More Carnage at LA Times

I have largely stopped writing about the layoffs, revenue declines and general troubles of the print newspaper industry. It’s just too depressing for me to focus on. But just imagine being a journalist inside one of these organizations.

PaidContent posts about the latest round of layoffs at the LA Times (though apparently digital isn’t affected). From the paper’s own coverage featuring the internal letter from editor Russ Stanton:

In the coming weeks, the number of jobs across Editorial will be reduced by 70 positions, or 11%. As part of this move, we will be putting into place the final pieces of the newsroom reorganization that we began last year.

I grew up in LA and remember when the LA Times was a great paper (its parent Tribune Co is in Chapter 11). It hasn’t been one for some time.

The trouble with cost-cutting like this is that it accelerates the downward spiral that it may be designed to avoid:

1. Diminished coverage/features/depth means it’s less engaging and there’s less reason to subscribe or read the print edition
2. Declining readership means less revenue
3. That requires more cost cutting

There are those who argue we’re going through a “correction” and that newspapers will ultimately find some sort of cost-revenues equilibrium. I don’t think I agree. Some number of publications will simply disappear — period. The industry overall will be weaker and other media will try and take the place of failed print publications.

While it’s easy to be a critic on the sidelines, I’m not sure if I were running a paper that I would have any magic solutions. The cost cutting is probably mandated by free-falling revenues and economic necessity at this point.

The one bright spot of course is online, where traffic continues to grow:

The economics of online, however, don’t allow for replacement of lost print revenues — as has been pointed out for a number of years. The newspapers of course are the first beneficiaries of APT, Yahoo!’s display ad platform (and corresponding distribution). Hopefully that will help them significantly in their effort to grow online revenues.

The newspapers can no longer afford to rep their own properties alone and must gain as much distribution as they can for their advertisers. They also need to move more into the SMB segment, which they haven’t been very successful penetrating.

___

Take a look at this clip from 1981 on newspapers’ early use of what would become the Internet (originally via NYTimes and TechCrunch):

OpenTable Makes an IPO Reservation

Yesterday OpenTable filed an S-1 to go public and there was a lot of commentary. From the S-1:

We initially focused on acquiring a critical mass of local restaurant customers in four metropolitan areas: Chicago, New York, San Francisco and Washington, D.C. These markets have since developed into active, local networks of restaurants and diners that continue to grow. We have applied and continue to apply the same fundamental strategy in developing and penetrating our other markets. As of December 31, 2008, the OpenTable network included approximately 10,000 OpenTable restaurant customers spanning all 50 states as well as select markets outside of the United States. Since our inception in 1998, we have seated approximately 90 million diners through OpenTable reservations, and during the nine months ended September 30, 2008, we seated an average of approximately 2.8 million diners per month. For the twelve months ended December 31, 2007 and the nine months ended September 30, 2008, our revenues were $41.1 million and $41.3 million, respectively.

(emphasis mine)

OpenTable has built, over time, a successful business. It makes sense that they want to go public. Whether it’s a good investment is another question.

The real issue is where does the company go to grow? OpenTable is angling to become Zagat I believe — though it has a considerable way to go in terms of brand strength — and it could also expand horizontally into other areas where booking/ticketing is involved. Even though OpenTable is supported by fees from restaurants I believe we’ll see advertising introduced at some point.

However, there are competitors out there that offer reservations without the inventory software management integration and could pose a problem if they become viable alternatives in any of OpenTable’s core markets.

Compare Yelp:

Internet2Go ‘in the Can’

We did Internet2Go yesterday at Mezzaine in San Francisco. It was a small event in an unconventional setting. We had a mix of ad agencies, mobile ad networks, technology companies and others. The idea was to help educate people about mobile marketing now (not speculate about the future) and offer a forum for real discussion.

The quality and collection of speakers and companies there was really unprecedented for an informal event like this. Thanks in particular to Yahoo!, Verve Wireless, NearbyNow and JumpTap who supported this first-time event.

