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Tag: Yelp

  • 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

  • Yelp: We’d Love To Work With More Law Enforcement Officials To Crack Down On Fake Reviews

    This 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.”

    Today, Yelp is gloating about its win in a blog post, and telling those writing fake reviews that there’s more where that came from.

    “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,” writes 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 adds. “We would love to work with law enforcement officials in other states to crack down on this unethical practice.”

    A study about Yelp reviews has been getting a lot of attention today after finding that a fifth of Yelp restaurant reviews are fake. The story hit the front page of reddit, attracting thousands of comments including some interesting ones from people claiming to be ex-employees of the company.

    Meanwhile, Yelp doesn’t seem to mind fictional characters posting reviews on pages for fictional restaurants on the site.

    Image: 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.

  • Will Yelp’s Lawsuits Curb Phony Reviews?

    As phonebooks become a thing of the past, local and small businesses now rely more than ever on the internet to get the word out about their services. However, the social nature of today’s web makes it hard work for business owners to control how their business is perceived. A bad review can stick around forever, and the anonymous nature of the net can make it impossible to investigate claims or offer recompense.

    On Yelp in particular, bad or vindictive reviews can often hurt the reputation of a small business. Millions of people each month rely on the site to find local businesses, and low ratings can mean the difference between sales and bankruptcy. Add to this the fact that Yelp’s business model runs on selling advertising to the very business’ that inhabit its website and the situation becomes one that can cause resentment from business owners who are trying hard to promote their services on a limited budget.

    Have a Yelp horror story? Let us know about it in the comments.

    Within this climate, it isn’t surprising that Yelp has been sued multiple times by people who all but claim (though some explicitly claim) that Yelp is extorting small businesses. These claims include the hiding of positive reviews and the placing of competitor ads on business review pages.

    For its part, Yelp has strenuously denied being a racket and has generally come out on top in lawsuits. Through multiple blog posts and reports, Yelp has tried to explain how it attempts to filter out reviews that it sees as fake. These would include reviews from business owners themselves, as well as reviews from companies that sell false Yelp reviews.

    Now, after being on the defensive in lawsuits and implementing features such as consumer alerts on its website, Yelp appears to be going on the offensive. Yelp is now suing sites that sell false reviews for its website. As recently as June of this year Yelp filed a lawsuit against the provocatively-named website BuyYelpReview.com (it’s gone now). This week, a new Bloomberg report points out that Yelp may even now be targeting individual business owners who file false reviews.

    The report centers on a San Diego lawyer named Julian McMillian who sued Yelp in small claims court over an ad deal and actually won. He then began soliciting other businesses who had grievances with Yelp. Though his victory was overturned on appeal, Yelp seems to have used the case as an opportunity to dig into McMillian’s Yelp comments. Yelp is now suing the man for more than $25,000 for allegedly planting fake reviews on his business page.

    Being sued by Yelp is a notion that could easily strike fear into the hearts of small business owners – and that’s likely the point. By making an example of an unscrupulous business owner, Yelp could be hoping to deter others from creating their own astroturf reviews or turning to fake Yelp review sellers. It’s a tactic that the MPAA embraced years ago, suing individuals (including clueless parents) who had pirated copyrighted content using Bittorrent. And as with piracy, the tactic would be unlikely to work for Yelp.

    On a basic level, suing small business owners directly could easily increase resentment from those that struggle with poor reviews. For those who already believe that Yelp gives review-filter favors to business that advertise with them, this could simply be seen as Yelp shutting down their competition.

    On a technical level, Yelp uses an algorithm to determine what reviews should be hidden on a business Yelp page. As Google knows, it can be hard to stay a step ahead of scammers trying to game an algorithm. It’s a constant process that takes expertise and creativity to manage, and even then the legions of spammers working against an algorithm always seem to find a way to game it.

    It’s a problem that will almost certainly never be fully solved. There simply isn’t enough manpower to check every Yelp review thoroughly. Though Yelp likely accounts for some amount of false reviews in its star ratings system, individual reviews would still require a human touch to completely verify. For better or worse, Yelp and small business owners seem to be bound to each other out of necessity – with false reviews making it difficult for both sides to trust the other.

