the other’s. In addition to ordering her reviews changed, the injunction prevented Perez from being able to make similar claims on other sites.

    Do you think Perez’s negative reviews should be allowed to remain online? Let us know in the comments.

    The case goes on. However, since Perez was ordered to change her reviews, the ACLU and Public Citizen appealed the Fairfax County Judge’s decision in the name of free speech, and it went to the Supreme Court of Virginia, which overturned the temporary inunction, ruling:

    “Upon further consideration whereof, the Court also finds that the preliminary injunction was not justified and that the respondents have an adequate remedy at law.

    “This order shall be certified to the said circuit court.”

    In other words, the court found that Perez shouldn’t have to change the reviews as long as they have yet to be proven libelous, and being sued for damages was enough. Whether or not Dietz gets his victory, remains to be seen, but in the meantime, it looks like Perez’s words will be allowed to remain in tact. If they are found to be libelous, they would be required to be removed from the sites. That just has to be proven first, and in the meantime, it may still be costing Dietz some business.

    Interestingly, there is currently only one review listed for Dietz Development on Yelp, and it simply says: “I read about how these people sued a woman for giving them a negative review on Yelp. Scary stuff.”

    The review is accompanied by a single star rating, and it is the first thing you see when you search ro “Dietz Development” in Google:

    Dietz Development on Google

    It’s unclear why Perez’s review is not currently showing up on Yelp, in light of recent legal events. It is also interesting that while Yelp is only showing this single review (which, by the way, really isn’t about the business itself), it has 8 other reviews marked “filtered,” which it does not show unless you click the link, which also requires you to enter a CAPTCHA. Reviews in this section are mixed. Some are clear responses to the lawsuit, like:

    “They do shady work and then sue people if they post a negative review about them. Not cool.”

    …

    “Had my bathroom done in Fall 2011. It was an absolute nightmare. There was continuous argument over the crew not following my wishes. The project ended up looking terrible and they refused to make any changes without additional payment. Avoid this place at all costs.”

    …

    “I hired Dietz Development to build me a room/addition to my house for $20,000 and it would only take 2 weeks….somehow, they did a demolition job instead and dynamited everything, so now I have no house, just a hole in the ground! Plus the final bill was $30,000 (and it took them THREE weeks, not two!!!) Hey, at least my jewelry isn’t missing.”

    One simply says, “Called to get a quote, the person on the phone was very rude, I wish I had gotten his name. I did not use them based on customer service.”

    The other half of the reviews are quite positive, each with 5-star ratings. One user says, “Having SEEN the work this contractor does and MEETING him in the flesh, I can say you can expect top notch service from Dietz Development. Pay no mind to hateful hipsters who post negative reviews of a company they have no knowledge of.”

    Then, there are 65 reviews that Yelp says have been removed for violating content guidelines or terms of service. I would imagine that a number of people have dropped by the page to say something in response to the suit.

    Yelp’s filtering of reviews is automated. CEO Jeremy Stoppelman talks about it here. Here’s a video about it:

    Public Citizen, which has maintained an archive of court documents related to this case, called the Supreme Court’s decision “a positive move for free speech on the Internet”. In a press release, the organization wrote:

    Public Citizen argued that the contractor could get damages if, after a full trial, a jury agrees that Perez made false claims about him that meet the standard for libel. Because such a process has not occurred, forcing Perez to remove her comments amounted to censorship.

    “The decision confirms the importance of not shutting down public discussion on the Internet just because someone doesn’t like what’s being talked about,” said Paul Alan Levy, an attorney for Public Citizen. “Review sites like Yelp are vehicles for the free flow of ideas by helping consumers make informed decisions on how to spend their hard-earned dollars.”