We wanted it to be very different than a traditional “conference.” I think that it was. It was an experiment but according to the feedback I got was a success. Thanks everyone who attended.

Twitter Business Model Contest

Silicon Alley Insider is doing something fascinating. They’re soliciting business model ideas/presentations for Twitter. They’ve posted a number of the leading entry decks. Here is the list and links to the individual slide decks:

• Twitter Market Research
  
• Twitter Coupons
• Twitter SMS, Branding, and SEO
• Twitter Split Into Three
• Twitter Contextual Ads
• Twitter Corporate Accounts, More Market Research
• Twitter As Craigslist
• Twitter Premium Developers Platform
• Twitter Suggested Ads To Re-Tweet
• Twitter SMS Advertising
• Twitter Premium Accounts, Contextual Ads, Search Ads, Virtual Goods, Affiliate Marketing

Why this is fascinating to me:

• People care enough/are intrigued enough to think through these issues for Twitter and make these presentations
• The fact that there’s an online culture that enables this (that you can solicit the community’s ideas for your business — nothing new but still kind of amazing)
• The winner(s) will likely get jobs or consulting gigs at Twitter

Pew: Interesting Age-Activity Segmentation

The folks at Pew have taken their survey data from the last two years and turned it to a report that segments Internet activity by generational category. Who IMs, uses social nets, watches video, uses search, writes reviews?

All these questions and many others are answered in the report, which is quite interesting. I’ve written it up in slightly more detail at SEL.

While the young are into social networks and older users are more into online banking, everyone uses email and searches.

Question: Optimal Biz Profile Page?

Somebody asked me whether there was an optimal SMB landing page/business profile page layout. There’s been tons of website multivariate testing. But what about on business profile pages?

Are there any studies or examples that you’re aware of?

From the Land of LMS

Here are some posts today from LMS:

• Coupons Inc Buys iPhone App GroceryIQ
• Can Firefox Boost Windows Mobile?
• Acer to Launch Smartphone, Which OS?
• iPhone Still Driving New Business for AT&T

NBC Ramping Local Content

NBC of late has been adding more local features and content. The Mixpo post below discusses the move to add local video advertising on its network of sites. In addition, NBC is adding neighborhood level news content (via Outside.in) to some of its affiliate sites such as NBC NY. (Here’s a write up from MediaPost.) 

Beyond this, NBC has introduced local favorites/voting — essentially stealing from CityVoter — with “Golden Local” awards.

I like the idea of voting vs. narratives. It serves two purposes: 

• Creates engagement and more participation — less of a barrier to entry so to speak
• Generates qualitative evaluations of local businesses more quickly 

NBC also has the benefit of its TV assets to push the voting and site as a resource for local information.

Mixpo Partners with Five Local Media Companies

Online video platform Mixpo announced deals with five local media companies: NBC Local Media, Tribune, Freedom Communications, TownNews.com, and Fisher Communications. These companies will use the Mixpo platform/tools to run video on their sites. According to the release:

Under today’s agreements, each partner is integrating Mixpo’s VideoAd platform into their online advertising solutions. With the increased effectiveness of video advertising and seamless integration of the Mixpo technology, these local media publishers are able to leverage their existing assets, such as highly localized sales forces, targeted audience reach, and existing advertising clients, to better monetize their display ad inventory and generate increased revenue.

In other words, these folks will all be selling video to their local advertisers. Distribution will presumably not be across sites but rather on O&O sites.

It’s only a matter of time, however, until all sales channels pushing video opt for third party syndication, a la SpotMixer and Jivox. In addition all this SMB advertiser video will be on YouTube, but will YouTube carve out an area for local search or otherwise start conditioning people to look for this content? And how will Google/GMaps address all this video content (beyond simple indexing)?

AT&T Reports Earnings: YP Details

I’ve written about the wireless and iPhone aspects of the Q4 earnings at LMS. The highlight in my mind is 1.9 million iPhone activations, 40% of which were new subs. 

