Yelp CEO Responds to Lawsuit

Yelp CEO Jeremy Stoppelman has drafted a blog post that responds to the allegations in the class action lawsuit filed earlier in the week:

There has been a long history of people accusing Yelp of monkeying around with reviews in exchange for money. The allegations are disappointing, not only because they are false, but because they ignore empirical evidence in favor of conspiracy theories.

You can see for yourself: thousands of businesses that advertise on Yelp have both negative and positive reviews. Despite these counterexamples to the contrary (virtually no advertiser on Yelp has a perfect reputation), extensive media explorations that end inconclusively, and the absence of any actual evidence to support this theory, this unfortunate and untrue meme has taken on a life of its own.

He goes on to deny there’s any merit to the suit . . .

Separately Yelp has replaced Yahoo! on the Ask the Local Search Engines panel (also featuring Google and Microsoft) at next week’s SMX West show in Santa Clara. I’ll be moderating the panel and look forward to a very interesting and satisfying discussion.

16 Responses to “Yelp CEO Responds to Lawsuit”

  1. Mike Stewart Says:

    Is it 100% possible to detect?

    Every single day my co-workers in Sales at SuperMedia or Verizon/Idearc Yellow Pages went out to meet business owners they as well as others in the industry were well known for filling clients and prospective clients full of partial truths and statistics that were stretched and skewed in order to “make a sale”.

    I was one of the few who reached out to learn the real stats as well as true value proposition for local. I understand industry fragmentation, but do you really think Mr. Stoppleman knows what all the paid/commissioned sales consultants are saying to clients?

    This reminds me of my argument with SuperMedia and others. It is challenging to manage sales from a product perspective.

    Honesty does not get you investors or naked short sellers! lol

    That is my .02….

    Cheers,
    Mike Stewart
    Dallas Google Search Marketing Consultant

  2. john andrews Says:

    I saw a small business get a sales email from yelp recently. They responded that they didn’t trust yelp based on all of the reports of funny business with Yelp reviews.

    At the time of that not-very-friendly reply to the Yelp sales team, I looked at their Yelp results: 1 negative and 1 positive. The positive one was lengthy and from an experienced Yelper. The negative one was non-specific, short, and basically grumpy, as opposed to specifically negative.

    Within days the positive review (the one from the experienced Yelper) was gone. The grumpy negative one remains.

    The funniest part is.. the business has been closed for some time. That’s why the owner didn’t care… it didn’t matter. There could not be any new reviews, because there could not be any current customers.

    So Yelp’s CEO can deny all he likes and try and cite statistics, but it is the real world fact that will take him and his arrogance down with Yelp’s reputation. Whether or not he tells his sales team to post fake reviews or manipulate what shows in local listings, or if they or Yelpers do it to meet performance goals, or if it is just coincidence that small businesses get their reviews manipulated (in their favor if they pay Yelp, against them if they don’t respect Yelp) at the same time Yelp focuses sales pressures on them, just doesn’t matter.

    What matters is that Yelp appears to be a scam, and small businesses cannot afford to trust Yelp. When the CEO acknowledges this and starts to actually work to fix the problem, he will deserve respect for his comments.

  3. Greg Sterling Says:

    The issue is how widespread any misrepresentation or manipulation was/is. If it’s isolated and based on overzealous salespeople that’s one thing. If there’s a corporate-level policy or strategy or sales training materials that contain these tactics that’s something quite different.

    The facts will come out in the litigation because the plaintiffs will be forced to produce them to avoid summary judgment in this case. So we’ll eventually know for sure.

  4. DC Says:

    I wonder if Yelp has ever terminated the employment of a rogue sales rep. who used un-sanctioned sales tactics like these. Evidence of them taking specific action to remove those rogue agents could help their case as well, could it not?

  5. DC Says:

    But, there is also always a kind of wink – wink, do whatever it takes to meet your qouta policy which is hard to root out. Wonder if the plaintiffs could dig up any disgrunteld ex-yelpers who could confirm that kind of unwritten policy was in place.

    There could be several sales reps from yelp who lost their job for not meeting production expectations, who may have been disgruntled about that because, ‘I did it the honest way and got canned, while so and so cheated his way to awards and bigger bobnuses.”

  6. DC Says:

    A bobnuse probably wouldnt be strong enough motivation to make someone cheat, but a bonus might.

  7. Jason Says:

    If the issue is how widespread the manipulation is, well then I think we’ll see that the result of this situation is going to favor the plaintiffs. Maybe not the actual result of the court case, but the impact on the brand and site itself. This case has surely got to unravel some shortcomings in the site, right?

    It seems like almost every Search Marketer/Former Yelper/Business Owner has a factual story about an extortion-like scheme or tactic of Yelp. How is Stoppelman about to say that everyone of these cases is a part of a larger conspiracy theory?

    Wow… Stoppelman’s response is truly disappointing and is completely indicative of a drop out. I’m sure they teach accountability and CSR at HBS, but maybe only in the second year. It seems like he is so caught up in how great Yelp is, he has forgotten about the real world. Forgotten about the fact that sentiment is important, and that an Internet company’s demise can happen quickly.

    Maybe all this controversy is the result of an issue in their algorithm, who knows?

  8. coldbrew Says:

    john andrews: Your anecdote is cute and easily documented with a screenshot. But, you making the claim that it happened to a bunch of people that don’t know you is meaningless with out evidence.

    Pics or GTFO.

    • john andrews Says:

      @coldbrew you can take your own advice (GTFO) thanks.

      Check your reading comprehension. My post reports one specific instance (which I witnessed myself) and notes the core problem with Yelp’s CEO — he doesn’t appear to respect his marketplace nor his customers.

      I’ll pass on sharing “pics” with you, although I’d be a very aggressive participant in any legal matter involving me (as always). Anyone skeptical of my witness account can pass it over — there are so many others out there to choose from, and most are still open businesses with more relevant stories than mine. Mine was simply funny — showing how ridiculous it was to get such a sales contact from Yelp.

      Mostly I find it remarkable that Yelp’s CEO chooses to prompt comment streams like these over fixing the problem or even appearing to care. I wouldn’t be surprised if the “passing up Google’s offer” was really Google passing on the Yelp “opportunity”, given the apparent behavior of the Yelp staff and CEO.

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  10. Nicholas Says:

    It’d be simple for corporate to not allow ‘rogue salesmen’ to do this. Simply don’t give them access to hide reviews or change the order of reviews. Then they couldn’t do the things that people accuse them of doing. There seem to be too many instances of this out there (where there’s smoke there’s fire) and it’s been known by yelp execs for long enough now that they would have put in measures to prevent this if it wasn’t the corporate policy. Obviously he has to deny it, but his denial isn’t very convincing. The facts should come out eventually, though, and if Yelp is doing this, their brand could quickly tarnish beyond repair and yelp will be another extinct internet company.

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  12. tory Says:

    Of course a CEO will never tell anybody to do anything illegal or immoral but when your business model has a big conflict of interest, no one should be surprised at the action of “some” of the Yelp’s sales reps. Picture the sales call. Mr. advertiser, you should advertiser on Yelp. Why should I, I got a bunch of negative reviews. Well, maybe that’s why you need to advertise because we might be able to do something about it. Wink wink, nudge nudge. Say no more.

  13. Mike Stewart Says:

    Take a look at Wendy’s article from MediaPost:

    http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=124594

  14. Peter Rudd Says:

    So what was the outcome of the Lawsuit ?

  15. Greg Sterling Says:

    i dont know and I haven’t followed up with yelp about it.

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