    Is there some way for Yelp to filter fake reviews that doesn’t risk hurting small businesses? Let us know your ideas in the comments.

  • 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]

  • 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.

  • Yelp Reports Q2 Earnings, Revenue Up 69%

    Yelp Reports Q2 Earnings, Revenue Up 69%

    Yelp released its earnings report for the second quarter on Wednesday with revenue up 69% year-over-year at $55 million, beating Wall Street expectations.

    The company also announced that cumulative reviews were up 41% year-over-year at over 42.5 million, average monthly unique visitors were up 38% to about 108 million, and active local business accounts grew 62% to about 51,400.

    “We had a great second quarter with strong execution in all areas of our business as the Yelp brand becomes increasingly prevalent around the world,” said CEO Jeremy Stoppelman. “In the second quarter, we launched new features on the mobile app and created a Call to Action feature, yet another way for us to close the loop between consumers and local businesses. As we look to the rest of the year, we will continue to focus on driving innovation in mobile, integrating Qype, and closing the loop with local businesses.”

    You can browse our recent Yelp coverage to see what the company has been up to with regards to “closing the loop”. This includes acquiring SeatMe and adding transactions.

    Here’s the release in its entirety:

    Net Revenue Increases 69% Over Second Quarter 2012

    SAN FRANCISCO, July 31, 2013 /PRNewswire/ — Yelp Inc. (NYSE: YELP), the company that connects consumers with great local businesses, today announced financial results for the second quarter ended June 30, 2013.

    • Net revenue was $55.0 million in the second quarter of 2013, reflecting 69% growth in net revenue from the second quarter of 2012
    • Cumulative reviews grew 41% year over year to more than 42.5 million
    • Average monthly unique visitors grew 38% year over year to approximately 108 million*
    • Active local business accounts grew 62% year over year to approximately 51,400

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

    Net loss in the second quarter of 2013 was ($878,000) or $(0.01) per share, compared to a net loss of $(2.0) million, or $(0.03)per share, in the second quarter of 2012. Adjusted EBITDA for the second quarter of 2013 was approximately $7.8 million, compared to $1.6 million for the second quarter of 2012.

    “We had a great second quarter with strong execution in all areas of our business as the Yelp brand becomes increasingly prevalent around the world,” said Jeremy Stoppelman, Yelp’s chief executive officer.  “In the second quarter, we launched new features on the mobile app and created a Call to Action feature, yet another way for us to close the loop between consumers and local businesses.  As we look to the rest of the year, we will continue to focus on driving innovation in mobile, integrating Qype, and closing the loop with local businesses.”

    “We are very pleased with our performance this quarter, with revenue growth accelerating to 69% year over year,” added Rob Krolik, Yelp’s chief financial officer. “This was driven by record results across all our key financial and operating metrics. We also saw considerable leverage in our business model with nearly a 400% increase in adjusted EBITDA as compared to last year.”

    Net revenue for the six months ended June 30, 2013 was $101.2 million, an increase of 68% compared to $60.0 million in the same period last year.  Net loss for the six months ended June 30, 2013 was $(5.7) million, or $(0.09) per share, compared to a net loss of $(11.8) million, or $(0.26) per share, in the comparable period in 2012.  Adjusted EBITDA for the first six months of this year was approximately $11.0 million compared to $630,000 for the first six months last year.

    Business Highlights

    • Yelp mobile:  Yelp mobile continues to grow rapidly.  In the second quarter, approximately 40% of local ads were shown on mobile devices, and approximately 59% of searches were on mobile, including mobile web and app.  Additionally, Yelp launched a number of mobile upgrades including the Nearby feature which suggests businesses and activities based on location, behavior, friends’ activities, and other data.
    • Closing the loop with businesses:  A recent study by Nielsen found when consumers find a local business on Yelp, 89% make a purchase within a week of visiting Yelp.  To help businesses close the loop with these consumers, Yelp launched the Call to Action feature that allows advertisers to promote a desired transaction directly on their Yelp business listing.  In July, we launched Yelp Platform which enables consumers to transact with businesses directly on Yelp.
    • New markets: Yelp integrated Qype content and traffic from Spain and Italy and launched six new Yelp Markets, including two domestically and four internationally.
    • SeatMe:  In July, Yelp acquired SeatMe, a web and iPad-app based reservation solution for the restaurant and nightlife categories.  With SeatMe’s solution, more local restaurants and bars can provide an easy way for customers to book online reservations, enhancing the consumer experience for those who discover a great local business on Yelp.

