I wish the article headline had said that the piece was by a restauranteur. Most of what they have to say about Yelp falls under the heading of "more of the same."
I think that restaurant and venue owners are wrong to hate Yelp - but it's understandable that they do. The reasons that they do are interesting. My take on it is that Yelp is disruptive to a lot of the traditional restaurant practices. Restaurant owners resent Yelp because it feels like they're adding more work to what is already a job that requires 80-hour weeks. Previously, restaurant owners had more message control about their venue's location, because social information like "is the Foo Pizzeria any good?" had more friction, it spread more slowly, and it degraded over time.
A Yelp review has low friction because it gets automatically ingested into Yelp's data set, it spreads quickly, and it doesn't degrade over time - it stays around on the site. If you're a business with a small number of reviews, it doesn't take many one-stars to make you look unappealing, and Yelp's attempts to be user-friendly mean that you're presented among a crowd of your competitors unless you earn a clickthrough. Like being on a crowded shelf at the supermarket, you're at the mercy of the visitor.
One interpretation of this would be to say that restauranteurs' reaction is "Hey! Shouldn't my success be tied to what I do, not to what a stranger on the Internet inflicts on me?" That's a reasonable objection - and that's why Yelp has invested a shit-ton of engineer-hours into filtering reviews. Filtering reviews is something that benefits both restauranteurs and users - it's just that the former tend to be ungrateful pricks about it because "filtering" includes "removing algorithmically detectable friends-and-family five-star reviews." Which leads to the other big interpretation - that restauranteurs are reacting badly to their customers' newfound ability to hold them accountable. We humans are dumb monkeys with a truckload of cognitive biases: we hate being held accountable. I look at articles like this one and I see big parallels to other whiny people who suddenly are brought into accountability and are resisting it.
The thing is that the restauranteurs, like the MPAA or the newspaper industry, cannot win this one in the long term (at least not on the terms that they now use to define "winning"). There's no way to keep people from talking about your business. There's no way to keep people from talking about the things they enjoy. There's no way to keep people from taking the easy way - "I feel like pizza, I'll look it up on Yelp" - instead of a harder way - "I feel like pizza, let's see which of my friends knows where the pizzerias are around here, which of them are available, what their phone numbers and/or locations are, or I know, I could go get the huge inconvenient yellow pages and make a choice based on how much they spent on advertising!" Computing devices will get more convenient to use, not less, knowledge will get easier to share, not less, and the cost of querying the Internet's collective opinion will be cheaper, not more expensive. The restaurant and venue owners are never, ever going to win this the way they want to - again like the MPAA and newspapers, the cat is entirely out of the bag.
Basically what I think they should do about it is
* Stop whining
* Read Seth Godin
* Compete instead of sue
As an aside, I've found Yelp very useful over time with the addition of a few mental filters.
* Judge places by the review histogram, not by individual reviews
* Trust the collective opinion far more than individual reviews, especially for places with 100+ reviews
* Assume that anything at 3.5 stars or above is Good Enough, and use other sources when you want to have rarefied tastes catered to (Yelp started out as being mostly for foodies - I think it's moved out of that, and that if you are or desire to become a serious foodie, you should release yourself from caring about Yelp)
So you try to think of all kinds of speculative reasons why restauranteurs hate yelp, but do not bother listening to what they say. Restauranteurs are very clear and vocal about why they hate yelp -- it is because Yelp uses reviews as a way to blackmail them into buying advertisements in Yelp. That is pretty fucked up behaviour and has been confirmed by many people many times.
By the way most restaurants have always relied on customer satisfaction to attract customers. This is true for most small businesses but it especially true for small restaurants. And this was true before yelp and even before the internet. A restaurant where each customer goes only once is usually doomed to failure (the exceptions are places in tourist traps and high traffic locations ... these restaurants are usually reliably awful, but they are the minority).
If you are the usual non-franchise non-tourist trap restaurant, you cannot afford much advertising or promotion. Your best hope for customers is someone wandering in, being happy and coming back again. Or maybe even telling their friends.
So the idea that restauranteurs now hate yelp because yelp somehow forces them to up their game is silly. Most of them have always relied on customer satisfaction as their main driver of business.
"Restauranteurs are very clear and vocal about why they hate yelp -- it is because Yelp uses reviews as a way to blackmail them into buying advertisements in Yelp. That is pretty fucked up behaviour and has been confirmed by many people many times."
No, it's been alleged many times -- by unreliable sources. It's never been shown to be true, and in fact, the allegations that have made it to court have been dismissed for lack of evidence:
That said, it's pretty disturbing if this part is true:
Over the past year, I have attempted to get some clarity
and assistance from Yelp. I have had no success except
that its sales staff has repeatedly advised that if
we would only advertise with them, they could "help us."
In order for a site like Yelp to be trustworthy, its editorial and advertising people need to be totally separate.
Have any of the lawsuits made it through the courts?
All I can find is this the dismissal of Levitt v Yelp where the Court, while "sympathetic to the ethical underpinnings of Plaintiff's argument" rules that editorial "immunity still applies regardless of whether the publisher acts in good faith", noting that "traditional editorial functions often include subjective judgments informed by political and financial considerations" [1].
The problem with Restaurant owners hating yelp, is they are yelp's customers. They need to figure out a better way to monetize their business, because selling ads to the people who loathe them probably won't work for long.
