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Yelp
Yelp
is an American multinational corporation headquartered in San Francisco, California. It develops, hosts and markets Yelp.com and the Yelp
Yelp
mobile app, which publish crowd-sourced reviews about local businesses, as well as the online reservation service Yelp Reservations. The company also trains small businesses in how to respond to reviews, hosts social events for reviewers, and provides data about businesses, including health inspection scores. Yelp
Yelp
was founded in 2004 by former PayPal
PayPal
employees Russel Simmons and Jeremy Stoppelman. Yelp
Yelp
grew quickly and raised several rounds of funding. By 2010 it had $30 million in revenues and the website had published more than 4.5 million crowd-sourced reviews. From 2009 to 2012, Yelp
Yelp
expanded throughout Europe
Europe
and Asia. In 2009 it entered several negotiations with Google
Google
for a potential acquisition. Yelp became a public company in March 2012 and became profitable for the first time two years later. As of 2016, Yelp.com has 135 million monthly visitors and 95 million reviews. The company's revenues come from businesses advertising. According to BusinessWeek, Yelp
Yelp
has a complicated relationship with small businesses.[3] Criticism of Yelp
Yelp
focuses on the legitimacy of reviews, public statements of Yelp
Yelp
manipulating and blocking reviews in order to increase ad spending, as well as concerns regarding the privacy of reviewers.

Contents

1 Company history (2004–2016)

1.1 Origins (2004–2009) 1.2 Private company (2009–2012) 1.3 Public entity (2012–present)

2 Features

2.1 Features for businesses

3 Relationship with businesses

3.1 Astroturfing 3.2 Alleged manipulation by Yelp

4 Community 5 See also 6 References 7 External links

Company history (2004–2016)[edit] Origins (2004–2009)[edit]

Jeremy Stoppelman, co-founder and CEO of Yelp

Two former PayPal
PayPal
employees, Jeremy Stoppelman
Jeremy Stoppelman
and Russel Simmons, founded Yelp
Yelp
at a business incubator, MRL Ventures, in 2004.[4][5] Stoppelman and Simmons conceived the initial idea for Yelp
Yelp
as an email-based referral network, after Stoppelman caught the flu[6] and had a difficult time finding an online recommendation for a local doctor.[5][7][8] The co-founders' former colleague from PayPal
PayPal
and founder of MRL Ventures, Max Levchin, provided $1 million in initial funding.[5] MRL co-founder David Galbraith, who instigated the local services project based on user reviews, came up with the name "Yelp".[9] In an interview published in February 2013,[10] Stoppelman explained why they decided on "Yelp" for the company's name, stating that "it was short, memorable, easy to spell, and was familiar with 'the help' and 'yellow pages'".[11] According to Fortune Magazine, Yelp's initial email-based system was "convoluted".[5] The idea was rejected by investors and did not attract users beyond the cofounders' friends and family.[12] Usage data showed that users were not answering requests for referrals, but were using the "Real Reviews" feature, which allowed them to write reviews unsolicited.[5] According to the San Francisco Chronicle, "the site's popularity soared" after it was re-designed in late 2005.[13] Yelp
