According to a new blog post by Yelp CEO Jeremy Stoppelman, another suit, “virtually identical” to the earlier “class action,” has been filed against the company:
These misconceptions are also fueled by lawyers, who may have heard about Yelp’s recent financing round and may be seeking a share. So it’s no surprise that today another lawyer has filed a virtually identical lawsuit making the same inaccurate claims. (Don’t worry; they’re still not true.)
These copy cat suits get filed in what is known as a “race to the courthouse,” where lawyers jockey to be named the lead lawyer of the case and take the biggest share of legal fees; being among the first to file a suit increases the chance of being put in charge of the case.
The new case, also an intended class action, apparently involves the disappearance of reviews that the plaintiff had solicited from customers. The plaintiff claims these reviews were deleted in retaliation for not purchasing advertising on Yelp.
Yelp doesn’t like the practice and tends to view solicited reviews as bogus and thus often “suppresses” them, as Yelp’s Dylan Swift explained on the Ask the Local Engines panel at SMX West. But businesses sometimes get upset and angry about this (as indicated by the lawsuit), not understanding Yelp’s policy or how its algorithm works.
The lawyers, looking for what they may believe is a relatively easy settlement and/or PR, smell blood in the water. And there’s probably also no shortage of would-be plaintiffs: SMBs frustrated with or ignorant about how Yelp works.
There’s an irony in that these attorneys are likely soliciting plaintiffs in the same way that some of the local businesses have solicited reviews from their customers.
In all seriousness, Yelp is fighting against a rising tide of advice that argues “get your customers to write positive reviews” (to rank better). AlikeList, for example, is encouraging SMBs to ask customers to “like” or list them on the site. But lots of local SEOs argue in favor of review solicitation. In a way you can’t blame them; it’s a way for the business to try and have some control over the UGC phenomenon.
Yelp wants reviews to be “organic” but a host of SMB advice givers is now preaching review solicitation. It’s a tough battle Yelp is fighting.
Screenwerk 
March 4, 2010 at 11:08 pm
Why don’t they (the attorneys) spend the time going after something more concrete? Like how about:
http://dallasgoogleguru.wordpress.com/2009/12/03/idearc-exec-resigns-allegations-of-fraud/ ??
Meanwhile, I will continue to laugh about how ridiculous our legal system is and the vast amount sleazy corporate law suits towards the digital marketing environment.
Review solicitation is the only method to generate the reviews necessary to combat the review ranking factor and competitors taking advantage of such.
Crazy world. Can’t wait for discussions of privacy.
Or how about the fact that Hedge Funds and Venture Capitalists are making the early money via financing on the largest wealth creation movement of the 21st century? Only when they go public can common folks invest in these start-ups and great ideas! Meanwhile CEOs, Funds, and VC’s make all the money! Reminds me of the dot com bubble all over again!
Cheers.
March 4, 2010 at 11:09 pm
Hey Greg… btw, I love the shark! Your supportive graphic image choices are very creative!
March 4, 2010 at 11:14 pm
Thanks Mike.
March 4, 2010 at 11:16 pm
Greg, as you know, I am one of the local SEO’s who encourages review solicitation. I certainly don’t condone paying people for reviews, but the fact is most businesses have PLENTY of satisfied customers who simply don’t know that reviewing that business online will help it rank better and get more customers. To expect a little sticker in the window saying ‘check us out on Yelp’ or ‘We’re a favorite place on Google Maps’ to communicate that to an average customer (certainly outside the Bay Area or Seattle) is unrealistic to say the least.
Mikko Ollila’s answer to the review question the other day was the right one, in my view–if the search engines feel that reviews are starting to be incentivized or manipulated to such a point where they can’t be trusted, they will simply de-value reviews in their algorithms. They’ll move into signals that are harder to “game” like foursquare checkins and twitter activity. The line continues to blur even there, though, as businesses get savvy and create contests around check-ins, mayorships, or twitter referrals. I don’t think we’re nearly there but I also think it’s going to be much harder to spot review spam than in other forms of web content.
Yelp’s is at a big disadvantage in comparison to Google and Bing, though, because THEIR algorithm relies SO heavily (exclusively?) on reviews.
March 4, 2010 at 11:22 pm
As we discussed on the panel it’s a vast gray area. Certainly I understand the motivation. The quid pro quo that Kevin Lee described is clearly on the unethical side, but the “if you liked my service . . .” reminder is understandable.
As I said, Yelp’s policy is running up against an emerging culture in which reviews are important and people want satisfied customers to write them.
March 4, 2010 at 11:26 pm
What are your thought on “rewarding” for reviews fellas?
March 4, 2010 at 11:28 pm
No problem re loyalty programs for most loyal customers or for “evangelists” (although Yelp might not like). But as a prior incentive . . . that’s where the problems occur.
March 4, 2010 at 11:33 pm
To add to the gray area: Greg, not sure if you attended the Facebook panels yesterday but Tony Wright pointed out that contests run by businesses to recruit more fans to their fan pages do NOT violate FB’s ToS. Facebook’s own rep said he didn’t know the ToS to the letter, but was inclined to think those sorts of contests would be fine as well. Each platform is going to continue to adopt its own guidelines, confusing business owners even more…
March 4, 2010 at 11:36 pm
Yes . . . if all these other folks are making it ok to offer perks, rewards, incentives to their customers it will get very confusing.