Here’s what the company said about publishing and Internet (not ISP business):

AT&T’s Advertising & Publishing operations deliver 173 million directories to residences and businesses in 22 states and have a premier online presence nationwide with YELLOWPAGES.COM, which offers consumers access to local business information, the latest business listings, city guides, maps and driving directions. Combined, these print and online products receive approximately 5 billion consumer searches a year for local business information and over the year, we provided more than 1 million advertisers with valuable sales leads to help their businesses grow.

Advertising & Publishing revenue trends reflect migration from print to electronic search, including rapid growth at AT&T’s YELLOWPAGES.COM. In the fourth quarter, Advertising & Publishing’s Internet revenues increased 31.6 percent versus the year-earlier quarter, and total Advertising & Publishing revenues declined 9.8 percent, in part reflecting revenues lost through the sale of a sales agency business that serves independent telephone companies. That transaction closed in the second quarter of 2008. Excluding revenues from this sold unit, fourth quarter Advertising & Publishing revenues would have declined 6.3 percent year over year.

Compared with results in the year-earlier quarter, fourth-quarter reported operating expenses totaled $885 million versus $966 million; operating income totaled $443 million, compared with $507 million; and the segment’s operating income margin was 33.4 percent versus 34.4 percent.

Adjusted results for Advertising & Publishing exclude merger-related noncash amortization costs in both quarters. Compared with results in the year-earlier quarter, fourth-quarter 2008 adjusted operating expenses totaled $709 million versus $790 million; adjusted operating income totaled $619 million, compared with $683 million; and adjusted operating income margin was 46.6 percent versus 46.4 percent.

In November, AT&T announced a realignment of its advertising sales and product responsibilities under two new business units to better help businesses take advantage of the full suite of advertising opportunities in print, Internet, TV and wireless. Under the new alignment, AT&T’s Advertising & Publishing business unit has been renamed AT&T Advertising Solutions and is responsible for all AT&T advertising sales. In addition, AT&T’s YELLOWPAGES.COM business unit has been renamed AT&T Interactive to reflect its expanded role, which includes the development, management and delivery of online and mobile advertising products across all of AT&T’s media platforms, including AT&T’s broadband, wireless and U-verse customer bases.

(my emphasis)

ReachLocal Becomes Google UK Reseller

Just as in the US, ReachLocal has become an “Authorised Reseller of Google’s AdWords advertising programme in the UK.” 

Reach and WebVisibile both have an international presence. I don’t know of any others in the US that have “jumped the pond” however. 

Dependence on Google in the UK is even greater than in the US given its nearly 90% marketshare (Google.com + Google.co.uk).

i2G: Getting ‘Down & Dirty’

Another self-serving promo here . . . but I’m pretty “psyched” (to use the vernacular) about our Internet2Go (i2G) show tomorrow in SF. I’ve been interacting with the speakers and looking at some of the presentations and it’s great stuff. 

Many of the conferences I attend are populated with thoughtful speakers who express lots of abstract opinions, sometimes supported with data in slides. Rarely however does one really get down to the level of concrete examples or case studies. SMX does a great job of this with SEO/SEM: very practical stuff. 

With i2G we’ve tried to mix informed discussion with cases and examples so that people actually get to hear about and see what’s really going on in the market — right now — rather than speculating about market size or revenues at some point in the future. Almost all forecasts turn out to be incorrect (to varying degrees) either in their timing or projections or both. 

In particular I was looking at the HipCricket slides this morning and getting excited because CMO Jeff Hasen is going to present a range of really interesting cross platform marketing cases (mixing traditional and mobile media). Scott Dunlap CEO of NearbyNow is also going to present a new mobile-traditional media integration that will be announced tomorrow, which is really intriguing and the shape of things to come. 

Anne Bezancon of 10-20 Placecast isn’t doing a case study presentation, she’s on the mobile ROI panel. But I’m going to get her to talk about a recent cross-platform campaign, which had a strong local element and some great results that validate not only the power of mobile but local as well in an empirical way. This is the first such data that I’m aware of ; and they did A/B testing to demonstrate the impact of the local stuff. 

