Yelp grows up

    “Some businesses are never going to be happy with a paradigm that allows customers to comment, or makes them have to have to earn their content,” Vince Sollitto of Yelp tells me

    It’s hard to argue. As Yelp has grown from fledgling start-up to critical mass website, serving over 30 million visitors a month, it’s biggest challenge hasn’t been managing its huge and devoted online community, but rather caring for the relationships it has with the hundreds of thousands of businesses across North America whose listings appear on the social review website.

    That problem reared its head as three lawsuits against the company have been filed in recent weeks, alleging Yelp engaged in extortion and fraud. The main arguments are that the company games ratings, then pressures businesses into buying advertising to salvage their online reputations. This week, Yelp made some changes to its site that seem to finally fix some of the biggest complaints business owners have about it. But, the company says, don’t take that as a sign the company is capitulating to critics, or that they’re right.

    Businesses listed on Yelp, many of them small restaurants, mom and pop shops, and medical offices, aren’t used to having a third party managing their public image. In fact, to some of them, it feels like Yelp is creating that image out of whole cloth. The idea that Yelp is distorting reviews and ratings in order to open a door for its aggressive sales force has been the biggest knock on the popular website, founded in 2004 by former Paypal engineers Jeremy Stoppelman and Russel Simmons.

Fear of the unknown Yelper

    Yelp’s setup can feel, to small businesses, less than forthright. The same company that shows a list of user-submitted reviews and a star ranking of your business also calls you up and asks you to spend a couple hundred dollars a year on advertising. When you dive into the pages Yelp created just to explain its programs to local business, the lines between the two programs are clearly drawn. But harried owners of coffee shops, wine bars and dry cleaners don’t always take the time to read through those materials with due care.

    After being exposed to Yelp however, either by a sales call or the inevitable harsh review, proprietors might start paying more attention to their Yelp ranking—misreading the constantly shifting reviews as a nefarious plot to extort them.

    That’s just not true, the company maintains. The reviews—good, bad and other, are earned by the businesses. When Yelp hides a review, it does so only because it suspects it to be a shill.

    And some proprietors, says Sollitto, are actively gaming the system themselves. That includes the 11 small business owners who are suing it.

    “To be frank, some of the plaintiffs that have the gall to sue us are businesses that we know tried to spam their pages, wrote fake reviews of their own business or for one another. We know that there are folks that are unhappy with us because we prevented them from misleading consumers about their business. I don’t know if educating them would’ve prevented [the lawsuits],” Sollitto told me.