March 4, 2010 at 11:37 pm
So prior incentive is what classifies a typical review solicitation as FRAUD? Yet the reward to a previous client for offering a review is an acceptable practice.
I have to say, I have always felt that YELP was the most ethical. Mostly due to the fact that it has very few if any “feet on the street.” The sales component is when the waters get murky. Yelp, like Google, has had the least amount of outside sales consultants influencing reviews.
March 4, 2010 at 11:38 pm
David, thanks for the insight on Facebook. I will be sure to ask about his discovery at the next http://www.DFWSEM.org meeting. Cheers!
March 5, 2010 at 12:03 am
No Mike:
I’m saying that if there’s an exchange of value for the purpose of obtaining the review that’s a problem. Write the review and you’ll get X. But rewarding loyal customers in general is OK I believe.
March 5, 2010 at 12:37 am
So what about rewarding loyal customers after a review for the review? Not a problem. Rewarding to review, big problem. So it has to take place without falsehood, prior notification to reviewer of a potential reward for reviews, anything resembling “paying for a review” is considered acceptable? Very grey indeed. Whether the payment or incentive for the review is pre or post instruction, as long as payment took place it is considered “review fraud”
Just as policing social media in corporate America….. (such as Media Sales Organizations)….. Attempting to police what reviews had the wrong influence or are fraud will also be a challenge.
If only click fraud was not also this challenging, us marketers would have much more understanding of ethical “whitehat” guidelines.
My last response. Thanks for feeding the bears for a moment fellas!
I will continue to read your insightful responses quietly!
March 5, 2010 at 12:56 am
Look, businesses shouldn’t get friends and family to write their reviews, nor should they force it upon customers. But simply asking a customer to write a review? That’s not too bad. The customer still needs to take it upon himself or herself to do it, and they should definitely write based on real experiences and true feelings. I love Yelp. But I also think there is a religious separation between customer and business owner that it preaches for its site, despite the fact that this separation doesn’t exist in real life. There’s room for both sides to let up a bit.
March 5, 2010 at 3:01 am
Letting reviews accumulate 100% organically, as Yelp would like to see, is inherently flawed due to normal human behavior. Upset customers tend to vent reviews publicly at a MUCH higher rate than satisfied customers do. In a world before online reviews business owners would get random letters and thank you notes from time to time from happy customers. You see them get posted on bulletin boards in the store, or on the wall behind cash register. But how many just as happy customers don’t bother? But one unhappy, and unsatisfied, customer will jump at the opportunity to state their grievances in a public manner.
Yelp has created, I’d even say encouraged, a culture of flamboyant negative reviews as entertainment. Being able to rate, and tag as funny or cool, other peoples reviews, coupled with the fact that they discourage positive reviews that might have been solicited in one manner or another, skewing the numbers towards the negative reviews, makes writing epic negative reviews a bit of a sport for many regular Yelp users.
Since most people won’t up and write a positive review out of the blue it then becomes important for business owners to try to encourage customers to do so as a means to actually get a more reasonable representation of customer sentiment. And yes, it’s ripe for abuse.
Perhaps over time as more people use online reviews and more get into the habit of posting them on their favorite websites, we may then see more positive un-solicited reviews being posted. But we are years away from that and it will still not reflect reality in terms of actual ratio of positive to negative customer sentiment.
David is right that search engines will devalue the weight of reviews as part of ranking algorithms. I think Google may already have turned that dial down a bit in Maps, turning up other factors to compensate. And those factors are now starting to get abused by the more aggressive spammers.
March 5, 2010 at 5:14 am
What is the pulse on a major directory offering incentives in exchange for reviews:
http://www.semreportcard.com/win-10000-just-for-posting-a-local-business-review/
March 5, 2010 at 2:40 pm
Lots of publishers have offered incentives for consumer reviews. They do tend to diminish quality in many cases because people will often do a perfunctory job just to attain the incentive.
March 6, 2010 at 12:06 pm
Surely these lawsuits are why Google walked away from Yelp? Somebody there realized they were about to pay $500 million to acquire a Toyota-grade/Tiger Woods PR disaster. Who in their right mind is going to buy this toxic, ticking time bomb?
If Google had bought Yelp, the mainstream, big media would have re-publicized and amplified all the negativity about Yelp, questioning Google’s motives, and causing enormous damage to Google’s reputation for accuracy and objectivity in search results.
All those poor mom ‘n’ pops complaining about Yelp’s continuing protection racket will make for great reading – and everybody wants to see Google stumble.
And the more bad press Yelp gets. (the lawyers will relentlessly publicize these class action suits over the next few months), the less Google will want Yelp results coming up high on Google SERPS.
Even the unbearably smug Yelp “Elite” reviewers are now complaining that their reviews are being manipulated, or deleted, to suit Yelp’s revenue strategy.
BTW. Yelp has plenty of feet on the street. They have at least 100 thugs in San Francisco alone, and recently announced that they hiring 200 more to be deployed in major markets. A client of mine got the full shakedown earlier this week (A negative review will disappear if he signs an ad contract. Not stated explicitly, of course)
March 6, 2010 at 1:49 pm
The lawsuits were after the end of the Google negotiation. Google bought YouTube and knew it was buying a major lawsuit with Verizon.
I don’t think the pending litigation or any adverse PR will have any impact on Yelp’s SEO standing in Google.
Re your claim about Yelp Elite complaints, can you point to something that show it?