In addition, the diversity of the speakers in my mind is also going to be great. While this is a smallish, informal event most of the major players in mobile advertising will be in the room (i.e., Yahoo, Microsoft, AOL, Google, JumpTap, Verve Wireless, 4Info, Quattro, AdMob, ChaCha, among others). I will be moderating the panels and my intention will be to involve the audience in the discussion as much as I can. 

It represents a terrific opportunity to really come up to speed on mobile and see all these different companies and ad platforms in one day. We’re asking: what did you do? how did it work? what did you learn? what would you change? 

If you’re in SF and not already registered — and this intrigues you — you can register here. It’s tomorrow at Mezzanine. 

Hope to see you there.

Amazing: Skype, Bebo for Sale?

I saw a couple of items this morning that really struck me. Skype and Bebo may both be for sale. The Bebo rumor is more surprising than Skype because Bebo was only acquired a year or so ago. But both illustrate something disturbing.

The big Internet companies (Google, Yahoo, AOL, Microsoft) have literally spent billions on startups and acquisitions — in many cases just to shutter them later. Lots of lucky entrepreneurs probably now own parts of Turks and Caicos as a consequence but there’s incredible waste and to some degree, I dare say, mismanagement here.

Truth be told, I wish I were sitting on millions and writing my novel on a beach too.

But there’s something quite distorted about all the money that’s changed hands without all that much thought regarding how these properties might be ultiized or integrated — or whether they’re even businesses at all.

Posts at Local Mobile Search

Over in the world of mobile . . . 

• Is This the Future of Hardware Pricing?
• Windows Mobile Sales Beat the iPhone, But . . .
• Verizon Wireless Reports Strong Quarter, No Word on Storm
• AdMob Trying to Do for Android What’s It’s Done for the iPhone
• Report: ChaCha Raising More Capital
• Netbooks, Smartphones & MIDs, Oh My!
• Storm Weakening or Gaining Strength?

GetListed Revisited

I asked David Mihm, one of the two co-founders of GetListed, to answer a few questions about the service and what he and co-founder Patrick Sexton were hoping to achieve. The following are their verbatim responses:

What motivated you to create GetListed?

Patrick and I have been helping small business owners with their online marketing for several years. It’s never been easy for them to understand how to show up in the search engines & the Local search engines have just added another level of complexity.

In talking with SMB’s, there were just too many situations where a business owner didn’t know what to do and where to go.  And the lack of awareness of what matters and what doesn’t means that small businesses are often preyed upon by companies offering small services for large prices.

So our goal was to create a resource where, at the very least, a business owner could make use of the free options available to him/her, and get an honest, objective presentation of the more advanced, and in some cases paid, options available.

Who is the target audience for this?

Very simply: small business owners.  There are certainly some features of our current tool that will be useful for SEO firms, but SMB’s themselves have been our focus from day one.

What do you hope will happen with the service?

We hope it will be considered a de facto resource for business owners interested in listing their business on search engines—a starting point for their online marketing strategy.

Do you think small business owners will use these tools?

Absolutely.  Each conference or chamber of commerce we attend/speak at, there is a growing realization among business owners that they need to be on the web, but they’re often not sure where to start.

And in the current economy, smaller companies are looking for new ways to generate business, particularly free ones.  We’re trying to help them become aware of the options that will give them the biggest bang for their buck.

How are you intending to publicize this service?

The SEO community has already helped us spread the word quickly; we’re glad that they see value in what we’re doing, and we’re grateful for the publicity.  As I said earlier, though, they aren’t our primary audience.

We plan on making direct connections with small businesses through widgets and social media, through conversations with industry leaders, and through offline trade organizations and mentorship programs such as SCORE.

Is there a revenue model?

Revenue models will exist, but they’re a low priority at the moment.  We’re interested in refining and increasing our functionality and utility, and making things as simple as possible for small business owners to use.

Patrick has great experience in this area. His other primary reference site, Feedthebot.com, aims to simplify the Google Webmaster Guidelines. It’s been live for about three years and he has yet to monetize it.