    This is far from the first time a business has sued a consumer for negative reviews on sites like Yelp and Angie’s List. The outcomes have varied. As Bob Sullivan at NBC’s Red Tape points out, “An Oregon judge dismissed one lawsuit filed by a dentist earlier this year. Months earlier, a similar lawsuit filed by a church pastor was also dismissed. On the other hand, a case filed by a neurologist in Minnesota after negative comments was initially dismissed, but reinstated by a state appeals court earlier this year. And there are dozens of other ongoing cases — many involving health care — including one involving a Chicago plastic surgeon suing former patients for $100,000 after they criticized his work online.”

    “Still, the threat of a libel lawsuit has become a more common tactic by businesses trying to dissuade consumers from making critical comments in public forums,” he adds. “A Red Tape reader in Ohio complained last month that she was threatened with such a lawsuit after she placed a sign on her front lawn criticizing a home alarm company.”

    As far as review sites go, the companies behind them have protections against being held accountable for what users write in their policies, and in Section 230 of the Communications Decency Act.

    Liz Gannes at All Things D shares this statement from Yelp:

    Consumer freedom of speech provides an important public service, protected by law. Yelp provides a valuable contribution to this dialogue by providing a two-way platform for consumers to share their experiences and for businesses to respond to their customers. Courts have consistently ruled that consumers have the right to share their truthful experiences. As a result, businesses that choose to sue their customers to silence them rather than address their comments, rarely prevail and often bring additional unwanted attention to the original criticism.

    To that point, TechDirt’s Mike Masnick makes an interesting point about Dietz’s suit: “Whether or not the original allegations were true, now he’s made it clear that he’s willing to sue over reviews as well. It seems like most people might see that and decide to hire a contractor who not only has good reviews, but doesn’t have a history of suing his customers over their online reviews.”

    As we can see from the reviews currently on Yelp, consumers will see that he has sued.

    Reactions to the Dietz/Perez case from WebProNews readers have been mixed, but as business owners, many have sided with Dietz. Online reputation is indeed a serious issue for businesses. There’s no denying Dietz has a valid point about that. Negative reviews can hurt businesses financially, and if there are false accusations about your business out there, you obviously want to get them cleared up. It will be interesting to see how swiftly the courts are able to get the whole case sorted out. Regardless of which side is right, Dietz stands to lose business as it goes on.

    Do you think the courts got this one right so far? Let us know what you think in the comments.

  • Court Orders Yelp User To Change Review. Slippery Slope?

    This week, a Virginia judge ordered a Yelp user to change a negative review. Before we get into the specifics, just think about that for a second. Do you use Yelp (or any other service for that matter) to discuss your experiences at restaurants or with other businesses? Have you ever left a negative review of a business? Depending on what you say and how the business in question reacts, that freedom of speech thing you’ve grown so fond of may not be enough to hold up in a court of law.

    Should courts be able to make people change what they say online? Tell us what you think.

    On the flipside, however, as a business, should you not have legal recourse for accusations you believe to be false, in order to protect your business’ reputation, and avoid losing potential customers? It’s a tricky debate, and any legal rulings could have far-reaching implications for future cases. On the one hand, ruling against the reviewer risks opening the floodgates for such suits which could ultimately cost average consumers not only their voice, but unaffordable legal fees. On the other hand, ruling in favor of the reviewer could leave room for all kinds of smear campaigns from disgruntled consumers or even ex-employees of businesses who did not leave on the best of terms. It could, as one business claims, cost said business a great deal of money in lost customers.

    Now, let’s look at what we’re dealing with here. Jane Perez was sued by Dietz Development, a building contractor, who claims to have lost business because of her negative postings on sites like Yelp and Angie’s List. He sued for $750,000, and claimed that he lost $300,000 because of her words.

    What was so bad about the reviews? Perez reportedly indicated that the company had caused damage to her home, trespassed, and even stolen jewelry. According to reports, the judge granted a temporary injunction, and ordered Perez to change parts of the Yelp review – specifically the part about jewelry theft, which had said, “I found my jewelry missing and Dietz was the only one with a key.” She was also reportedly ordered to nix a part mentioning a previous lawsuit that Dietz had filed.

