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Yelp Extortion: True or False?



yelpWe’ve heard it all before: a shady review site features negative reviews of your company, but (glory be!) they’ll remove them—for a price. It’s more of the same old song this week, but in a different key review site: Yelp. But they’re not taking the allegations lying down.

In a lengthy article generated from a series of interviews with local business owners (all with 3+ star reviews on Yelp), the (Emeryville, CA) East Bay Express levels some serious allegations against the local review site—offering to push negative reviews down on the page for a few hundred dollars, offering to remove negative reviews completely, moving up negative reviews for businesses that declined to use their local advertising.

The Express also outlines a Yelp sales pitch forwarded to them from a local business owner, though I think they generated the list to make the advertising package sound . . . well, bad. Local advertising on the site allows business owners to:

  • highlight a favorite review to appear at the top of the page about their business
  • show up first in search results for similar businesses in their region (for example “coffee” near “Alameda, CA”).
  • display ads local competitors’ profiles, while competitors’ ads do not appear on their page
  • post photo slideshows
  • add a “personal message” about their business
  • update info on special offers and events
  • find out how many users visit their web site*
  • update their page*
  • contact Yelpers who’ve reviewed their business*
  • access an account manager who will help “maximize” their experience with Yelp.

The starred items are also available with a free business owners’ account. I find the third feature listed especially confusing—if competitors aren’t Yelp advertisers, why would their ads show up on your page in the first place? And if they are, didn’t they get the same promise, too? (Methinks there’s a couple crossed wires in there.)

Some of these things look bad on their face, but probably aren’t as insidious as they sound. So they get their ads running first in search results—you mean like the sponsored results Google shows above its organic results?

In fact, statements from Yelp’s spokeswoman, Stephanie Ichinose, certainly bring to mind a certain other secret-algorithm-based ranking system:

But aside from a single “sponsored review” at the top of the page, the order of all other reviews is based on a secret Yelp algorithm, spokeswoman Ichinose said. The order is mostly due to recency and reader votes for certain reviews as “useful,” “funny,” or “cool.” But Ichinose said there are other factors, including how frequently reviewers contribute to the web site and “what kind” of review writer they are. “It’s a number of different things we don’t disclose,” she said. “To be explicitly clear, the algorithm is an automated system. There’s no human manipulation of that. … If we were to start doing that, that would erode the trust we have with consumers.”

The EBE article also highlights a weakness of any system that allows for anonymous reviews—gaming. Angry customers (or in one case, refused customers) and rivals can leave scathing reviews that taint a company’s profile and image on the site—and may be costing them customers.

Yelp, naturally, disputes these allegations as reported in a Wall Street Journal article today.

After refuting the accusations directly by showing how clearly marked an advertisers’ favorite review is (and how the neutral and negative reviews still appeared on their page), the Yelp Official Blog questions the credibility of the story’s sources—five anonymous business owners and three named owners, including one business who CEO Jeremy Stoppelman says was trying to game Yelp’s system in their favor.

The Yelp post does, however, point out that the article’s conclusion stops far short of condemning the company:

Interviews with more than a dozen local business owners suggest that Yelp sales reps may be wording their sales pitches more carefully these days. Owners who were approached by Yelp in recent months said they were told they could choose one positive review that would appear at the top of their page, which would clearly be denoted as a “sponsored review.”

And plenty of Yelp advertisers still have negative reviews on their pages. “You pretty much have to fight tooth or nail to get a bad review moved or removed,” said one East Bay restaurant advertiser, who wished to remain anonymous. Peter Snyderman, the owner of Elite Cafe, said his sales rep never mentioned moving negative reviews.

In the final line, the reporter asks a 28-year-old “avid reviewer” if he’d still use Yelp even if reviews were being gamed. His response: “Yeah, I think I would.”

What do you think? Would you use Yelp even if some of the reviews have been manipulated? And how is Yelp doing at defending its business and its reputation?

  • http://Davidbeking.com David King

    Everything has a price! look at politicians! lol… money makes the world go around… so why wouldn’t it make the internet go around!

    David King’s last blog post..3 reasons why you need to be banking online?