    Business Outlook

    As of today, Yelp is initiating guidance for its third quarter of 2013 and raising its full year 2013 revenue and adjusted EBITDA guidance.

    • For the third quarter of 2013, net revenue is expected to be in the range of $58 million to $59 million.  Adjusted EBITDA is expected to be in the range of $7.5 to $8.0 million.
    • For the full year of 2013, net revenue is expected to be in the range of $222 million to $224 million, representing growth of approximately 62% compared to the full year of 2012.  Adjusted EBITDA is expected to be in the range of $27 million to $28 million.

    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) 447-0521, or outside the U.S. 1 (847) 413-3238, with Passcode 35182252, 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 July 31, 2013 and 11:59 p.m. PT August 14, 2013 by calling 1 (888) 843-7419 or 1 (630) 652-3042, with Passcode 35182252#.  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 and the Czech Republic. Yelp had a monthly average of approximately 108 million unique visitors in the second quarter 2013*. By the end of the same quarter, Yelpers had written more than 42.5 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 10.4 million unique mobile devices on a monthly average basis during the second quarter 2013.

    * 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 adjusted EBITDA guidance for the third quarter and full year 2013 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 third quarter 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 third quarter and full year 2013, the future growth in Company revenue and continued investing by the Company in its future growth, the Company’s ability to build Yelp communities internationally and expand its markets and presence in existing markets, plans regarding product innovation around Yelp Platform, mobile and new features, and continued integration of Qype into Yelp. 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 Quarterly Report on Form 10-Q for the three months ended June 30, 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)
    June 30, December 31,
    2013 2012
    Assets
    Current assets:
    Cash and cash equivalents $   96,795 $          95,124
    Accounts receivable, net 14,769 11,738
    Prepaid expenses and other current assets 6,441 4,912
    Total current assets 118,005 111,774
    Property, equipment and software, net 19,779 14,799
    Goodwill 46,678 48,605
    Intangibles, net 4,716 5,936
    Restricted cash 8,102 6,400
    Other assets 262 182
    Total assets $ 197,542 $        187,696
    Liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit)
    Current liabilities:
    Accounts payable $     1,929 $            2,284
    Accrued liabilities 17,689 16,367
    Deferred revenue 2,739 2,856
    Total current liabilities 22,357 21,507
    Long-term liabilities 688 527
    Total liabilities 23,045 22,034
    Commitments and contingencies
    Stockholders’ equity (deficit)
    Common stock – –
    Additional paid-in capital 240,752 225,245
    Accumulated other comprehensive  income (190) 805
    Accumulated deficit (66,065) (60,388)
    Total stockholders’ equity (deficit) 174,497 165,662
    Total liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit) $  197,542 $         187,696

     

     

