Yelp and the Business of Extortion 2.0

http://www.eastbayexpress.com/gyrobase/yelp_and_the_business_of_extortion_2_0/Content?oid=927491&page=1

by brianmckenzie • 17 years ago

150 59 17 years ago

eastbayexpress.com

yan2• 17 years ago

Yelp's response: http://officialblog.yelp.com/2009/02/kathleen-richards-east-...

Also, their founder has been active on twitter: http://twitter.com/jeremys

ojbyrne• 17 years ago

So? He denies it, engages in character assassination, and uses a (presumably) co-conspirator to provide supporting evidence. I heard about this two months ago.

Never overestimate the integrity of a CEO.

yan2• 17 years ago

I am not taking sides, just providing references to relevant information.

ucdaz3• 17 years ago

Now he knows how business owners feels to receive a bad review.

jonmc12• 17 years ago

He attacks the article instead of making straightforward statements about his business. I'm really surprised he did not take the opportunity to address the claims that Yelp manipulates content.

michaelneale2• 17 years ago

It kind of implied to me that they do. Or at least did in the past (ie > 1 day ago !).

d13hard• 17 years ago

yelp is ner the top of a long list of sites that

1. people love

2. cannot make money

3. should have found a way to get bought in 2006

get in line behind zuck

fizx• 17 years ago

Who knows what's true here, but I know a lot of businesses that hate Yelp because the business can't control the tone of the publicity. I also know a couple people that game Yelp, by emailing users and bribing to change reviews.

Yelp's the web 2 service that's actually made a difference in my life, but these things always have shady underbellies (e.g. Google, SEO, click fraud).

dpifke2• 17 years ago

Some of the behavior of which Yelp is being accused in this article is plainly illegal. Which makes me question why these "anonymous sources" are talking to a reporter at an alternative weekly newspaper instead of a lawyer. Color me dubious.

nkurz• 17 years ago

Which of the activities would be illegal? The article concludes that while these activities may be unsavory, they probably aren't illegal: "So is it legal for Yelp to do all this? Probably, according to Matt Zimmerman, senior staff attorney at the San Francisco-based Electronic Frontier Foundation."

For reference, I'm a Bay Area business owner with positive reviews on Yelp. I recently received solicitations for advertising, and noticed that our most negative review (non-recent, low votes) appeared to have been moved to the top of the list just prior to the advertising pitch. The sales agent was asked about this, and responded: "The review algorithm has a number of interesting caveats in it. Some of which are best match and relevancy issues."

We did not receive promises of special treatment or the repositioning of this review, but I felt this was implied. While I don't feel that Yelp was acting illegally, I lost a lot of faith in their business practices as a result. I did not participate in this article, but I believe it is accurately reported.

For what it's worth, that negative review (which was from a customer with a legitimate complaint) is now back in a more neutral location, without any further action on our part. Perhaps (and I hope) this was a few rogue employees on the sales team, and the company has now cleaned up its act.

moonpolysoft• 17 years ago

There is no such thing as rogue people on a sales team. In most of the phone jockey shops I've ever been in/around (mostly in the credit card industry) they teach you what is in compliance, but then set unrealistic sales quotas. The idea being that the brighter employees will learn the underhanded tricks they need to get ahead, and the straight arrow ones will fall behind and either quit or get fired.

Running telemarketing shops like that lets management have plausible deniability in the case of a lawsuit yet maintain a status quo that would be out of compliance with any industry regulations.

dpifke2• 17 years ago

If they're paying employees to write bad reviews without regard to their actual experience, it's libel.

If it's an extortion scheme as the article implies, it's tortious business interference.