    Mail Online talked to Perez’s attorney, who is quoted as saying, “Obviously this is very chilling to free speech because folks are going to be very concerned and afraid to voice their opinions about businesses…We believe that these sites are the forum where we should be encouraged to write about our experiences with businesses.”

    The Dietz party maintains that its reputation is at stake, and that accusations are false. Mail Online also quotes Deitz’s lawyer as saying, “A bad review is one thing. But, it was a bad review that accused him of theft. And in this residential construction, commercial construction business – that’s a devastating accusation.”

    You can read the entire 27-page legal document here, courtesy of The Washington Post.

    It’s not really about this one case though. It’s about underlying theme, which is also woven throughout a growing number of similar complaints, not limited to Yelp, but to the web in general. We live in an era when anyone with a computer or a mobile phone can easily jump on Facebook, Twitter, or countless other sites, and say whatever is on their mind in any given moment. Not happy with the way your burger was put together at McDonald’s? You may wish to reconsider calling the worker who gave it to you names, as there is always a chance that the corporation that employees them decides it doesn’t like the way you’re representing their business.

    Sometimes name calling is name calling. Sometimes accusations are accusations, but the lines aren’t always that clear, and sarcasm and snark don’t always play as well as we hope they do when in written (or typed) form. Believe me. I’ve had plenty of sarcastic comments in articles throughout the years that simply didn’t land. A scathing metaphor about a person or business risks being taken as fact, and if the person or business on the other end of that scathe, decides to pursue legal options, well, they may just have a case.

    Social media, by the way, is working hard to eliminate online anonymity. In many cases, it won’t be hard for a complaint to put a name to the comments.

    As far as Yelp reviews go, there are plenty of business breaking the “rules” too. There have been enough businesses buying positive reviews on Yelp that Yelp had to start slapping alerts on business profiles who had been “caught red-handed” (Yelp’s own terminology). So, that’s one way businesses had of countering bad reviews that Yelp has essentially taken away (granted, with good reason).

    Some businesses, rather than suing or paying for good reviews, are simply having fun with the bad ones. I prefer this approach. San Diego’s Craft & Commerce is recording their bad Yelp reviews, and playing them for customers while they’re in the bathroom. Seriously. Awesome idea.

    Unfortunately, it’s quite likely, especially in light of the Perez case, more companies will take the legal route, rather than the bathroom humor route. Of course, you do have to get the customers in the door before you can get them in the bathroom.

    On a semi-related note, there has been a lot about Google’s handling of reviews in search results of late, as the company faces potential antitrust lawsuits from the FTC and EU. Yelp has been a big opponent of Google for some time.

    This whole thing seems to be validation that people are finding Yelp reviews just fine, regardless of how Google is treating its own search results. Yelp CEO Jeremy Stoppelman, a regular critic of Google’s business practices, was recently quoted as saying that Google has some “evil” business practices. He thinks Google shouldn’t be putting Google reviews ahead of other reviews (like Yelp’s).

    Yelp, by the way, gets somewhere around 84 million visitors a month, and has 22 million reviews. So many people use it that its reviews are often the basis of lawsuits.

    What do you think? Should the courts be determining what people are saying in online reviews? On social media? Comment here.

  • Dumbest Online Recipe Receives the Most Smartass Comments Ever

    Let’s be honest: online recipes are a minefield. Sure, the user ratings system employed by most online recipe sites help bring the cream to the top and push the crap to the bottom – but every now and then you’re bound to stumble upon a recipe and think “this looks great” only to find that dinner’s ruined and you wasted a lot of time.

    But this recipe, in my opinion, is foolproof.

    Posted back in 2010 on Food.com, one helpful cook decided to let everyone in on her little family secret: Ice Cubes.

    Ingredients; water. Directions: Empty the ice cubes that are left in the trays (if there are any left) into the bin. take the trays over to the sink and fill them with cold water, place the water filled ice trays back in the freezer, replace the ice bin if you had to remove it, and finally shut the door to the freezer.