    Yelp Inc.
    Condensed Consolidated Statements of Operations
    (In thousands, except per share amounts)
    (Unaudited)
    Three Months Ended Six Months Ended
    June 30, June 30,
    2013 2012 2013 2012
    Net revenue $ 55,023 $ 32,653 $ 101,156 $  60,038
    Cost and expenses
    Cost of revenue (1) 4,018 2,298 7,358 4,424
    Sales and marketing (1) 30,803 20,333 58,997 39,103
    Product development (1) 7,997 4,336 15,233 8,476
    General and administrative (1) 10,148 5,963 18,912 16,692
    Depreciation and amortization 2,637 1,661 5,115 3,022
    Restructuring and integration – – 675 –
    Total cost and expenses 55,603 34,591 106,290 71,717
    Loss from operations (580) (1,938) (5,134) (11,679)
    Other income (expense), net (66) 22 (267) (8)
    Loss before provision for income taxes (646) (1,916) (5,401) (11,687)
    Provision for income taxes (232) (66) (276) (97)
    Net loss (878) (1,982) (5,677) (11,784)
    Accretion of redeemable convertible preferred stock – – – (31)
    Net loss attributable to common stockholders $    (878) $ (1,982) $   (5,677) $ (11,815)
    Net loss per share attributable to common stockholders:
    Basic $   (0.01) $   (0.03) $     (0.09) $     (0.26)
    Diluted $   (0.01) $   (0.03) $     (0.09) $     (0.26)
    Weighted-average shares used to compute net loss per share attributable to common stockholders:
    Basic 64,576 60,887 64,163 46,075
    Diluted 64,576 60,887 64,163 46,075
    (1) Includes stock-based compensation expense as follows:
    Three Months Ended Six Months Ended
    June 30, June 30,
    2013 2012 2013 2012
    Cost of revenue $      105 $        35 $        177 $         58
    Sales and marketing 2,282 895 4,270 2,019
    Research and development 1,040 300 1,856 543
    General and administrative 2,286 628 4,015 6,667
    Restructuring and integration – – 555 –
    Total stock-based compensation $   5,713 $   1,858 $   10,873 $    9,287

     

     

    Yelp Inc.
    Condensed Consolidated Statements of Cash Flows
    (In thousands)
    (Unaudited)
    Six Months Ended
    June 30,
    2013 2012
    Operating activities
    Net loss $ (5,677) $ (11,784)
     Adjustments to reconcile net loss to net
     cash provided by (used in) operating activities:
    Depreciation and amortization 5,115 3,022
    Provision for doubtful accounts 1,301 108
    Stock-based compensation 10,873 9,287
    Loss on disposal of assets and web-site development costs 94 37
    Changes in operating assets and liabilities:
    Accounts receivable (4,404) (1,973)
    Prepaid expenses and other assets (2,318) (918)
    Accounts payable and accrued expenses 215 577
    Deferred revenue (85) (796)
    Net cash provided by (used in) operating activities 5,114 (2,440)
    Investing activities
    Purchases of property, equipment and software (4,966) (1,927)
    Capitalized website and software development costs (2,139) (1,590)
    Change in restricted cash (1,768) (6,008)
    Goodwill measurement period adjustment 1,153 –
    Cash used in investing activities (7,720) (9,525)
    Financing activities
    Proceeds from initial public offering, net of offering costs – 112,257
    Proceeds from issuance of common stock 4,604 762
    Repurchase of common stock (193) –
    Net cash provided by financing activities 4,411 113,019
    Effect of exchange rate changes on cash (134) (177)
    Net increase in cash and cash equivalents 1,671 100,877
    Cash and cash equivalents at beginning of period 95,124 21,736
    Cash and cash equivalents at end of period $  96,795 $ 122,613

     

     

    Yelp Inc.
    Reconciliation of Net Loss to Adjusted EBITDA
    (In thousands)
    (Unaudited)
    Three Months Ended Six Months Ended
    June 30, June 30,
    2013 2012 2013 2012
    Net loss $  (878) $ (1,982) $ (5,677) $ (11,784)
    Provision for income taxes 232 66 276 97
    Other income (expense), net 66 (22) 267 8
    Depreciation and amortization 2,637 1,661 5,115 3,022
    Stock-based compensation 5,713 1,858 10,318 9,287
    Restructuring and integration costs – – 675 –
    Adjusted EBITDA $ 7,770 $  1,581 $ 10,974 $       630

     

    SOURCE Yelp Inc.

    Image: Stoppelman at Le Web

  • Yelp Acquires SeatMe: Better Online Reservations and More ‘Closing the Loop’

    Yelp has announced that they have acquired online reservation startup and rising OpenTable competitior SeatMe in order to “further enhance the consumer experience by extending the convenience of easy, online reservations directly through Yelp to thousands of currently unserved businesses.”

    The total purchase price is $12.7 million ($2.2 in cash and the rest in 263,000 shares).