Both of us are committed to creating a valuable resource first and foremost.

You indicated that you were going to add additional directories and local sites. What are some examples of those you’re intending to add?

We’re currently developing different functions that will likely be add-ons to the current tool—a directory-checker and a data provider-checker, among others. We’ve already been contacted by a number of local portals and data providers; at this point we’re trying to reconcile functionality and value for the SMB with simplicity of presentation.

We certainly encourage anyone with a current API to contact us (ask@getlisted.org).

Now that people have seen this and are responding positively are you concerned about copycat sites or services mimicking what you’re trying to do?

Not really. Patrick in particular has a history of creating resources & has seen monetization efforts ruin a lot of sites who have mimicked him. In other words, anyone else making a tool like ours is not going to be as patient in terms of a timeline for monetization, or will turn off users by over-monetizing it. Keeping the small business owner at the top of our minds, rather than revenue, should give us an advantage over any copycats.

Is there anything else important to convey about the service or tools that I’ve failed to ask about or mention?

I think you’ve hit the biggest items. I just want to re-emphasize my comment on your earlier post that we’re not actually we’re not actually selling Local SEM to SMB’s, and in fact we list a number of firms who do provide these services on our Trusted Providers page.

In general, our goal is to be a valuable resource for small businesses, and to put small businesses themselves in control of their information on local search sites.

We’re working on a number of features “under the hood” right now & expect to release a couple of them in the next four-six weeks.

CBS Launches ‘Spot Runner for Outdoor’

That’s my description and by it I mean that a new Web-based CBS initiative called “WannaBillboard” uses templates to make outdoor advertising more accessible to regional and local advertisers. According to a write-up in MediaPost:

Some 30% of CBS Outdoor’s business comes from national advertisers and 70% on the local and regional levels. CBS Outdoor conceived the WannaBillboard concept last March, hoping to drive more local sales. But that was before the economic crisis set in, so attracting new customers could be even more important now.

This is a fascinating development and one that has all sorts of implications in my mind. It’s very much what Spot Runner initially tried to do for cable or what Ad Ready has tried to do for online display advertising or SpotMixer and Spotzer for online video: using templates and an online platform to simplify ad creation and buying. Here’s how the site describes the steps involved:

Affordable ads that target your prospects with precision–now available with FREE professional ad designs!

ELEVATE YOUR IMAGE by following these steps:

1. Select a design. CBS Outdoor’s network of talented graphic artists has done the work for you! Simply find the design that fits your business and your taste. Any design can be modified to fit the media site-type you choose.
2. Contact your local sales office. Find the nearest market to you by going to “Markets” on the left side of your screen.
3. Choose a location. Have your design reference number ready and tell a sales person that you WannaBillboard like that near your business!

Disappointingly, the site doesn’t allow you to go all the way through and create the entire outdoor ad. I would imagine this will change over time, however. 

One could add a URL, short code, call tracking number, etc. to such ads. How much you wanna bet that Google and CBS announce a deal to integrate this into AdWords in the not-too-distant future?

Internet2Go Happening This Thursday

As I said before, we conceived Internet2Go as an opportunity to educate ad agencies and media buyers about the mobile market through case studies and concrete examples of mobile marketing campaigns working today.

Our notion was to bring interested parties together in a smaller, conversational atmosphere for more exchange among the speakers and audience. But it’s an event that will also benefit those who “know that mobile is coming” but are only vaguely aware of what’s going on. (Knowing something about the iPhone doesn’t really constitute knowledge of mobile.)

While it’s generally a bad time for events (what with travel budgets the way they are and all) this is a great group of speakers and the content will be very strong. Here is the list of companies presenting and represented on the podium:

• Yahoo!,
• JumpTap
• Ad Mob
• iconmobile
• Ansible Mobile
• NearbyNow
• HipCricket
• 4Info
• Cha Cha
• Verve Wireless
• MoVoxx
• Google
• Platform-A
• Mediasmith
• Quattro Wireless
• Agent M
• LSN
• AdMob
• 1020 Placecast
• Microsoft
• Ad Infuse
• Greystripe
• Cramer-Krasselt

They’ll be discussing the full range of mobile ad strategies and platforms. Unless you’re already deeply involved in mobile marketing this will be a great way to get “smarter” about the entire landscape in one day.