    Beautiful.

    But it’s some of the comments that are the real gems. I love how many of them take the shape of your traditional recipe site comment. Check out some of the best below:

    This recipe is horrible! Maybe I should have left them in longer than two minutes (the recipe doesn’t say how long to leave them in the freezer so I just kind of guessed) but mine came out all watery. I won’t be making these again.

    I wanted to make your recipe but our well ran dry, so I didn’t have any water to make ice. Since I was having a party, I really had to come up with a clear liquid substitute so I would have ice on hand. A word of warning: when you make vodka cubes your BIL will hit a tree with his new car and your sister will never speak to you again.

    I harvest my own free-range water, so the idea of putting it in a plastic tray and a commercially made electricity-wasting freezer disgusts me. I prefer nature’s method, waiting until the temperature outside drops below freezing.

    I tried this recipe but I must have done something wrong cause they didn’t turnout like the picture! I think I left them in to long or didn’t have the temp. set right cause they came out freezer burned. Next time I think I will try it in the microwave on a cool setting, I am a pro when it comes to making high quality meals that way.

    My son can’t get past step one. Is anybody else having that problem with their teenagers?

    Wow, this recipe has SAVED me! All this time, I thought I had to wait until the lake froze over and chip at it to have ice! Now, my real question is this: CAN SOMEONE PLEASE TELL ME HOW TO MAKE WATER?

    So delicious! I doubled the recipe in a huge baking dish and am freezing the rest in individual servings. So excited to enjoy this dish for the next few weeks!

    Awesome! I am not much of a cook, but I thought what the hey? I’ve got a few days off work, I’ll try it! Plus, I already had the ingredients at the house! My husband was amazed at my newfound culinary skill! This recipe is filed under “Favorites”!

    NEED HIGH ALTITUDE INSTRUCTIONS / ADDITIONAL INSTRUCTIONS PLEASE. I am traveling and will be at a house at around 8,000 ft elevation. Please Advise.

    To be fair to recipe creator CHRISSYG, I don’t think she was all that serious about it.

    “I’m publishing this recipe because I’m sure that there are other families who have members, who don’t know how or have forgotten how to make ice when the ice tray is empty,” she said.

    [via Fark]

  • Unselfish Reasons for Writing Online Reviews [Infographic]

    We all like to share our experiences and writing an online review is one of the most effective and efficient ways to do it. I love online reviews, and judging by the amount available out there, so do a lot of other people.

    What else could be better than learning about a new product or service without having to be the guinea pig yourself? You can get all the insights without any risk to yourself. But what’s in it for the people writing the reviews? Why should they spend their time educating you?

    According to this next infographic from Demandforce.com, many people are motivated by just simply wanting to help others make a good decisions. In fact, 90% of people asked, write reviews just for that reason.

    Other reasons people say they write online reviews include helping a company decide about improvements, rewarding them for a job well done, it’s a great way to get companies to listen, to help companies decide which products to carry in the future, and for others, it’s just plain fun.

    I personally do it to help customers make more informed decisions. Online reviews are a great way to get the general consensus about a product before you ever waste your time going out to investigate further. They can be a real time-saver.

    Take a look at what they came up with:

    (Lead image courtesy of Onpoint.wbur.org)

  • Peer Reviews Trump Advertising [Infographic]

    It started out with larger purchases, I would go online and check to see what other people had to say. If the reviews were mixed, I would give it a try, but if they were overwhelmingly bad, it was off my list. Consumer reviews have become a staple of internet window shopping for almost everyone, especially if you want to be an informed consumer.

    I love online product reviews. Everything from restaurants to shoelaces can reviewed on some website today. In fact, some of the best product advertising stems from great consumer reviews. On the down side for advertisers, consumers are no longer persuaded to buy lackluster products by overly boisterous marketing campaigns.

