Yelp’s Challenges on Display in NYT Comments

One of the comments responding to my earlier Yelp piece, about the company’s efforts to do a better job explaining its algorithm, said the following:

Unfortunately, you didn’t put the link to the NYT article which shows readers’ “comments”. There are now 64 comments from businesses all over the country. 95% of which say they were extorted, and cite specifics. 

That prompted me to go and take a look at the comments, responding to the NY Times article Q&A with Yelp CEO Jeremy Stoppelman.  I typically never pay attention to comments on a news story. I wasn’t trying to hide anything; I simply didn’t think to look for them. 

While the quote above sees conclusive evidence of extortion, I do not see that. I see confusion, frustration and resentment among some business owners. There are comments in support of Yelp and how it empowers the consumer. But I’ve selected a few critical comments to illustrate some of the frustration and confusion:

There’s an irony here: many of the “reviews” of Yelp appended to the NYT article are from anonymous readers. Nonetheless, what the comments above and others in response to the article show is that Yelp has an aggressive sales force. That is overlaid on top of SMB perceptions that reviews are manipulated according to whether a business is an advertiser. Indeed, reviews and review placement is “manipulated” to a limited degree. Here are the ways:

• Yelp allows advertisers to select a “favorite review” to place at the top of the page (thus “manipulating” reviews)
• Yelp removes the “you might also consider” suggestion of a competing business that would otherwise appear (for those who advertise; again contributing to a perception of “manipulation”)

The practices above are not uncommon or unique to Yelp. As one example, Google on its Place Pages shows “nearby places you might like,” which includes competitive businesses. 

But when you add all this to the fact that Yelp’s algorithm removes positive reviews in circumstances where the reviewers are suspect (i.e., they don’t have a track record on Yelp) you get a kind of perfect storm of frustration and confusion among some SMBs. That is now being expressed in these lawsuits in the form of “extortion” accusations. 

I can see how the aggressiveness of sales people and these other factors fuel a perception of “extortion.” However I believe the litigation will ultimately be unsuccessful as a legal matter.

The larger and more significant problem is the potential damage to Yelp’s reputation among SMBs and would-be advertisers who see many of their negative “suspicions” confirmed by the lawsuits. That’s the real challenge the site now faces.