There could also be issues under the Lanham Act.

wallflower• 17 years ago

Extortion 1.0 presumably being the 'protection money' that Chinatown gangs asked for to 'protect your business'.

gaika• 17 years ago

More evidence from fellow hacker - http://jwz.livejournal.com/1002269.html

mchristoff6• 17 years ago

dna is a rad place and i have utmost respect for the people who run it (i'm actually 50yds from it right now), but jwz's comments don't prove anything. for one thing, night club reviews notoriously suck ass on yelp or any other review site, and therefore shouldn't be taken as the standard. anyone with half a brain can parse through the stupid reviews if they really care that much about a venue, but most of the time if you're going to a club you're going for a specific night or event and you'll judge for yourself. yelp's sweet spot is really restaurants, particularly restaurants in major cities.

also, speaking to his specific claims of "extortion", i don't believe they hold water. paying a fee to put your favorite review on top or putting sponsored links on the site (like google) seems pretty legit to me. deleting negative reviews etc is shady, but i think the jury is out whether that is true or not.

i know i've personally found yelp invaluable moving around to new cities over the past few years. being someone who loves food, i find the vast majority of the time the reviews of restaurants are completely on point, especially if you know how to parse through the comments. does anyone remember the days when the only thing that existed was citysearch? what a piece of junk. i've found so many amazing places on yelp that i wouldn't have found otherwise.

in my experience most small businesses (mostly restaurants) i ask about yelp love it. i ran into a restaurant owner who's friends with a friend of mine in berkeley a few months ago. he was ecstatic about yelp because that night 20 of his seats were filled by yelp alone.

i'm all for exposing shady practices of yelp or any other company for that matter, but most of this stuff is baseless.

mchristoff6• 17 years ago

hn amazes me sometimes. how does expressing your point of view warrant downvotes? bad language? going against popular opinion?

sho2• 17 years ago

"paying a fee to put your favorite review on top or putting sponsored links on the site (like google) seems pretty legit to me"

Are you kidding? It's a review site! Silently manipulating results based on payment from the reviewees is a hideous betrayal of trust. It is absolutely NOT legit.

"in my experience most small businesses (mostly restaurants) i ask about yelp love it"

Who the hell walks around asking businesses what they think about Yelp? Got something to tell us? I'd call you an astroturfer right now if you hadn't been a member so long.

"i'm all for exposing shady practices of yelp or any other company for that matter, but most of this stuff is baseless."

Baseless, is it? Well, I'm waiting for this inside info you've obviously got. Sounds pretty base-ful to me.

run4yourlives• 17 years ago

I feel extremely sad that you can't relate to how the actions of yelp are - at best - unethical business practices and - at worst - plain old extortion.

fallentimes• 17 years ago

If they're not selling review placement and/or editing, what exactly are they selling of value?

Harkins• 17 years ago

The business owner gets to put one (presumably excellent) review on top of all the others, and hide the display of competitors on some local search pages.

ucdaz3• 17 years ago

Sites like yelp don't give value to the local businesses. A better solution is to allow the businesses to reply to the customer's post like a forum. My team and I are working on this right now and will be launching soon!

sosuke• 17 years ago

That's a great idea for sure but I had a question. Most reviews for products are generally bad unless the product was so extremely good that someone wants to share how awesome it is with others or is already a member of the community. That being said how do you think small business owners will respond to forum trolls? My first thought is that it could turn into some ugly threads pitting the business's word against the reviewer where the reviewer is in the anonymous and protect position and the business is more vulnerable.

ucdaz3• 17 years ago

My answer is to check out sites like GetSatisfaction and Uservoice.com. As for the trolls, we have a karma point system in place.

bbobb• 17 years ago

I use yelp when in a new city to find restaurants and have been favorably impressed with its ability to weed out the wheat from the chaff. I would definitely be concerned if Yelp were strong arming content to make money.

At first when I was reading this, I couldn't help but think why Google's Adwords (which I heartily love) doesn't strike me as seedy, but I guess it comes down to how the service is sold. Adwords is opt in without any pressure and a lot of tools that at least make me feel like I'm optimizing my buck. I think if I were called by an Adwords rep and asked to spend more cash or else my pagerank "might go down," I'd feel just about the same as I do about the hypothetical Yelp sales practices.

That said, I'm with you dpifke, it doesn't help the credibility of such an incendiary article that it appears in a lesser-known publication.

nostrademons• 17 years ago

Adwords also clearly labels which results are sponsored and doesn't touch the non-sponsored ones. I think the meat of the allegations in this article are that users have no way of knowing whether a negative review was left by Yelp staff, or a positive one was hidden because the business didn't pay up, or a negative one was hidden because the business did pay.

webwright• 17 years ago

Adwords labels results, but I'm not sure I'll grant clearly.