Yelp
raised $5 million in funding in 2005 from Bessemer Ventures and $10 million in November 2006 from Benchmark Capital.[5] The number of reviewers on the site grew from 12,000 in 2005, to 100,000 in 2006.[12] By the summer of 2006, the site had one million monthly visitors.[12] It raised $15 million in funding from DAG Ventures in February 2008.[14][15] In 2010, Elevation Partners
Elevation Partners
invested $100 million; $75 million was spent on purchasing equity from employees and investors, while $25 million was invested in sales staff and expansion.[16] Yelp
Yelp
grew from six million monthly visitors in 2007 to 16.5 million in 2008 and from 12 to 24 cities during the same time period. By 2009, the site had 4.5 million reviews.[17] By 2010, Yelp's revenues were estimated to be $30 million and it employed 300 people.[12] Private company (2009–2012)[edit] Yelp
Yelp
introduced a site for the United Kingdom in January 2009[18] and one for Canada that August.[17] The first non-English Yelp
Yelp
site was introduced in France in 2010; users had the option to read and write content in French or English.[19] From 2010 to 2011, Yelp
Yelp
launched several more sites, in Austria, Germany, Spain and the Netherlands. International website traffic doubled during the same time period.[20] An Australian website went live in November 2011.[4] It was supported through a partnership with Telstra, which provided one million initial business listings,[21] and was initially glitchy.[22] Yelp
Yelp
had a presence in 20 countries by the end of 2012, including Turkey[23] and Denmark.[24] Yelp's first site in Asia
Asia
was introduced in September 2012 in Singapore,[6] which was followed by Japan in 2014.[25] In December 2009, Google
Google
entered into negotiations with Yelp
Yelp
to acquire the company,[26][27] but the two parties failed to reach an agreement.[28][29] According to The New York Times, Google
Google
offered more than $500 million, but the deal fell through after Yahoo
Yahoo
offered $1 billion.[30] Tech Crunch
Tech Crunch
reported that Google
Google
refused to match Yahoo's offer. Both offers were later abandoned following a disagreement between Yelp's management and board of directors about the offers.[31] In June 2015, Yelp
Yelp
published a study alleging Google was altering search results to benefit its own online services.[32][33] Yelp
Yelp
began a service called Yelp
Yelp
Deals in April 2011,[34] but by August it cut back on Deals due to increased competition and market saturation.[35] That September, the Federal Trade Commission investigated Yelp's allegations that Google
Google
was using Yelp
Yelp
web content without authorization and that Google's search engine algorithms favored Google
Google
Places over similar services provided by Yelp.[36][37] In a January 2014 agreement, Google
Google
was not subject to anti-trust litigation from the FTC, but did have to allow services like Yelp
Yelp
the ability to opt out of having their data scraped and used on Google's websites.[38] Public entity (2012–present)[edit]