    On the plus side for us, we are more informed than ever, and we have come to trust many online product reviews, especially if they come from people who we know or are familiar with. These online reviews are the subject of this next infographic by Flowtown.Com.

    Taking information compiled by Nielsen, the survey people, Flowtown shows us what consumer confidence looks like for a variety of mediums including Brand sponsored advertising and marketing campaigns, peer reviews, sponsorships, editorial content, brand websites, peer recommendations, consumer opinions, text ads, and various other media ads.

    The results wont surprise you, we trust recommendations from people we know, consumer opinions, and brand websites the most. That’s right, we do our homework, see what others are using, see what they have to say about it, then make our decision. It’s a fun infographic. If you’re not using online product reviews to do your window shopping, maybe this will convince you. Check it out:

  • RateBeer Announces Best Beers of 2012, Over 3.5 Million Reviews

    Online beer mecca RateBeer has just announced their Best of 2012 Awards, and a Belgian Quadrupel takes the blue ribbon.

    Westvleteren 12, a product of Westvleteren Abdij St. Sixtus, topped the list of 50 best beers. The beer, a RateBeer Gold Medal winner, comes from a brewery that has “the smallest output of the Trappist breweries,” and is less available than a more popular Belgian Quadrupel like Rochefort 10.

    Here’s the top 10, which were determined by over 3.5 million reviews. RateBeer says that they placed more emphasis on user reviews coming from tastings that occurred in the last year.

    1. Westvleteren 12 – Westvleteren Abdij St. Sixtus
    2. Närke Kaggen Stormaktsporter – Närke Kulturbryggeri
    3. Goose Island Rare Bourbon County Stout – Goose Island Beer Company
    4. Founders Kentucky Breakfast Stout – Founders Brewing Company
    5. Rochefort Trappistes 10 – Brasserie Rochefort
    6. Bells Hopslam – Bells Brewery
    7. Russian River Pliny the Younger – Russian River Brewing
    8. Cigar City Pilot Series Passionfruit and Dragonfruit Berliner Weisse – Cigar City Brewing
    9. AleSmith Speedway Stout – AleSmith Brewing Company
    10. Deschutes The Abyss – Deschutes Brewery

    Personal favorite brewery Three Floyd’s had two beers in the top twenty – Dark Lord russian Imperial Stout at number 13 and their ass-kicking Dreadnaught Imperial IPA at number 17. Another personal favorite, Southern Tier’s Choklat came in at number 40.

    Craft beer is on the rise, says RateBeer in a post:

    Craft beer is at a wonderful stage. No longer are we competing for respect as a second class beverage. We’ve won respect. And the craft beer industry is enjoying great success. The number of craft brewers is still increasing markedly. Last year alone RateBeer new brewers increased a whopping 16%. And RateBeer is still growing rapidly, primarily in large US metro areas like San Francisco, Los Angeles, Chicago and New York and abroad in Australia, Sweden, Italy and Brazil.

    RateBeer also awarded prizes in specific categories. Munster, Indiana’s Three Floyds topped the list of best breweries in the World 2012. The best new brewers category was won by anchorage, Alaska’s anchorage Brewing Company.

  • Mobile Devices Playing Larger Role For Holiday Shopping

    Nearly one-third of Americans say while they are at a store looking at product, they tried to find a better deal on their mobile device, according to a new report from GfK Roper, conducted on behalf of SapientNitro.

    Thirty-three percent say while out shopping, they email or texted someone to tell them about an experience at a store, such as finding a deal or gift. Nineteen percent have used their phone to post something to Facebook, MySpace, Twitter or other social networking sites about their holiday shopping experience.

    In addition, half or nearly half used their smart phones to find a store location (52%), research specific products they were thinking of purchasing (48%), browse for products (44%), and/or compare prices (40%). About one in three looked for discounts, deals, coupons, or discount codes (35%) on their mobile phones, or checked product availability at retail stores or websites (34%).