    SeatMe’s 15 employees will join the Yelp team in Q4 of 2013.

    “I am excited to welcome SeatMe’s employees and customers to Yelp,” said Jeremy Stoppelman, Yelp co-founder and CEO. “SeatMe has developed a truly compelling product for restaurants and bars of any size. With approximately one million U.S. businesses listed on Yelp in the restaurant and nightlife categories, we believe SeatMe will add online reservation capabilities to a broader market while complementing our existing partnerships. Additionally, SeatMe provides us with yet another way to close the loop between local businesses and consumers.”

    In terms of closing that loop, Yelp just unveiled their new initiative that focuses more on transactions – and keeping those transactions on Yelp. The newly launched Yelp Platform is starting with food delivery, offering users the ability to order, pay for, or schedule delivery at a few participating restaurants.

    Yelp says it’s just the beginning of bringing more transactions to the site:

    “In the coming months, we’ll add categories like spas, yoga studios, salons and dentist appointments starting with Booker, Intuit’s Demandforce and MindBody. Consumers can expect us to add more categories in the future,” says Yelp.

    And more to that “closing the loop” gameplan, Yelp just launched its new “Call to Action” feature which lets businesses promote transaction types of their choosing directly on their Yelp business listing. It’s basically a way for businesses to direct users to the exact, offsite place where they can buy their services.

    “We’re excited to join the Yelp team and help connect consumers with great local businesses,” said Alexander Kvamme, SeatMe’s co-founder and chief executive officer. “We are committed to providing an innovative, easy-to-use and affordable restaurant management system that can be accessed anytime, anywhere. We target a large, underserved market of restaurant and nightlife establishments, and we’re excited about the opportunity to significantly extend our market reach.”

  • Yelp’s New Focus on ‘Transactions’ Starts with Food Delivery

    Yelp, one of the leading places online to find both quick information and reviews for a variety of business types, wants you to be able to do more without leaving its cozy confines.

    To that end the company has just unveiled Yelp Platform, which they say will make transactions easy – and performed directly through Yelp.

    The first step in Yelp Platform involves food delivery. Beginning with a small pilot group of participating restaurants, Yelp will now allow users to order, pay for, and schedule delivery or pickup right from the site. No need to leave Yelp.

    But the food is just the beginning. According to Yelp, they want to be able to provide “transactions” for a bunch of different types of services:

    We’ll be rolling out Yelp Platform category by category, beginning today with food delivery and pickup. Starting now, people can order food directly from a select number of restaurants supported by delivery.com and Eat24, like NYC’s Harry’s Italian Pizza Bar and Layaly Mediterranean Grill in SF. Eventually, consumers will be able to order whatever meal they’re craving for delivery or pickup at thousands of local restaurants across the US, directly from those businesses’ Yelp listings.

    In the coming months, we’ll add categories like spas, yoga studios, salons and dentist appointments starting with Booker, Intuit’s Demandforce and MindBody. Consumers can expect us to add more categories in the future.

    So not only will you be able to order Chinese takeout straight from Yelp, but you’ll also be able to schedule your dentist appointment to clean those cashew chicken-glazed teeth.

    Yelp says that the new transactions (for food) should be ready on the desktop & mobile site plus on Yelp for iOS (Android coming soon).

    Unlike services like Amazon Prime or the new Google Shopping Express pilot program, Yelp isn’t actually delivering anything there. What they are doing, however, is setting up a transaction service that makes it easier for users to buy, schedule, and book directly from yelp.com and from mobile.

  • 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 Adds Feature To Let Customers Pay Businesses

    Yelp Adds Feature To Let Customers Pay Businesses

    Yelp announced the launch of a new feature for business owners today, which lets them encourage actual transactions from customers right from Yelp. Yelp says it will help business owners “close the loop” between customers discovering them on Yelp and making a purchase/taking an action.

    It’s actually 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 tells 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.”

    Earlier this month, Yelp CEO Jeremy Stoppelman spoke at the Le Web conference in London, and hinted at forthcoming e-commerce efforts, which would enable customers to make purchases from Yelp itself. It’s unclear if he was only talking about this, or if we will see additional features in the future. Either way, it’s a start.