The 140 New Montgomery
140 New Montgomery
building in San Francisco, home of Yelp's headquarters

Having filed for an initial public offering (IPO) with the Securities Exchange Commission in November 2011,[39][40] Yelp's stock began public trading on the New York Stock Exchange
New York Stock Exchange
on March 2, 2012. At a share price of $15, the company was valued at $898 million.[41][42] In 2012, Yelp
Yelp
agreed to acquire its largest European rival, Qype, for $50 million.[6] The following year, CEO Jeremy Stoppelman
Jeremy Stoppelman
reduced his salary to $1.[43] Yelp
Yelp
acquired the start-up online reservation company SeatMe
SeatMe
for $12.7 million in cash and company stock in 2013.[44][45][46] Yelp's second quarter 2013 revenue of $55 million "exceeded expectations", but the company was not yet profitable.[47] In 2012/13, Yelp
Yelp
moved into its new corporate headquarters, occupying nearly 150,000 square feet on 12 floors of 140 New Montgomery
140 New Montgomery
(the former PacBell building) in San Francisco.[48] The company was profitable for the first time in the second quarter of 2014, as a result of increasing ad spending by business owners and possibly from changes in Google's local search algorithm.[49] It is dubbed as Google
Google
Pigeon, which helped authoritative local directory sites like Yelp
Yelp
and TripAdvisor, in getting more visibility.[50] Over the course of the year, Yelp
Yelp
websites were launched in Mexico, Japan and Argentina.[51] Also in 2014, Yelp
Yelp
expanded in Europe
Europe
through the acquisitions of German-based restaurant review site Restaurant-Kritik and French-based CityVox.[52][53] In early February 2015 Yelp
Yelp
announced it was buying Eat24, an online food-ordering service, for $134 million.[54][55] Then in August 2017, Yelp
Yelp
sold Eat24 to Grubhub
Grubhub
for $287.5 million.[56] The acquisition resulted in a partnership to integrate Grubhub
Grubhub
delivery into the Yelp profiles of restaurants.[57] In late 2015, a "Public Services & Government" section was introduced to Yelp
Yelp
and the General Services Administration
General Services Administration
began encouraging government agencies to create and monitor official government pages.[58] For example, the Transportation Security Administration created official TSA Yelp
Yelp
pages.[59][60] Later that year Yelp
Yelp
began experimenting in San Francisco with consumer alerts that were added to pages about restaurants with poor hygiene scores in government inspections.[61] Research conducted by the Boston Children's Hospital found that Yelp
Yelp
reviews with keywords associated with food poisoning correlates strongly with poor hygiene at the restaurant. Researchers at Columbia University
Columbia University
used data from Yelp
Yelp
to identify three previously unreported restaurant-related food poisoning outbreaks.[62] In 2016, Yelp
Yelp
invested in Nowait, an app that allows users to see how long they would have to wait at a restaurant that does not accept reservations, as well as put their names on the waitlist without being physically present at a restaurant. When their table is ready, users get a text message. Customers can also text back to say they’re running late, and restaurants can decide whether or not to hold the table for them.[63] On November 2, 2016, concurrent with its earnings report for Q3 2016, Yelp
Yelp
announced it would drastically scale back its operations outside North America and halt international expansion. This resulted in the termination of essentially all international employees across Yelp's 30+ international markets from the sales, marketing, public relations, business outreach, and government relations departments. Overseas employees now primarily consist of engineering and product management staff. Yelp
Yelp
claims these layoffs affected only 175 individuals, or 4 percent of its total workforce.[64] In April, 2017, Yelp
Yelp
announced that it had acquired Wi-Fi marketing company Turnstyle Analytics for $20 million.[65] In May, 2017 Yelp's stocks dropped by 30% following disappointing sales.[66] Features[edit]

Yelp.com

Screenshot

The homepage of Yelp's iPhone app.

Type of site

Local online reviews

Available in 15 languages[67]

Owner Yelp, Inc.

Website yelp.com

Alexa rank 291 global, 55 in the United States
United States
(February 2017[update])[68]

Commercial Yes

Registration Optional

Users 142 million unique visitors per month

Launched 2004; 14 years ago (2004)

