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Re: “Yelp and the Business of Extortion 2.0

The Huffington Post released an article that attempts to defend yelp in this matter. The link to that article is at the end of this post, but below is my response to this very misguided article:

Like yelp's CEO, this article totally misses the point. The problem with yelp is *not* that it allows consumers to post negative reviews. The *real* problem is that yelp fails to give any business a voice in defending itself against factually incorrect reviews or personal attacks, yelp manipulates reviews under the false pretense of "spam prevention", and yelp creates an environment that intentionally pits consumers against business owners.

Our restaurant has maintained a healthy four star rating on yelp with more than 100 reviews. We have received both positive and negative reviews that were factually incorrect (misstate our hours, prices, ingredients, etc.). In one case, we received a one star review from a patron who was upset that we would not serve him more alcohol, even though he was clearly intoxicated and it would have been illegal for us to do so. Before he left, he urinated on our bathroom floor and told us that he was going to write a one star review on yelp. He later posted a malicious review that did not mention the incident, but was a largely incoherent rant about how horrible our food is. Whether malicious or just factually incorrect, we should have the right to set the record straight and defend our business against damaging reviews. Many other review sites, including yahoo local and rateitall.com, allow people to comment on reviews or cast an unfavorable vote, which leads to more reliable content. Yelp, on the other hand, just ignores business owners who complain about these issues.

Because our restaurant has maintained an above average rating on yelp, they have never offered to remove negative reviews in their sales pitch to us. Instead, they told us that we could control the sort order of those reviews, including the option to put all positive reviews at the top. We were not interested in manipulating the order of our reviews, and simply wanted our reviews to be sorted in chronological order. We were told we could sort reviews in chronological order, but only if we paid $300 a month. We thought that was pretty absurd, since chronological order is the only way to show the true progression of a business and its current state, and should therefore be the default sort order. We have repeatedly declined to advertise with yelp and have lost around 20 four and five star reviews. If yelp would just leave the reviews alone and let them all stand (both negative and positive), we would have easily reached four and a half stars by now.

Yelp continues to insist that any review manipulation is due to “spam prevention” and their secret algorithm. There is a clear legal definition of spam, and yelp’s algorithm has nothing to do with spam prevention. Yelp prevents spam bots by forcing users to confirm an email address before posting a review, and it also allows users to flag posts as spam. Their algorithm is clearly designed to manipulate reviews.

Yelp needs advertising dollars to survive, but they have refused to partner with business owners in any way. When I told one yelp sales guy about the malicious one star review from our drunken patron, he told me that the best way to respond to negative reviews is to offer them something for free. What horrible advice! We won’t buy positive reviews, and we most certainly will not allow ourselves to be extorted by negative reviews. There is a huge disconnect between yelp staffers and the market (business owners) they are trying to attract.

In yelp’s world, a business owner cannot be a consumer. If you are affiliated with a business, you are “one of them” and not allowed to review other businesses or join their precious “elite” club. Although yelp claims that community is their top priority, they fail to recognize that both consumers and business owners make up a community and that both are equally important. As a business owner, I feel that I am much more qualified than the average yelper to review another business, since I know what it takes to provide great service.

Finally, this article refers to yelp as a “blue chip company, backed by blue chip investors, run by smart people”. That is the most ridiculous thing I have heard! Yelp is most certainly not a blue chip company. Yelp is funded by venture capitalists, it has yet to make a profit, and its investors can only hope to see a return. Because it has alienated the very market it needs to survive (small business owners), it seems very unlikely that yelp will survive, let alone reach blue chip status.

Read the Huffington Post article:
http://www.huffingtonpost.com/lawrence-coburn/is-the-yelp-controversy-o_b_169604.html

Posted by Paul on 03/02/2009 at 2:29 PM

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