    Call to action

    “According to a recent BCG study, advertisers on Yelp report seeing an average of $23,000 in annual revenue from the site,” Yelp says 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.

  • Yelp Now Uses More Data For ‘Nearby’ Suggestions

    Yelp has made some changes to its Nearby feature to make it more useful and show suggestions for places that are near you. Suggestions are based not only on location, but also on previous Yelp check-ins, reviews, Yelp friends, time of day, weather, etc.

    Interestingly, this comes just after Yelp CEO Jeremy Stoppelman indicated that check-in data isn’t incredibly helpful.

    It’s in there somewhere.

    “At Yelp, we have an entire community of reviewers that we rely on to suggest places you might not know about, as well as places that you and your friends love,” said Yelp search product manager Travis B. in a blog post. “Maybe you’ll discover something new, maybe you’ll understand what the neighborhood has to offer, or maybe you’ll be reminded of an old favorite.”

    Yelp Nearby

    “Imagine it’s noon and you’re hungry for lunch, but don’t want the same old ham n’ cheese from the corner deli,” he adds. “A quick visit to the Nearby page might bring up a highly rated spot around the corner that is known for their banh mi and has been reviewed by one of your Yelp friends. You might also see a place down the block where a bunch of Yelpers are checked in right now…your FOMO kicks in and you head over to join the party.”

    According to Yelp, 45% of its searches come from mobile apps. The new feature is currently available on iPhone, and will come to Android within the next few months.

  • Here’s What Yelp Said About Future E-Commerce Products

    Here’s What Yelp Said About Future E-Commerce Products

    This week, Yelp CEO Jeremy Stoppelman spoke at the LeWeb conference in London. SocialTimes initially reported on some comments he made, indicating that Yelp is considering going into e-commerce, which we covered here.

    Le Web has since released the entire interview on YouTube:

    After discussing business growth, fake reviews, and saying that Yelp is “disrupting the Yellow Pages,” Stoppelman got into the e-commerce stuff.

    Yelp goes “far beyond restaurants,” he noted. “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.”

    Sounds like this is really on the horizon, but Stoppelman refused to get into any specific product announcements, something he noted that he has to be careful about now that Yelp is a public company.

    He did say that Yelp has some upcoming products in the pipeline, but did not make it clear whether any of them are related to e-commerce. He did say that mobile is still a focus, and that international expansion is “top of mind.”

    If and when Yelp does decide to get more into e-commerce, it will be interesting to see how businesses react, particularly in light of all the criticism businesses have directed at the company regarding reviews.

  • 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.

  • Yelp Is Reportedly Looking To Get Into E-Commerce

    Yelp Is Reportedly Looking To Get Into E-Commerce

    According to one report, Yelp is considering getting into ecommerce with a potential on-site shopping feature.

    Yelp CEO Jeremy Stoppelman spoke at the LeWeb conference in London. According to SocialTimes, he said the company is considering supporting ecommerce.

    The report quotes him as saying, “We have a toe in the water, but I see a lot of potential there. We have all these people who are essentially shopping for something online that they’ll buy offline but they’re not closing the transaction,” and adds that Yelp is “considering supporting purchases” to its OpenTable integration, and that the company expects to launch new products within weeks.

    While this online shopping stuff did not come up, The Guardian has an interesting interview with Stoppelman from the conference in which he discusses mobile growth, global expansion and recommendations. In that, he also talked a bit about the infamous review filter that many have criticized. Yelp has been accused of extortion by businesses numerous times, charges that the company staunchly rejects. Here’s a snippet from the interview discussing the system:

    “There’s the problem of how you protect the businesses, making sure the content is as useful and trustworthy as possible. Although also how you make sure businesses don’t inflate their own ratings,” he says.

    That means heavy investment in Yelp’s review filter, which combs through the site’s data to spot suspicious patterns and pull out reviews that may be fake – more than 20% for some businesses according to Stoppelman – and remove them from the main listings, although they are still accessible through a link.