Current status Online

Written in Python, Java and a custom framework

Yelp's website, Yelp.com, is a crowd-sourced local business review and social networking site.[5] Its user community is primarily active in major metropolitan areas.[12] The site has pages devoted to individual locations, such as restaurants or schools, where Yelp
Yelp
users can submit a review of their products or services[70] using a one to five star rating system.[12] Businesses can also update contact information, hours and other basic listing information or add special deals.[12][17] In addition to writing reviews, users can react to reviews, plan events or discuss their personal lives.[5] According to Sterling Market Intelligence, Yelp
Yelp
is "one of the most important sites on the Internet."[24] As of Q2 2016 it has 168 million monthly unique visitors and 108 million reviews.[71] 78 percent of businesses listed on the site have a rating of three stars or better,[72] but some negative reviews are very personal or extreme.[12] Many reviews are written in an entertaining or creative manner.[13] Users can give a review a "thumbs-up" if it is "useful, funny or cool."[73] Each day a "Review of the Day" is determined based on a vote by users.[74] As of June 2016, 72 percent of Yelp
Yelp
searches are done from a mobile device.[72] The Yelp
Yelp
iPhone app was introduced in December 2008.[75] In August 2009, Yelp
Yelp
released an update to the iPhone app with a hidden Easter Egg augmented reality feature called Monocle, which allowed users looking through their iPhone camera to see Yelp
Yelp
data on businesses seen through the camera.[76] Check-in features were added in 2010.[77][78] Yelp
Yelp
users can make restaurant reservations in Yelp
Yelp
through Yelp Reservations, a feature originally added in June 2010.[79][80] Yelp's reservation features were initially done through a 2010 partnership with OpenTable,[81] but Yelp
Yelp
became increasingly competitive with OpenTable after Yelp's 2013 acquisition of SeatMe, resulting in the end of the partnership in April 2015.[82] SeatMe
SeatMe
was reworked into the current " Yelp
Yelp
Reservations" feature.[83] In 2013, features to have food ordered and delivered were added to Yelp[84] as well as the ability to view hygiene inspection scores[85] and make appointments at spas.[86] Yelp's content was integrated into the mapping and directions app of Apple's September 2012 release of iOS 6.[87] Yelp also has features for finding local businesses offering special deals to Yelp
Yelp
users.[88] In March 2014, Yelp
Yelp
added features for ordering and scheduling manicures, flowers, golf and legal consultations, among other things, through Yelp.[89] In October 2014, the company, working in collaboration with hotel search site Hipmunk, added features to book hotels through Yelp.[86] Yelp
Yelp
started a 7-10% cash back program at some US restaurants in 2016 through partnership with Empyr.[90][91] On February 14, 2017, Yelp
Yelp
launched a Yelp
Yelp
Questions and Answers, new feature that allows the users to ask venue specific questions related to businesses.[92] It allows users to upvote and downvote the answers on the basis of helpfulness.[93] Features for businesses[edit] Yelp
Yelp
added the ability for business owners to respond to reviews in 2008.[12][94] Businesses can respond privately by messaging the reviewer or publicly on their profile page. In some cases, Yelp
Yelp
users that had a bad experience have updated their reviews more favorably due to the businesses' efforts to make it right. In other cases disputes between reviewers and business owners have led to harassment and physical altercations.[12] The system has led to criticisms that business owners can bribe reviewers with free food or discounts to increase their rating, though Yelp
Yelp
users say this rarely occurs.[74] A business owner can "claim" a profile, which allows them to respond to reviews and see traffic reports.[12] Businesses can also offer discounts to Yelp
Yelp
users that visit often using the "check in" feature.[77][78] In 2014, Yelp
Yelp
released an app for business owners to respond to reviews and manage their profiles from a mobile device.[95] Business owners can also flag a review to be removed, if the review violates Yelp's content guidelines.[96] Yelp's revenues primarily come from selling ads and sponsored listings to small businesses.[8][12] Advertisers can pay to have their listing appear at the top of search results, or feature ads on the pages of their competitors.[12][17][94] As of 2016, advertising revenue was growing at a rate of 30% year over year.[97] Yelp
Yelp
will only allow businesses with at least a three-star rating to sign up for advertising.[13] Originally a sponsored "favorite review" could place a positive review above negative ones,[12] but Yelp
Yelp
stopped offering this option in 2010 in an effort to deter misconceptions that advertisers were able to marginalize negative reviews for pay.[98][99] Relationship with businesses[edit] A Harvard Business School
