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Yelp

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Yelp, Inc.
Company typePublic company
NYSE: YELP
IndustryBusiness ratings and reviews
FoundedOctober 2004
HeadquartersSan Francisco, CA, U.S.
Key people
Jeremy Stoppelman, Co-founder/CEO, Russel Simmons, Co-founder/CTO, and Geoff Donaker, COO
ProductsYelp.com
RevenueUS $83 million (2011)[1]
Number of employees
918 as of 2011[2]
Websiteyelp.com

Yelp, Inc. is a company that operates yelp.com, a social networking, user review, and local search web site. Yelp.com has more than 71 million monthly unique visitors as of January 2012.[3][4]

History

Yelp was one of three projects, including Adzaar and Slide, to come out of the San Francisco incubator, MRL Ventures. The project arose out of research into the local services market by David Galbraith, who worked with Jeremy Stoppelman on the early stages of the project.[5] Stoppelman and Russel Simmons, both of whom were early software engineering employees at PayPal,[6] spun the service off as a separate company. After an aborted start as an email recommendation service,[7] Yelp launched its namesake web site into the San Francisco market in October 2004.[8] The company received $6 million in early funding from venture capital firms Mission Street, led by another former Paypal-er Max Levchin, and Bessemer Venture Partners. Additional investments were made by Benchmark Capital, DAG Ventures, and a private Investor from Laguna Beach, who invested $3 million, $3 million, and $5 million respectively.[9][10] Yelp expanded from its San Francisco roots to open an east coast office in Manhattan[11] in the first half of 2008 and by introducing a Canadian version of the site in 2008.[12] A UK version was launched in 2009.[13] Yelp later added international sites in Spain, France, Germany, Austria, the Netherlands and Australia.[14][15][16] In 2008, Yelp's page view count overtook its predecessor and early rival, Citysearch.[17][18] Revenues were approximately US$30 million for 2009, with $50 million expected in 2010.[19]

On 17 December 2009, TechCrunch reported that Yelp was in advanced negotiations with Google to buy the company for more than $500 million.[19][20] By 21 December, the same source was reporting that Yelp's CEO had rejected the Google offer.[21]

On October 24, 2012 Yelp announced their acquisition of their european counterpart and competitor Qype[22]. [edit]

Products and services

Yelp provides online local search capabilities for its visitors. A typical search includes what the user is seeking (e.g. a barber shop) and the location from which the search is to be performed, entered as a specific address, neighborhood, city/state combination, or zip code. Each business listing result contains a 5-point rating, reviews from other site visitors, and details such as the business address, hours, accessibility, and parking. Site visitors can aid in keeping the business listings up to date, with moderator approval, and business owners can directly update their own listing information.[23]

Listings and related content are organized by city and a multi-tier categorization system. Content and listings can also be discovered through categorized reviews or via Yelp member profiles and their review lists. Maps leveraging Google Maps show reviewed businesses to further aid in business discovery.

Information can be accessed by web or mobile browsers.

Community

Yelp combines local reviews and social networking functionality to create a local online community.[24][25] Adding social web functionality to user reviews creates a reputation system, whereby site visitors can see which contributing users are the most popular, respected, and prolific, how long each has been a member, and which have interests similar to theirs.[26] Peer feedback mechanisms, and placement of popular reviews on the site and in local market Yelp newsletters help motivate contributors.[27] Business owners can also communicate with contributors who post reviews on their page via messages or public comments.[28] Yelp also has a "First to Review" reward system to create a competition among contributing members, further motivating the creation of reviews and adding to the site's business coverage. Yelp allows real people to contribute their own reviews.[29] This body of social reviews creates a participatory culture where anyone can share their insight and suggestions and add to a body of “collective intelligence” on local businesses by using their personal knowledge and skill sets to post, revise, and discuss content on an ongoing basis.[30] Essentially, this form of intelligence allows people to actively participate and share their knowledge with other users.