  • http://localadvertisingjournal.com Nick Stamoulis

    It sounds to me like Yelp is trying to monetize their website a little too hard…I don’t recall any type of local advertising on Yelp…so all of a sudden they are much less a 2.0 review site and much like a 1.0 Citysearch site with an extortion aspect…anyway, if they started this type of thing, I would most certainly not use the site at all.

    Nick Stamoulis’s last blog post..Now is the Time to Find your Local Business

  • http://technewsline.net Jack Clarke

    Just stumbled on this site and must say it is quite informative. This certainly does seem like a back handed form of extortion and if they are going down this road I certainly won’t use them either.

    Jack Clarke’s last blog post..Marketing to mobile devices

  • http://www.indiesurf.com Darren Tan

    Internet politics? Welcome to web 3.0. :-) just kidding…

    The fact is we can’t really control this issue, there will always be another wave that comes along..

    Darren Tan’s last blog post..Music Review: ?The Colourful Life? by Cajun Dance Party

  • http://www.marketingpilgrim.com Andy Beal

    I’ll still use Yelp–and Tripadvisor etc–because they still provide an overall impression of whether a business is good or bad. You just need to understand that all of these sites are manipulated to some degree–positively or negatively–so don’t ever make a decision based on just one single review.

  • Sandra Bost

    i gave yelp content and then i find out that the reviews don’t show? what a waste of time…shoudl have down the urbanspoon thing…

    but, i hear there’s a new competitor paying for reviews too…http://answers.yahoo.com/question/index?qid=20090225162712AAoCqYF

  • Charlie

    I am a small business owner and I can attest that Yelp engages in extortion practices. Since turning down their marketing package / protection money, I have had nothing but negative reviews. And 4 of my best (5-star) reviews have vanished. Coincidence? Right..

  • http://www.pkartandfloraldesign Pam

    I also agree with Charlie. The same thing happen to me. The 3 reviews of my 5 star had been vanised, one from BAC event planner, one from Paloma Hotel, and one from Rose E. I have the print out to proof.
    On the end of January yelp sell person call me her name is Natasha about their pakage advertising but I told her that I don’t have the budget for it. The next day a negative review come up from the person that I had meet on the begining of November. Coincidence? but anyway I don’t know. Then I contact yelp to see if I can respone to her publicly on my page. Because the person who wrote the review had lie and left out a lot of information for the public. Natasha, yelp sale person was tolding me about her high school experience that people said bad thing about her. I thought that was totally different experience this is my life and my business that I had been established with sweat and tear. But anyway I just stop talking to yelp sale person.
    Then I give yelp a 1 star negative review and explain to them why I give them one star but it had been remove after a week. I had found that yelp is a bad business practic. I will never spend any money with yelp on the advertising. I just can’t see myself supporting bad business practic. If every business practic the same way that yelp do we won’t have America the great place that we have.
    Pam at PK Art and Floral Design. S.F, CA 94109

  • Lotta Nonsense

    I am in the same boat as Charlie and Pam. Not only did completely inaccurate and fake one star reviews start appearing, but my positive reviews also started disappearing, after I told them I was a tiny business, and couldn’t pay for, and wasn’t even interested in their advertising package. Then the negative reviews really started. It’s obvious from the text the reviews had never even stepped foot into my business. I had only 5 star reviews before this. Yelp is a scam and an extortion racket, and they will be found out. the owner Jeremy Stoppelman is arrogant and always answers these articles online something they do not allow businesses to do. I will be thrilled when when they go down for this immoral garbage. So many business are folding in this economy, and they are actually actively hurting businesses just trying to keep going. I hate Yelp with a passion. My business is almost 10 years old, and it didn’t start being terrible all of a sudden

  • http://www.google.com wow howie

    wow, i was really liking yelp as i’ve started reading some reviews and even wanted to look into some opportunities with yelp. now i’ll definitely read the reviews differently and not take the reviews as seriously. this is rough and cruel when a business will actually go out of their way to try to ruin another just to get a leg up. many business started small, with nothing but a lifetime of blood, sweat, tears, not to mention a lot of personal sacrifices, and many times the lack of simple necessities.

  • Dave Levy

    Yes, Yelp is for hire. I found a better site though at http://ratediary.com/