    Chris-Davey-.jpg “Portability is a game-changer in transforming the way that people shop,” said Chris Davey, worldwide head of commerce at SapientNitro.

    “Technology is causing some of the biggest shifts in human behavior that we’ve seen in years, and consumers are more informed and empowered than ever. This has a major impact not only on the way that consumers shop but also on the way that retailers need to market to consumers this holiday season.”

    Among Americans who have started their holiday shopping:

    *About half (53%) say they purchased a product in a physical retail store after researching the product online.

    *Nearly half (44%) purchased a product online after shopping for a similar item in a physical store.

    *Seven in ten (69%) say online customer ratings or reviews (such as on Amazon or Yelp) very or somewhat valuable.

    *About half find e-mail promotions (50%) or online videos of product features/reviews (53%) valuable
     

  • Social Media Users Aim To Influence Others

    Nearly two-thirds (64%) of online Americans use social media, and the majority (84%) of social media users reveal information about themselves via social platforms, according to a new poll from Harris Interactive.

    Not only are many Americans sharing updates about their life (43%), what they are currently doing (36%), and places they are going (31%), many are also revealing brand, product and company preference. Specifically, about one-quarter are expressing their dissatisfaction with companies, brand or products (26%), talking about companies, brands or products they like (23%) or giving product reviews and recommendations (19%). In fact, 34 percent indicate they have used social media as an outlet to complain about a company, brand or product.

    More than one-third (38%) of Americans say they aim to influence others when expressing their preferences online and almost half (46%) feel the can be honest on the Internet.
    While online Americans aged 55 and older are less likely to use social media compared to younger Americans (43% of those 55 and older, versus 78% of 18-34 year olds, 71% of 35-44 year olds and 59% of 45-54 year olds), all age groups who use social media are equally likely to share their dissatisfaction with a company, brand or product via social media (25% of those 18-34 years old, 26% of those 35-44 years old, 25% of those 45-54 years old and 29% of those aged 55 and up).
     

    Sharing-Social-Media

    What people say online about companies, brands and products matters, according to Harris.  In fact, nearly half of Americans who use social media say reviews about a particular company, brand or product from friends or people they follow on social networking websites influence them either a great deal or a fair amount (45%) – the same number as Americans who say reviews in newspaper or magazine articles influence them (46%).

    Even though people may not reveal everything, 83 percent say they know that by participating in social media, they are giving up some of their privacy.

    Despite some of the differences between younger and older Americans in their use of social media, a majority of Americans (78%) agree that what they reveal about themselves on social networking sites is just a snapshot, not a complete portrait, of who they are
     

  • Yelp To Display Filtered Reviews

    Yelp To Display Filtered Reviews

    Local business review site Yelp said today it is taking steps to increase transparency about how user reviews are presented to consumers.

    The move comes amid at least three lawsuits alleging that Yelp manipulates reviews based on whether a company advertises with the site.

    Beginning today, anyone who wants to see which reviews have been identified by Yelp’s automated review filter will be able to do so via a link to a separate page containing that content. The company is also dropping its "Favorite Review" feature that has been part of its advertising for the past four years.

    Jeremy-Stoppleman-Yelp "Today we’ve taken steps to make it even more clear that Yelp treats review content equally for advertisers and non-advertisers alike and that there is no relationship between advertising and a business’ reviews on Yelp," said Jeremy Stoppelman, Yelp’s chief executive officer and co-founder. 

    "While Yelp is helping millions of consumers find millions of great local businesses each month — and consumer traffic and business advertisers continue to reach new highs — myths have persisted about how review content is displayed on Yelp."

    Yelp said the removal of its "Favorite Review" feature will make it more clear that reviews on the site are separate from advertising. Instead advertisers will be able to post a video to their Yelp pages.

    The company said it will continue to work on ways to combat fake or malicious reviews and will continue to develop the review filter to keep ahead of spammers.