The company strengthens the online community through off-line events at nightclubs, bars, restaurants, and cultural venues in various cities for its most prolific and loyal contributors, named "Elite" members on the site.[7][31] These members must provide a photo and their real name, be at least of legal drinking age, and not own a local business. In return these members receive a special badge on their personalized page for every year they author a specific number of reviews or contribute to the improvement of the online community. The concept is meant to indicate that the user is a trusted author of business reviews.[32] To gain Elite status, it is often helpful to be nominated by other Elite users but recognition is bestowed when one writes useful, funny or cool reviews so members can vote on those reviews.[33]

The site also has a forum for online socialization and to discuss local businesses and events.[34]

A number of competitors emulating Yelp concepts have failed or were acquired.[23][35][36]

Yelp's use of social media, through Yelp TALK and Yelp MESSAGING offers yelpers' the ability to connect on a more personal level within the virtual review community. The site is most active in the United States in larger cities but is becoming more internationally global with Europe as the most prominent Yelp hub.

Content

The Yelp sites have listings for businesses throughout various nations and accept reviews of any business or service.[6] Listings vary widely in nature with the site including listings for storefronts such as restaurants and shops; service businesses such as doctors, hotels, and cultural venues; and non-business locations such as schools, museums, parks, and churches.[37]

San Francisco, the home city, remained the most active as of 2008, with significant adoption in 18 metro areas including Boston, Chicago, New York, Washington, D.C., San Diego, and Los Angeles.[17] San Francisco usage earned the site over 4000 reviewed restaurant listings, some with hundreds of reviews each.[17] The site claimed over 2.3 million reviews overall as of February 2008.[10] Reviews trended 85% positive as estimated by the CEO[25] and were thought to come primarily from the 26–35-year old demographic.[34]

API

Yelp released a free REST- and JSON-based application programming interface (API) in August 2007.[23] The API provides access to business listing details, reviews, photos, and ratings and can be used to add business information to a website, widget, or mobile application.[38] The API has been used to integrate business reviews into existing Google Maps applications such as on Zillow.com. Yelp is an example of ubiquitous computing because one can access the service from their personal computer as well as their mobile smart phone.

Facebook Beacon integration

In December 2007 Yelp implemented Facebook Beacon. Changes to the site privacy policy were made to accommodate this feature, which experienced negative press at the time.[39]

Advertising program

Businesses may advertise with Yelp for preferred search result placement and extra listing features. For the advertising fee, the business may include an individualized message, video and photo slide show onto the web page for its listing as well as receive reports on listing traffic.[40]

Yelp has taken measures to prevent false check-ins by service users at their advertising clients' locations.[41]

Reception

Criticism of reviews

Yelp has been criticized over the fairness of both negative and positive reviews on the site. A competitor can easily write an anonymous review with either extreme in mind. Yelp states that it will not censor reviews, but will remove suspicious reviews.[42] Reviews are filtered for accuracy and reliability by an automated process that is intended to be neutral.[43] The Oakland, California based East Bay Express published a 2009 story highlighting businesses that said that Yelp salespeople offered "to hide negative customer reviews of their businesses" by paying for advertising sponsorship contracts, and that positive reviews were removed and negative ones appeared when the business refused.[44][45] In February 2010, two law firms filed a class action lawsuit, later dismissed by a federal judge, accusing Yelp of "extortion" on behalf of a veterinary hospital in Long Beach, California that made similar claims.[46][47] Partially in response to these allegations[failed verification] and in a move to increase transparency, Yelp added a feature that shows which reviews were filtered by its filtering algorithm. Nonetheless, Yelp continues to receive criticism over the filtering system[48] as well as accusations by business owners of review manipulation.[49]

Questions over accuracy of reviews and ratings

In 2012, a team of economists from the University of California, Berkeley studied 300 restaurants performances and crossed referenced them with Yelp reviews. The study found that an extra half star translated into more evening bookings after 7 pm by up to 49%. However, the researchers found that Yelp's calculations of ratings were skewed; a restaurant that had a 3.74 rating would be shown on the site as a 3.5, while a restaurant with a 3.76 rating would be shown on the site as a 4.0 rating. The researchers concluded that while there is an incentive for restaurants to make fake reviews to rig ratings, users of Yelp are advised to take such ratings and reviews with caution.[50]