If you plunk down the average middle aged person in front of Google search results and say, "click the first result", do you think they click the light orange ad at the top of the list? If you told them that was an ad afterward, do you think the average person would've known that?

Or, put it another way-- if you inverted the ad color (light on dark) or put a dark border and bolder ad label, do you think CTR would drop dramatically?

I do.

jwesley• 17 years ago

This is what they get for trying to mix advertising with user generated content. There are too many conflicts of interest between Yelp, advertisers, and anonymous users. Who would buy an ad for a page that can be easily defaced? No one who isn't promised censorship. It's a shame because Yelp is a great service. Maybe they could become more like a search engine, with links direct to vendor sites and user reviews in a separate section on Yelp. Then ads could go direct to business sites, eliminating the bad review issues.

wushupork• 17 years ago

I also have some experience w/ Yelp in this matter with the martial arts schools I teach out of. I've even blogged about it a while back http://blog.pekpongpaet.com/2008/06/25/yelpcom-stop-being-ev...

Basically tons of genuine reviews (well written) have entirely disappeared. I've taken to just copying the reviews and putting them on our site in case they "disappear". Also, they've strong armed us implying we might not be listed up top if we don't advertise.

I've taken it up several Yelp employees of different departments and I get the same cookie cutter legal cut and paste response.

My impression of the company as a whole seems shady at best.

brandnewlow• 17 years ago

Thanks for sharing that link. I just posted it up on the Windy Citizen so Chicagoans following the story can get a local take:

http://www.windycitizen.com/chicago/spotlight/2009/02/yelpco...

gruseom2• 17 years ago

I'm astonished that Yelp would do something like this to jeopardize, and potentially destroy, their reputation. But there are far too many people telling the same story here for me not to believe there's something true in it... they can't all be liars and trolls. It makes me sad. I was a fan.

gcheong• 17 years ago

Would be interesting to actually hear a recording of the advertising sales pitch being made. Should be easy enough to set up and it's just a Youtube away from sharing with the world.

michaelneale2• 17 years ago

It seems their CEO is doing the "beetlguice" thing on twitter: http://twitter.com/jeremys

basically posting an "official" denial of it (even when you read it, its clear they do basically shake people down).

Unfortunate.

lawrence• 17 years ago

When you raise $31M in funding, the pressure must be immense to get the revenues up. It's not enough for these guys to get to profitability. They need to be profitable with $100Ms in revenue. No wonder they are (allegedly) pushing the envelope.

(disclosure: I work for a pseudo competitor)

kolya3• 17 years ago

I've definitely seen the same scam from the user side. My friend left a 1 star review for an auto shop after getting ripped off. Several weeks later the review disappeared. She contacted Yelp who claimed that they "rotate" reviews in and out. This might make sense when you have hundreds of reviews and you want to show a balanced mix on the first page but this shop only had 7 reviews so the rotation strategy didn't make sense here. She left another bad review, again it disappeared. We knew something shady was going on but hearing the story from the other side makes me wonder if the shop just paid Yelp to remove the bad review.

sireat• 17 years ago

Unfortunately, such despicable behavior can be found more often than one would think. In fact, this is not a problem only on internet. When I ran a small business, a serious newspaper(part of a major chain) offered to write favorable article, if I started advertising with them.

Let's just hope it doesn't end like this: http://www.imdb.com/title/tt0075865/

Maro• 17 years ago

Idea: a campaign to mobilize people to use Google's new reordering/removal feature to punish evil sites/businesses. I suppose these changes are somehow reflected in the ordering other users see (?). Targets:

1. Experts Exchange

2. Yelp

3. ...

I already delete experts exchange links from my Google results.

mattmcknight• 17 years ago

I already have a couple people on board the expert sexchange deletion effort.

Yelp was really useful to me for a while, but now I am worried about. I know a couple of local businesses that received a ton of business from the reviews, more than they could handle.

theklub• 17 years ago

Just out of curiosity, whats wrong with experts exchange?

greml1n• 17 years ago

They include the answer to the question in the page so Google and other pages pick it up. You'll often see part of an answer in the blurb under the link in the search results.