    As millions more people use a service like Yelp, does it become harder to game the system? Actually, Stoppelman says that bigger scale means bigger efforts to undermine it.

    “The more prominent we are, the more efforts expand to beat the system,” he says. “We’re investing more and more: we have this arm’s race going on. But we think we’re far enough ahead with our efforts

    Earlier this year, Yelp topped 100 million unique monthly visitors for the first time. Last month, the company revealed that its average uniques grew 43% year-over-year to 102 million, while revenue was up 68% year-over-year.

  • Yelp: We Don’t Extort Small Businesses

    Yelp has been accused of extorting businesses by burying positive reviews for businesses who won’t advertise with them, and surfacing those reviews if they do advertise. The company staunchly denies that this is happening, but there have been multiple reports and lawsuits alleging that this has been going on.

    Do you think Yelp is extorting businesses or are businesses allegations simply false? Have you had negative experiences with Yelp? Let us know in the comments.

    This is not a new story. Businesses have been accusing Yelp of extortion for quite some time. Back in September, for example, a restaurant in Connecticut told a local news station that Yelp had been taking down their positive reviews because they refused to buy advertising. Here’s that report:

    WFSB Channel 3

    Fast forward to this week, and similar stories are appearing. Here’s a report from Brook Silva-Braga at The Washington Post:

    “A lot of business owners say what Yelp is really doing is extorting them for advertising money,” says Silva-Braga.

    The piece discusses a business who lost all of its customers, and attributed this to a one-star rating and bad reviews on Yelp. Interestingly, it claims deals services like Groupon and LivingSocial will no longer work with the business either, due to the poor rating.

    “I signed a contract with Groupon about a month ago to run a deal, and they’re not running a deal because of the reviews,” the business owner says in the interview.

    Silva-Braga says in the piece that many business owners say Yelp wields its power unfairly. He goes on to point to the paid Yelp ads for competitors that appear above actual reviews on listings for specific businesses. He notes that when he clicks on a listing for one of the paid advertisers, there are no competitor ads.

    “But that’s just a small example – one Yelp doesn’t debate,” he says. “It’s something else much harder to prove that gets business owners really upset with Yelp.”

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

    Yelp strongly denies that any of this is going on, which the report also mentions. It even includes footage of Yelp’s VP Communications & Public Affairs, Vince Sollitto, discussing how the filtering algorithm works. The review filter, he says, does not take into account advertiser status. The report then goes on, however to showcase a business owner claiming that a Yelp salesperson said they would unfilter filtered reviews if they advertised. The business reportedly did start some “small scale” advertising, and “magically,” five or six of the filtered reviews became unfiltered. Finally, the report notes that all “evidence” of the allegations at hand are circumstantial.

    Sollitto took to the Yelp blog to discuss Yelp’s side of the story further, calling out the Washington Post report and an LA Times article as stories that rehash “sensational” allegations, which he says are not, and have never been true.

    Sollitto points to research from Harvard Business School and Yale professors finding no connection between advertising and Yelp’s automated filtering, though the claim in the Washington Post piece indicates there was human intervention in the automated process. He then notes that courts have “rejected the conspiracy”.

    “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,” he writes.

    “A simple Google search debunks the conspiracy,” he adds. “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.”

    I’m not sure what that says about the possibility that reviews could be hidden on Yelp in the “filtered” section rather than actually being deleted.

    Sollitto goes on to note that you can also find many non-advertisers with good ratings.

    “So why does this misbelief exist?” he asks. “Ironically, it stems from Yelp’s efforts to protect consumers from those who are constantly trying to game the system. Yelp uses automated software to showcase the most helpful and reliable reviews from among the millions submitted. Those that don’t make the grade — about 20 percent — are posted to a separate ‘Filtered Review’ page. So, in trying to prevent unethical wrongdoing on Yelp, Yelp gets accused of the same.”

    Earlier this month, Yelp revealed that its average monthly unique visitors grew 43% year over year to 102 million, and revenue was up 68% year-over-year. Cumulative reviews grew 42% year over year to more than 39 million.

    Do you think Yelp is wronging businesses? Let us know in the comments.