Incidents

Several lawsuits have been filed by business owners against reviewers. On 3 November 2009, a Yelp user was confronted by the owner of a bookstore in San Francisco at his home. The user had posted a review criticizing the store and received a string of angry messages towards him, which he revealed through screenshots. The user called the police, who arrested the bookstore owner, and obtained a restraining order.[51][52]

Another form of illegitimate review concerns people who have never visited an establishment. In July 2010, American chef Graham Elliot's sandwich shop Grahamwich had already received a negative one-star-review from a user complaining that the not-yet-opened restaurant had ruined his "pleasant walk". Elliot commented that this made him "question the legitimacy of the reviews involving businesses that are in actual operation."[53] Elliot also said he had been "kicked off Yelp three times for responding to reviews that were just plain factually wrong."[54]

See also

References

  1. ^ "Yelp To IPO On NYSE, Loses $16M On $83M Revenue In 2011".
  2. ^ "Yelp Inc". San Francisco Business Times. {{cite web}}: |access-date= requires |url= (help); Missing or empty |url= (help); Text "http://www.hoovers.com/company/Yelp_Inc/rhshtif-1.html" ignored (help)
  3. ^ "2010: Yelp by the Numbers". Yelp, Inc. Official Blog. 15 December 2011. Retrieved 15 December 2011.
  4. ^ "yelp.com (rank 88) – Web Site Audience Profiles from Quantcast". Quantcast. 2008-07. Retrieved 2008-08-19. {{cite web}}: Check date values in: |date= (help)
  5. ^ "PayPal co-founder pops first venture out of incubator". Silicon Valley Watcher. 12 August 2004.
  6. ^ a b Graham, Jefferson (12 June 2007). "'Yelpers' review local businesses". USA Today. Retrieved 19 August 2008.
  7. ^ a b O'Brien, Jeffrey M. (10 July 2007). "Business paradigm shifts and free tequila shots". Fortune,CNN Money.com. Retrieved 20 August 2008.
  8. ^ Mawby, Nathan (5 December 2011). "Yelp is at hand when you need to know". Herald Sun. Retrieved 18 December 2011.
  9. ^ "City guide Yelp raises $10M in second round". San Francisco Business Times. 5 October 2006. Retrieved 19 August 2008.
  10. ^ a b "Yelp yanks another $15 million". CNET News.com. 27 February 2008. Retrieved 19 August 2008.
  11. ^ McCarthy, Megan (27 February 2008). "A Mighty Yelp! Review Site Gets $15M". CondéNet, Inc. Retrieved 1 October 2008.
  12. ^ Jensen, Michael (5 June 2008). "Yelp bringing local reviews to your iPhone and the World". Archived from the original on 30 July 2008. Retrieved 1 October 2008.
  13. ^ Jeffrey M. O'Brien (9 January 2009). "Yelp jumps the pond". Fortune.
  14. ^ Schonfeld, Erick. Yelp Moves To Spain As International Traffic Doubles. TechCrunch. 21 May 2011.
  15. ^ Reviews site Yelp is coming to the UK – and bringing the parties, guardian.co.uk, 2009
  16. ^ Griffith, Chris (30 November 2011). "Review site Yelp goes live in Australia". The Australian. Retrieved 4 January 2012.
  17. ^ a b c Duxbury, Sarah (27 June 2008). "Restaurants Learn to Yelp". San Francisco Business Times. Retrieved 1 July 2008.
  18. ^ McNeil, Donald G. (4 November 2008). "Eat and Tell". New York Times. Retrieved 6 November 2008.
  19. ^ a b Michael Arrington (17 December 2009). "Google In Discussions To Acquire Yelp for a Half Billion Dollars Or More". Techcrunch.
  20. ^ Todd Bishop (18 December 2009). "Google and Yelp working on deal: Will Microsoft put up a fight?". TechFlash.
  21. ^ Caroline McCarthy (21 December 2009). "Yelp bails on Google deal?". CNET.
  22. ^ http://officialblog.yelp.com/2012/10/welcoming-qype-to-the-team.html