When you follow the link, it hides the answer from you and basically tries to shake you down for money to get access to it.

Individually the practices are ok. When dealt with together, it is a nasty business practice.

Alternate explanation: Google "experts exchange sucks"

Alternate explanation 2: If you first found the site while looking for an Expert Sex Change, you might still be bitter.

jasonkester• 17 years ago

You realize of course that Google's reordering tool only affects the results they display to YOU, right?

Please tell me you haven't been furiously hitting the delete button in the hopes of tidying up the internet!

pg• 17 years ago

Currently. They might do more with it.

drenei• 17 years ago

There are three things that come to mind:

1. I use Yelp and so far I've found it useful and accurate. Of course I tend to look for substance in the good comments as well as the bad. (hyperaware of how easy it is for a business to succumb to selling itself through 'fake' comments; aware of the fact that everyone has bad nights and competitors) More than ever these days (I have IB back in high school to thank for starting me down this road): understand that every source has bias.

2. Yelp, to me at least, has shifted power into the hands of the consumer. It is now possible to hear, theoretically, what the users of a business (refer to 1.) think of it - good or bad. This, I would think, would make a few people unhappy - changes in power usually do. And complaining about being unhappy at 'power to the consumer' isn't really a story that is going to get much sympathy.

3. Yelp's business involves a trusting user. To undermine that by allowing businesses to remove negative reviews for a sum of money strikes me as being very short sited. Everything gets out eventually, especially in this day and age. In conjunction with 2., the best attack against Yelp (or the most effective) would be an attack on whether or not you can trust Yelp. Again, I can't see Yelp 'offing' itself like this - unless the team behind it really is that short sighted.

I like yelp, I find it useful and if/when it stops being useful, and if this story is true it won't be long till that happens, I'll stop using it.

flatline• 17 years ago

Based on the article and the comments here, the following seem to be consistently agreed upon:

-Yelp "rotates" reviews

-They offer to "sponsor" good reviews for a fee

As far as I know, other sites (I'm thinking TripAdvisor, and for paid sites, AngiesList) do not do this, which makes the whole thing seem a little shady. Doesn't take much to imagine that they would go one step further into shaking down "customers" to rotate out bad reviews.

tlb• 17 years ago

Someone should do the proper experiment. Create a fictitious retail business, and generate a stream of reviews for it. Any other reviews would have to be faked. If they are writing fake bad reviews and removing them for money, you would then have strong evidence.

joe_the_user• 17 years ago

It is not so easy.

The behavior that you read described in this thread is placing real bad review at the top of the list, review that "normally" wouldn't be so high.

blurry• 17 years ago

They also scrape reviews from other websites. I've found a couple reviews that I wrote elsewhere, "written" by various strangely prolific Yelp users who had single-handedly managed to post hundreds upon hundreds of reviews. (These were for small neighborhood hangout-type restaurants... meaning there is no way they were paid for).

j2d2• 17 years ago

I ran this article by a bunch of nontechie friends and every one of them said they don't want to use yelp anymore. Half of them use it all the time too...

Eliezer• 17 years ago

Well, crap. Someone please replace Yelp.

callmeed• 17 years ago

I built a Yelp-like site for my local area several years ago (before Yelp existed). I never really pursued it, but it was nice to see the idea validated by Yelp's success.

That being said, it stinks if they've really resorted to this. I understand they need to answer to investors, but their choice of business models is fairly un-creative.

If I were to build a better Yelp, it would look like this (off the top of my head):

- Reviews in two columns: positive reviews on the left, negative reviews on the right.

- Bad/good reviews cannot be deleted (unless it can be verified false or shills), but the business owner/manager can reply to the review (tripadvisor does this)

- Business model: allow businesses to sell printable gift cards or discounted vouchers (ala restaurant.com) and take a %

- Business model: for a monthly fee a business can add videos, images, and additional tools (similar to yelp's current sponsorship program but better)

- Business model: build a flexible reservation/appointment SaaS that can be used by any business that needs it. Anything from restaurants to salons to mechanics could use something like this. If a customer could find a good business AND make an appointment on the same site, that's gold right there.

Think out of the box, Yelp ... c'mon

Yelp and the Business of Extortion 2.0

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