Business Models

by Michael Ho

Filed Under:
local, pay for placement, ratings, reviews, yelp


Yelp Adds A Tiny Bit Of Transparency... And Inches Away From Pay For Placement

from the extortion2.1 dept

Over the past few years, the review site Yelp has been no stranger to controversies regarding its treatment of comments and criticisms aimed at local businesses. Negative reviews on Yelp have spurred various lawsuits, accusing Yelp of unfair business practices that have been called "Extortion 2.0" -- referring to the accusation that Yelp salespeople put pressure on companies to pay up for better ratings to appear more prominently on Yelp (and to remove the bad reviews that coincidentally seem to appear on the site when these salespeople allegedly suggest that better ratings could be bought).

In response, Yelp has explained (over and over again) that its algorithms are optimized to display the most "trustworthy" reviews of local businesses -- in a way that's completely unrelated to its sales efforts. Trying to put a friendly wrapping around its umpteenth explanation, Yelp has even created a cartoon to help educate everyone on its methods:

However, no matter how simply these explanations are conveyed, they have not been particularly convincing to small businesses who feel punished by bad reviews and see Yelp's services as a veiled threat to their livelihood. So Yelp has taken another step by announcing some changes to its services to avoid further confusion:
  • Businesses can no longer buy a "Favorite Review" like they could before -- so that there's no confusion over businesses being able to influence reviews by paying Yelp. This sounds like a pretty big step towards making it clear that companies can't just buy better reviews, but what does this mean for companies that formerly bought "Favorite Reviews?" Those companies are being penalized with the unexpected removal of this service, and there's still no guarantee that ratings can't be manipulated by cunning business owners or competitors. Though, the conspiracy theorists may never actually be satisfied on this point, and gaming online rating systems will likely always be a nagging concern.
  • Yelp is still keeping its review filtering algorithms a secret, but it will now display reviews that have been removed by its automated filters in an effort to allow users to see a bit of the reviews that Yelp deems suspicious or untrustworthy. However, Yelp is not exactly highlighting these filtered-out reviews -- just making them available to be viewed in case anyone is curious to see what kind of reviews are tossed out on a regular basis.
  • Yelp is adding video ads as a service for businesses -- presumably to offset the loss of its "Favorite Review" feature.
  • Yelp says it's created a Small Business Advisory Council for companies to give feedback to Yelp management. This is an interesting development, but it's not exactly easy to find out more information on how this council works. Granted, it was just announced, but its announcement seems to lack a bit of commitment when there aren't any obvious links about it on (yet?).
  • Yelp proudly states that it's increasing transparency with these changes, allowing businesses and users to peek into what its algorithms are filtering out behind the scenes. But it's not clear that anyone really asked for that feature -- and getting that look at the filtered reviews isn't going to ease the concerns that Yelp's algorithms are inherently weighted against small businesses who don't pay up for advertising space on Yelp.

    The more significant change seems to be that Yelp is shifting away from a "Pay for Placement" business model with its reviews. Replacing its "Favorite Reviews" with video ads seems a bit odd, though -- but apparently video ads were a top request from merchants. So at least Yelp is listening to its customers and responding -- and if Yelp really wants to increase transparency, maybe we'll see how Yelp actually handles feedback someday. But since Yelp doesn't allow commenting on its own blog, chime in here and tell us what you think Yelp is doing wrong or right with its approach.

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    • icon
      Designerfx (profile), 6 Apr 2010 @ 4:02pm


      as a consumer:
      I love yelp. Yelp elite events are free food + drinks + basically free parties at cool places.

      as someone who knows folks who do business with yelp:
      yelp is a piece of crap. Their reviews are indeed reliable and they do try to spot bogus reviews, however the problem is their advertising policy.

      Say you bought some kind of yelp service? You'd be charged for every clickthrough to your business no matter if someone actually went to your business or not. This = horrible. It doesn't put any relevance to whether the advertising was successful.

      Thus it's very easy for certain businesses to drum up that cost for other businesses. All they have to find is the favored review company and send through tons of fake clickthroughs.

      reply to this | link to this | view in chronology ]

      • identicon
        Phoenician, 6 Apr 2010 @ 4:44pm

        Re: yelp

        There are Account Manger positions listed in Phoenix and was thinking about applying, but after reading this article and post, I have changed my mind. Yelp was Yelped.

        reply to this | link to this | view in chronology ]

    • identicon
      AnonCow, 6 Apr 2010 @ 5:39pm

      Step #1: Hire a competent CEO
      Step #2: Come up with a VIABLE business model
      Step #3: Bang some of those "elite" skanks
      Step #4: PROFIT

      reply to this | link to this | view in chronology ]

    • identicon
      BBT, 7 Apr 2010 @ 7:07am

      Once you've lost trust, it's pretty hard to win it back. I'm not sure anything Yelp can do could make me like their service anymore.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 7 Apr 2010 @ 10:53am

      I love how you're pretty much always unbiased, Mr. Masnick. I seriously want to have your children.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 2 Jun 2010 @ 3:18pm

      In the past week I discovered Yelp and enthusiastically posted 14 reviews. I was so pleased that as a consumer, I finally had a place to give proper credit or criticism to businesses. Of those reviews over 50% of them were filtered and suppressed within hours of posting them. Little did I know my independent reviews posted in earnest with no ties to any business whatsoever were considered suspect by the mysterious Yelp algorithms. When questioned, Yelp offers no answer other than the typical "we appreciated your input" crap.

      Additionally I noticed a new Yelper and perused her account out of curiosity. Out her 17 reviews, a whopping TEN had been suppressed & filtered from view.

      As a consumer, a user, & a contributor, this type of excessive suppression of honest reviews really makes me wonder what the flying Fark is Yelp doing?

      So, what really is Yelp doing? A dopey patronizing video aimed at their perceived knucklehead users is insulting and leaves more questions than it answers.

      reply to this | link to this | view in chronology ]

    • identicon
      Yelp Is Dishonest, 12 Nov 2010 @ 9:36am

      Our business has had 5 reviews so far. One is a negative review from a man who is lying about being a client; the other four are very positive. Yelp keeps only the dishonest negative review on our Yelp page, and filters out all positive reviews. Then, after complaining about this, they start hitting me up to set up a "business" account. I will never trust Yelp, again.

      reply to this | link to this | view in chronology ]

    • identicon
      Shadi, 20 Sep 2012 @ 11:11am

      Have you seen the pictures on Yelp's listing on Yelp? Just saw a few, pictures of employees you can tell they were hand picked, I don't think normal good people would want to work for Yelp! There is one picture of this "Yelps Rules" wrote in the sands! This alone shows the mind set of these inhuman people! They believe they have they are ruling our lives! They are aware of destroying lives and they are proud of it! Hoe creepy is that!

      People in over seas pull down dictators by putting their lives on the line, why can't we have an organized demonstration to bring light and attention to this?

      reply to this | link to this | view in chronology ]

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