Harvard Business School
study published in 2011 found that each "star" in a Yelp
Yelp
rating affected the business owner's sales by 5–9 percent.[100][101] A 2012 study by two Berkeley economists found that an increase from 3.5 to 4 stars on Yelp
Yelp
resulted in a 19 percent increase in the chances of the restaurant being booked during peak hours.[102] A 2014 survey of 300 small business owners done by Yodle found that 78 percent were concerned about negative reviews. Also, 43 percent of respondents said they felt online reviews were unfair, because there is no verification that the review is written by a legitimate customer.[101] Astroturfing[edit] As Yelp
Yelp
became more influential, the practice of fake reviews written by competitors or business owners became more prevalent.[73] A study from Harvard professor Michael Luca analyzed 316,415 reviews in Boston and found that fake reviews rose from 6% of the site's reviews in 2006 to 20% in 2014.[100] Yelp's own review filter identifies 25% of reviews as suspicious.[103] Yelp
Yelp
has a proprietary algorithm that attempts to evaluate whether a review is authentic and filters out reviews that it believes are not based on a patron's actual personal experiences, as required by the site's Terms of Use.[12][104] The review filter was first developed two weeks after the site was founded and the company saw their "first obviously fake reviews."[103] Filtered reviews are moved into a special area and not counted towards the businesses' star-rating.[103] The filter sometimes filters legitimate reviews, leading to complaints from business owners.[73] New York Attorney General Eric T. Schneiderman said Yelp
Yelp
has "the most aggressive" astroturfing filter out of the crowd-sourced websites it looked into.[103] Yelp
Yelp
has also been criticized for not disclosing how the filter works,[103] which it says would reveal information on how to outsmart it.[12] Yelp
Yelp
also conducts "sting operations" to uncover businesses writing their own reviews.[105] In October 2012, Yelp
Yelp
placed a 90-day "consumer alert" on 150 business listings believed to have paid for reviews. The alert read "We caught someone red-handed trying to buy reviews for this business".[106][107][108] In June 2013, Yelp
Yelp
filed a lawsuit against BuyYelpReview/AdBlaze for allegedly writing fake reviews for pay.[109][110] In 2013 Yelp
Yelp
sued a lawyer it alleged was part of a group of law firms that exchanged Yelp
Yelp
reviews, saying that many of the firm's reviews originated from their own office. The lawyer said Yelp
Yelp
was trying to get revenge for his own legal disputes and activism against Yelp.[3] An effort to win dismissal of the case was denied in December 2014.[111] In September 2013, Yelp
Yelp
cooperated with Operation Clean Turf, a sting operation by the New York Attorney General that uncovered 19 astroturfing operations.[103] In April 2017, a Norfolk, Massachusetts jury awarded a jewelry store over $34,000 after it determined that its competitor's employee had filed a false negative Yelp
Yelp
review that knowingly caused emotional distress.[112] Alleged manipulation by Yelp[edit] According to BusinessWeek, Yelp
Yelp
has "always had a complicated relationship with small businesses."[3] Throughout much of Yelp's history there have been allegations that Yelp
Yelp
has manipulated their website's reviews based on participation in its advertising programs.[113] Many business owners say Yelp
Yelp
salespeople offered to remove or suppress negative reviews if they purchase advertising.[73] Others report seeing negative reviews featured prominently and positive reviews buried; soon after, they would receive calls from Yelp
Yelp
attempting to sell paid advertising.[114] Yelp
Yelp
says its sales staff do not have the ability to modify reviews and that changes in the reviews are caused by its automated filter.[70][115] Several lawsuits have been filed against Yelp
Yelp
accusing it of extorting businesses into buying advertising products. Each have been dismissed by a judge before reaching trial.[73] In early 2010, a class-action lawsuit was filed against Yelp
Yelp
alleging it asked a Long Beach veterinary hospital to pay $300 a month for advertising services that included the suppression or deletion of disparaging customer reviews.[116] The following month, nine additional businesses joined the class-action lawsuit,[117] and two similar lawsuits were filed.[118] That May the lawsuits were combined into one class-action lawsuit,[119] which was dismissed by San Francisco U.S. District Judge Edward Chen in 2011. Chen said the reviews were protected by the Communications Decency Act of 1996 and that there was no evidence of manipulation by Yelp.[120] The plaintiffs filed an appeal.[121] In September 2014 the Ninth U.S. Circuit Court of Appeals upheld the dismissal, finding that even if Yelp
Yelp
did manipulate reviews to favor advertisers, this would not fall under the court's legal definition of extortion.[122][123][124] In August 2013, Yelp
Yelp