While this may be prematurely self-congratulatory I think it’s going to be like one of those small concerts in a club that you hear about and say: “Damn, I wished I’d known about that.”

What’s happening in mobile is not unlike what happened online (with a few twists); it’s just developing in half the time. Mobile Internet access will overtake the “fixed line” Internet and become the primary Internet access point for many millions of people in the not-too-distant future. If you don’t start paying attention to mobile you’re going to be playing catch up.

The agenda is here. It’s at Mezzanine in San Francisco.

The IYP Network Revisited

I tried without tons of success to gain additional official information regarding the recently announced distribution agreement between AT&T’s Yellowpages.com and Superpages.

After chewing on it over for several days I’m fairly positive that this will expand beyond its announced scope to other publishers — it should. I also believe it implies sales coordination/cooperation. One of the comments to my original post said the following:

What are the chances you think they coordinate sales initiatives as well? For example, Idearc is much better at CPC ads and ATT has had much more traction in video so do you think they just swap listings and let the two continue to focus on what they do best? Also, let’s say ATT has significant sales resources in Texas and Idearc in Pennsylvania, do you think they cede the area to the other company? If they are sharing distribution and let’s say revenue share is 50/50, it may be more profitable for one partner not to enter a geographic or product area and just take the rev share on their site from the other partner’s advertiser.

These aren’t details but speculation. But I think conceptually it’s correct. It’s a big deal — provided it can be executed well by all the involved parties, which have different strengths and weaknesses — and technologies. 

Once this would arguably have been considered anti-competitive. But in the changed media landscape of 2009 that’s no longer true. 

There are many big “ifs” that surround execution and how far this might go and how many publishers might participate, but it represents an attempt to gain more control over traffic by the publishers who are paying search engines for traffic in many cases. 

In one sense this is the return of a vision that is very old. 

Round 1

Roughly a decade ago, the US publishers joined together in a yellow pages portal strategy that contemplated a destination and traffic sharing. It was effectively shut down by one non-participating publishers that believed it was anti-competitive (Bell Atlantic?). They might all wish they could turn back time now. 

What’s also interesting is this 1996 CNET article that predates the “network” strategy. Here’s the part that caught my eye:

“It’s a shame to call At Hand yellow pages,” said spokesman David Dickstein. It’s much more than that, because At Hand allows more specific searches and provides editorial content, he contended.

For instance, you could look for a French restaurant in your town and get an interactive map. If that restaurant has paid for an enhanced listing, you could also find out other information, such as whether it takes American Express or if it serves bouillabaise.

With editorial content from 14 publishers, including HarperCollins Publishers, Hearst HomeArts, New York Times Company Magazines Group and American Express Publishing, you might also find an article on French cooking.

There was clearly a broader vision here than “yellow pages” but it didn’t come to pass. Indeed, the Internet didn’t get the attention it deserved from YP publishers for years — because of the revenue differential between print and online. We all know what happened next: consumers starting using the Internet more and more and a little company called Google came along. Google’s 2008 revenues were roughly $22 billion, considerably more than all North American YP publishers combined. 

Round 2 (and 3?)

When Yellowpages.com was acquired by SBC and BellSouth (now merged as AT&T) more publishers were part of the discussion but it wound up being only the two companies — and then the one. The announcement was made at a Kelsey show that I had planned and I remember one of the European attendees saying something like this is an “opportunity for all of us.” 

This new distribution agreement represents a potential return to broader cooperation, and maybe a kind of portal strategy reborn (speculation). I think it makes sense but there’s lots of difficult work to be done.