  23. ^ a b c Nick Gonzalez (28 April 2008). "Yelp Lets Businesses Fight Back". TechCrunch. Cite error: The named reference "TechCrunch1" was defined multiple times with different content (see the help page).
  24. ^ Dvorak, John C. (26 December 2005). "Two Wrongs Make a Right". PC Magazine.
  25. ^ a b Seth Sutel (3 July 2007). "For Latest Reviews, Chefs Look Online". Washington Post. Associated Press.
  26. ^ Joshua Porter (25 June 2008). "Social Design Patterns for Reputation Systems:An Interview with Yahoo's Bryce Glass (Part II)".
  27. ^ Saul Hansell (12 May 2008). "Why Yelp Works". New York Times.
  28. ^ "Yelp FAQ". Retrieved 9 December 2011.
  29. ^ yelp.com
  30. ^ http://michaelnielsen.org/blog/collective-intelligence-by-pierre-levy/
  31. ^ McCarthy, Caroline (22 June 2007). "Social networks geared for offline success?". CNet News. Retrieved 19 August 2008.
  32. ^ "Understanding Community Leadership: An Interview with a Member of Yelp's "Elite"". 28 May 2008. Retrieved 20 August 2008.
  33. ^ "Yelp Elite Squad". Retrieved 6 October 2009.
  34. ^ a b Heather Maddan (18 June 2006). "Casting the Net:Yelp is on the way". San Francisco Chronicle.
  35. ^ Michael Arrington (23 October 2007). "Judy's Book To Shut Down. Yelp Is The Last of The Local Review Sites Still Standing". TechCrunch.
  36. ^ Matt Marshall (27 February 2008). "Citysearch snaps up Insider Pages in local search race". VentureBeat.
  37. ^ "Yelp Sales Pitch". The Register. 13 August 2008. Retrieved 20 August 2008.
  38. ^ "Yelp Review Search API". Yelp.com. Retrieved 18 December 2011.
  39. ^ Perez, Juan Carlos (30 November 2007). "Facebook's Beacon More Intrusive Than Previously Thought". PC World. Retrieved 20 August 2008.
  40. ^ Pavini, Jeanette (5 August 2008). "Business Owners 'Yelp' About Internet Ratings Site". CBS 5. Archived from the original on 22 August 2008. Retrieved 20 August 2008.
  41. ^ Newton, Casey (24 November 2010). "How Yelp plans to curb check-in fraud". The San Francisco Chronicle.
  42. ^ Pavini, Jeanette (5 August 2008). "Business Owners 'Yelp' About Internet Ratings Site". Archived from the original on 22 August 2008. Retrieved 26 August 2008.
  43. ^ "Yelp FAQ". Retrieved 11 September 2012.
  44. ^ Kathleen Richards, Yelp and the Business of Extortion 2.0, East Bay Express, 18 February 2009. Retrieved 21 October 2009
  45. ^ Richards, Kathleen (18 March 2009). "Yelp Extortion Allegations Stack Up". East Bay Express. Retrieved 18 December 2011.
  46. ^ Kim Zetter (24 February 2010). "Yelp Accused of Extortion". Wired Magazine.
  47. ^ "Yelp wins dismissal of class-action lawsuit". Los Angeles Times. 26 October 2011.
  48. ^ Forbes http://www.forbes.com/sites/jimhandy/2012/08/16/think-yelp-is-unbiased-think-again/. {{cite news}}: Missing or empty |title= (help)
  49. ^ WFSB Staff (26 September 2012). "Local restaurant owners claim Yelp.com manipulating reviews". WFSB Channel 3 Connecticut News.
  50. ^ Jamie Doward (1 September 2012). "How online reviews are crucial to a restaurant's takings". The Guardian.
  51. ^ Farooq, Sajid (4 November 2009). "San Francisco Bookstore Accused of Violent Yelp Confrontation". Retrieved 4 November 2009.
  52. ^ Aileen Yoo (5 November 2009). "Nasty altercation between Yelp critic, bookstore owner". San Francisco Chronicle.
  53. ^ Raphael Brion (1 September 2010). "Graham Elliot's Unopened Resto Gets a Negative Yelp Review". Eater.com. Retrieved 1 January 2011.
  54. ^ Joshua David Stein (27 July 2010). "Graham Elliot Bowles on Haters, Pills and Being on Fox". Eater.com. Retrieved 1 January 2011.
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