launched a series of town hall style meetings in 22 major American cities in an effort to address concerns among local business owners. Many attendees expressed frustrations with Yelp's automated filter removing positive reviews after they decline to advertise, receiving reviews from users that never entered the establishment, and other issues.[121][125] A 2011 Harvard study by Michael Luca found that there was no significant statistical correlation between being a Yelp
Yelp
advertiser and having more favorable reviews.[101][126] The Federal Trade Commission
Federal Trade Commission
received 2,046 complaints about Yelp
Yelp
from 2008 to 2014,[101] most from small businesses regarding allegedly unfair or fake reviews or negative reviews that appear after declining to advertise.[127] According to Yelp, the Federal Trade Commission
Federal Trade Commission
finished a second examination of Yelp's practices in 2015 and in both cases did not pursue an action against the company.[128][129] Journalist David Lazarus
David Lazarus
of the Los Angeles Times
Los Angeles Times
also criticized Yelp in 2014 for the practice of selling competitors' ads to run on top of business listings and then offering to have the ads removed as part of a paid feature.[130] In 2015, San Francisco filmmaker Kaylie Milliken was reportedly producing a documentary film titled Billion Dollar Bully about Yelp's alleged business practices.[131] Community[edit] According to Inc. Magazine most reviewers (sometimes called "Yelpers"[13]) are "well-intentioned" and write reviews in order to express themselves, improve their writing, or to be creative. In some cases, they write reviews in order to lash out at corporate interests or businesses they dislike.[12] Reviewers may also be motivated by badges and honors, such as being the first to review a new location,[13] or by praise and attention from other users.[94] Many reviews are written in an entertaining or creative manner.[13] Some users post reviews as a matter of protest or support of the business's political views; Yelp
Yelp
attempts to filter these.[132] Users can give a review a "thumbs-up" if it is "useful, funny or cool."[73] Each day a "Review of the Day" is determined based on a vote by users.[74] According to The Discourse of Online Consumer Reviews many Yelp reviewers are internet-savvy adults aged 18–25 or "suburban baby boomers".[133] Reviewers are encouraged to use real names and photos.[133] Each year members of the Yelp
Yelp
community are invited or self-nominated to the " Yelp
Yelp
Elite Squad" and some are accepted based on an evaluation of their reviews.[134][135] Users must also use their real name and photo on Yelp
Yelp
to qualify for the Elite Squad.[74] They are governed by a council and estimated to have several thousand members. Yelp
Yelp
does not disclose how the Yelp
Yelp
Elite are selected.[13][134] Elite Squad members are given different color badges based on how long they've been an elite member.[135] The Yelp
Yelp
Elite Squad originated with parties Yelp began throwing for members in 2005,[135] and in 2006 it was formally codified;[134] the name came from a joking reference to prolific reviewers that were invited to Yelp
Yelp
parties as the " Yelp
Yelp
Elite Squad."[5][12] Members are invited to special opening parties, given gifts, and receive other perks.[5][135]. As of 2017, there are over 80 local Elite Squads in North America.[134] Yelp
Yelp
receives about six subpoenas a month asking for the names of anonymous reviewers, mostly from business owners seeking litigation against those writing negative reviews.[101] In 2012 the Alexandria Circuit Court and the Virginia Court of Appeals[136] held Yelp
Yelp
in contempt for refusing to disclose the identities of seven reviewers that anonymously criticized a carpet-cleaning business; in 2014 Yelp appealed to the Virginia Supreme Court.[127][137] Six internet companies and the Electronic Frontier Foundation
Electronic Frontier Foundation
said a ruling against Yelp
Yelp
would negatively affect free speech online. The judge from an early ruling said that if the reviewers did not actually use the businesses' services, their communications would be false claims not protected by free speech laws.[138] In 2014, a California state law was enacted that prohibits businesses from using "disparagement clauses" in their contracts or terms of use that allow them to sue or fine customers that write negatively about them online.[139][140] As of 2017, Yelp
Yelp
employed a staff of over 80 community managers that organize parties for prolific reviewers, send encouraging messages to reviewers and host classes for small business owners.[12] Yelp reviewers are not required to disclose their identity, but Yelp encourages them to do so.[5]. See also[edit]

Companies portal

Crowdsourcing Reputation management "You're Not Yelping"

References[edit]

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Yelp
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Yelp
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