A New SMB-Focused Ad Network

Just when you thought the Internet and display ad pricing couldn’t support any more ad networks they just seem to keep coming. However a new B2B SMB network from InflectionPointMedia is quite interesting.

The movers and shakers behind the site have lots of relevant experience in the worlds of online ad networks, behavioral targeting and small business advertising.There are layers of targeting at play in an effort to reach SMB “decision makers” at the right time — the “inflection point” in their purchase cycle.

Here’s the relevant explanatory bit from the press release:

Premier web sites such as American City Business Journals’ network of more than 60 sites, SBTV.com, and StartUpNation.com are part of the IPM network for which they earn incremental revenue in a way that does not cannibalize their existing sales efforts. Small and medium sized business owners who visit the IPM network of sites identify themselves as potential buyers through search and navigation behavior. IPM collects this anonymous data and creates vast audience segments of buyers with common interests and enables marketers to retarget them anywhere across the Revenue Science’s Targeting Marketplace.

B2B networks have existed and one can also try to reach SMBs on particlar sites or groups of sites — American City Biz Journals for example — but to my knowledge there’s been nothing like this yet. Despite the Internet pedigrees of the founding team it has to work. But if it does it could really be quite a valuable thing for SMB advertiser acquisition or anyone who wants to sell more efficiently to an SMB audience.

___

Update: I spoke briefly yesterday with Chris Hulse, CEO of IPM (formerly of Business.com). He told me there are actually two networks involved: one where businesses and SMB decision makers are identified and then a re-targeting network (via Revenue Science) where they’re shown relevant ads. He said that in the former context, users’ search behavior and query strings are part of what identifies them not merely their presence on these sites. There’s more but I start to go into the “secret sauce” realm. 

While some of the sites in the acquisition network are used by marketers to target SMBs, nobody has put together this sort of broad capability to my knowledge in terms of reaching SMBs.

Yelp CEO Pushes Back Against Recent Critiques

That’s perhaps a little strong as a description of an opinion piece in today’s San Francisco Chronicle penned by Yelp CEO Jeremy Stoppelman. In the article Stoppelman describes the inspiration for the company and then proceeds to defend against recent criticism of the site appearing in local SF media:

Yelp’s increasing influence on local commerce has led business owners (and local press) to ask: Is Yelp a good thing for small business? For those businesses that treat their customers well (the vast majority of businesses, as it turns out), the answer is yes, because Yelp offers a source of free marketing. Before Yelp, businesses could only reach new consumers through word of mouth and advertising. Word of mouth is great, but it travels slowly, reaching perhaps just a handful of friends. Traditional advertising has been very expensive; it can cost $60,000 or more for a full page ad in the Yellow Pages. And because Yelp is basically word-of-mouth online, it brings all the pros and cons of real referrals with the speed of the Web.

He also answers the suspicion and conspiracy theories that have started to crop up about how the site handles questionnable reviews. I heard some of those from callers to the public radio show I participated in recently about the now-settled defamation suit involving a review on Yelp  (Yelp wasn’t a defendant). Stoppelman explains: 

While we don’t referee factual disputes, we do try to ensure that reviews reflect a firsthand experience and don’t betray any obvious conflict of interest. We field inquiries daily from business owners and consumers alike, and we consider each one carefully. We’ve even built sophisticated, automated software to suppress suspicious reviews that might have been written by an employee, owner or competitor. As a result, most businesses will see reviews come and go from their Yelp page (whether they are a Yelp advertiser or not) as we work to ensure the site remains a trusted resource.

I’ve written a great deal about the opportunities and challenges for local businesses posed by social nets and review sites. It’s a measure of Yelp’s success that the site is gaining more critics.

If small businesses are confused about the rules, and in fairness to Yelp, it’s partly because this whole segment is evolving. Yelp is also evolving. It used to focus exclusively on consumers and now it’s turning a bit more of its attention to serving SMBs. 

However Yelp can still do a somewhat better job of helping educate them about the ins and outs of the site and how to gain the maximum benefit from being there.

___

Related: Apparently there’s another defamation suit from a Yelp posting.