Yelp and the Business of Extortion 2.0 

Local business owners say Yelp offers to hide negative customer reviews of their businesses on its web site ... for a price.

The phone calls came almost daily. It started to get creepy.

"Hi, this is Mike from Yelp," the voice would say. "You've had three hundred visitors to your site this month. You've had a really good response. But you have a few bad ones at the top. I could do something about those."

This wasn't your average sales pitch. At least, not the kind that John, an East Bay restaurateur, was used to. He was familiar with Yelp.com, the popular San Francisco-based web site in which any person can write a review about nearly any business. John's restaurant has more than one hundred reviews, and averages a healthy 3.5-star rating. But when John asked Mike what he could do about his bad reviews, he recalls the sales rep responding: "We can move them. Well, for $299 a month." John couldn't believe what the guy was offering. It seemed wrong.

In fact, something seemed shady about the state of his restaurant's negative reviews. "When you do get a call from Yelp, and you go to the site, it looks like they have been moved," John said. "You don't know if they happen to be at the top legitimately or if the rep moved them to the top. You don't even know if this is someone who legitimately doesn't like your restaurant. ... Almost all the time when they call you, the bad ones will be at the top."

Usually, John said, he would politely decline to advertise. "Well, thanks," he'd say. "I'll talk to my partner about it." Or, "It's not really in my budget right now." But inevitably, in another week or so, he'd get another phone call. Occasionally, the voice on the other end of the phone would change, but the calls continued. These days, John chooses to not answer his phone when it's from a number with a 415 area code.

John may sound paranoid, but he's got company. During interviews with dozens of business owners over a span of several months, six people told this newspaper that Yelp sales representatives promised to move or remove negative reviews if their business would advertise. In another six instances, positive reviews disappeared — or negative ones appeared — after owners declined to advertise.

Because they were often asked to advertise soon after receiving negative reviews, many of these business owners believe Yelp employees use such reviews as sales leads. Several, including John, even suspect Yelp employees of writing them. Indeed, Yelp does pay some employees to write reviews of businesses that are solicited for advertising. And in at least one documented instance, a business owner who refused to advertise subsequently received a negative review from a Yelp employee.

Many business owners, like John, feel so threatened by Yelp's power to harm their business that they declined to be interviewed unless their identities were concealed. (John is not the restaurant owner's real name.) Several business owners likened Yelp to the Mafia, and one said she feared its retaliation. "Every time I had a sales person call me and I said, 'Sorry, it doesn't make sense for me to do this,' ... then all of a sudden reviews start disappearing." To these mom-and-pop business owners, Yelp's sales tactics are coercive, unethical, and, possibly, illegal.

"That's the biggest scam in the Bay Area," John said. "It totally felt like a blackmail deal. I think they're doing anything to make a sale."

Yelp officials deny that they move negative reviews, although such allegations have surfaced many times before. The issue is even addressed on the web site's Frequently Asked Questions page. Chief Operating Officer Geoff Donaker said advertisers and sales representatives don't have the ability to move or remove negative reviews. "We wouldn't be in business very long if we started duping customers," he said.

But Donaker's denials are challenged by nine local business owners and also by a former contract employee who worked with Yelp in its early days. That person, who is still close to some Yelp employees and only agreed to be interviewed if granted anonymity, said several sales reps have told him they promised to move reviews to get businesses to advertise. "It's not illegal or unethical," he said they told him. "We're just helping the little guy. It doesn't hurt them, it benefits them."

Such tactics may be legal, but they clearly raise ethical concerns. Yelp touts its web site as consisting of "real people" writing "real reviews." The allegations of business owners who have tangled with the company suggest otherwise.

If Yelp indeed suppresses honest reviews in exchange for its advertisers' money, it is cheating users who expect genuine consumer feedback. Conversely, if Yelp demands payment to remove even dishonest reviews, then advertisers are being cheated.

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Cue CEO Stoppleman's comments on this article in 3... 2....1... and then cue him posting an update on Yelp's blog... and then cute Yelpers vigilante justice by giving 1 star reviews to East Bay Express's business listing on Yelp... and then cue a Yelp Talk post with people bashing this article. All in a day's work at Yelp.com.

Posted by nhaley on February 18, 2009 at 7:40 AM | Report this comment

Don't forget the cue for Nish Nadaraja in PR with some of his amateur spin....oh, wait...
I am Nish. I have so many aliases I forgot who i was for a minute!

Posted by Lorna on February 18, 2009 at 11:16 AM | Report this comment

Question - is this article 6 months on the making or you have found every disgruntled person against Yelp? I think in whatever business you are going to find those who complain about hard tactics. I don't condone such actions but unless Yelp monitors their sales staff on the phone, you probably have very aggressive sales persons who are paid based on their sales. Don't get me started about Credit Card companies. Extortion is such a strong word that I would think someone had taped the conversation instead of hearsay. As to reviews, if the businesses are getting reviews removed based on not being a Yelp business ad, do they care since they advertise somewhere else. If they start getting negative reviews as a result of not advertising or buying ads in Yelp, then they can complain. In the meantime, just move on! The story is getting old.

Posted by Melapricot on February 18, 2009 at 12:16 PM | Report this comment

Desperate times call for desperate measures.

Posted by Genry on February 18, 2009 at 12:25 PM | Report this comment

Are you sure Kathleen Richards isn't related to Stephen Glass? There are probably thousands of writers in the Bay Area looking for work right now, East Bay Express. Maybe you should hire someone to write who has heard about fact-checking.

I handle the advertising for a business owner who advertises with Yelp for two businesses, and I know for a fact that Yelp doesn't offer an ad package for $299. If they did, I'd buy that one and save a few bucks. Nobody has EVER offered to remove or move our negative reviews to the bottom (though sometimes I wish they would, it would make my life a lot easier). On the contrary, they let me put a "favorite review" on the top, but regardless, those negative reviews stay, unless I personally do something about them and try to contact the reviewers. That's it. Maybe they should change their sales script over there or something, but I have had nothing but good experiences with them.

And for the record, both of his businesses are getting really solid return from the money we've spent on advertising with Yelp. For all of the bad stuff it can bring, I've been really thankful for Yelp.

Posted by Kee on February 18, 2009 at 1:55 PM | Report this comment

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