I have a local business, and while we have great overall reviews, we have had MANY reviews filtered out by yelp's super-secret algorithms that are from actual customers. We also have a bad review that is by someone that has never visited our business, but is not filtered - despite our contacting yelp several times. All this is fine, overall we have great reviews - the problem is yelp has been contacting us weekly to run ads with them. Why would we run ads to bring people to a page that doesn't represent our business accurately?
Furthermore, the cost per impression/clicks is ridiculously high compared with the industry standards.
That being said, from the consumer perspective, I appreciate and frequently use yelp. ...I think they provide a valuable service, they just need to implement a better monetization method before I would consider investing.
That right there: bingo - that's why I think that Yelp is coming out on top of this. They're delivering value to the website visitors/app users. Not that either company is a paragon of virtue, but compare Yelp to Apple and yourself to an iOS app developer and I suspect you'll have an accurate picture of who's where on the totem pole (cf Gruber: http://daringfireball.net/2010/05/nack_control ).
If Yelp were dedicated to making its advertisers happy, it would quickly become useless for its users.
I'm not saying they don't provide a valuable service. I'm saying they won't be able to exist without making a profit, and angering the people you're trying to get to write checks is a poor way to go about growing your business. There definitely has to be separation between the advertising and reviews - because validity of reviews is top priority, but their system, from my first hand experience, and discussions with many other businesses owners is skewed too far in one direction at the present time.
They are bleeding money, and they're forecast to do so for the near future. Bottom line is they need to figure out a better way to make money off what they do, or improve their value proposition for those customers who are generating the revenue.
Why is it wrong for restaurant owners to hate Yelp if they are constantly running into roadblocks when trying to ask for transparency on how they filter the reviews and the only way that Yelp can help is if the owners are willing to pay for Yelp's services? It nothing short of extortion.
They're wrong not only for the reasons that I listed at the end of the post (the factors that make Yelp and Yelpalike business work, are not going their way) but also because they keep asking for the impossible. Yelp can't give venue owners the transparency they're asking for, because that means also giving them the information that they'd need to game the system. It's the same reason that Google only speaks in broad terms about its search updates: after a certain point, the information that you need to see to prove that the system is fair, is the exact same information that you need to see in order to exploit the system. So neither Google nor Yelp shows it, and I'm fine with that.
It's hard to argue with the systematic dismissal of highly rated reviews for non-advertising entities and the dismissal of low rated reviews for advertising entities. Just because it hasn't been proven in court there are more than enough stories about the extortion business model they run. I am sure they will get their day eventually. It's hard to prove when it's all under a mysterious guise, but just wait until they get a whistleblower, wikileaks or something similar.
It's funny because many years ago I read comments from people saying, "Yelp cannot last."
Then a few years after that, "It's a fad and it will die."
The a couple years after that, "When people catch on, they'll disappear!"
And, now, on the day that they went public, there are people still harping that Yelp's days are numbered.
Really? Remember they used to say that about Google (and still say they about Facebook).
Yelp is a reality that will _not_ go away. Venues have to adjust to the modern day reality that it's easy for people to share information. As you said, "There's no way to keep people from talking about the things they enjoy."
If Yelp did disappear, it wouldn't be because people "wised" up or because of some court order. But if they did, there are plenty to take its place. Facebook, Foursquare, or any other social media website that supports ratings of venues.
You paint restauranteurs' dislike for Yelp as fear of customer feedback, but I think their complaint is that Yelp has a secret (and seemingly extortionist) process for filtering positive or negative reviews depending on whether the restauranteur pays Yelp.
You make an interesting observation about reviews not degrading over time. That would seem like something that benefit both Yelp and the places that are reviewed - Yelp's review averages would be fresher, and venues that may have greatly improved over time in response to low initial reviews would be rewarded with stronger-weighted recent reviews.
Yeah, I added a bit of a qualifier there to try to make it clear that I was talking about how humans read reviews - for all I know, Yelp reviews do algorithmically get less important over time. That'd be a smart thing to do.
I think that restaurant and venue owners are wrong to hate Yelp - but it's understandable that they do. The reasons that they do are interesting. My take on it is that Yelp is disruptive to a lot of the traditional restaurant practices. Restaurant owners resent Yelp because it feels like they're adding more work to what is already a job that requires 80-hour weeks. Previously, restaurant owners had more message control about their venue's location, because social information like "is the Foo Pizzeria any good?" had more friction, it spread more slowly, and it degraded over time.
A Yelp review has low friction because it gets automatically ingested into Yelp's data set, it spreads quickly, and it doesn't degrade over time - it stays around on the site. If you're a business with a small number of reviews, it doesn't take many one-stars to make you look unappealing, and Yelp's attempts to be user-friendly mean that you're presented among a crowd of your competitors unless you earn a clickthrough. Like being on a crowded shelf at the supermarket, you're at the mercy of the visitor.
One interpretation of this would be to say that restauranteurs' reaction is "Hey! Shouldn't my success be tied to what I do, not to what a stranger on the Internet inflicts on me?" That's a reasonable objection - and that's why Yelp has invested a shit-ton of engineer-hours into filtering reviews. Filtering reviews is something that benefits both restauranteurs and users - it's just that the former tend to be ungrateful pricks about it because "filtering" includes "removing algorithmically detectable friends-and-family five-star reviews." Which leads to the other big interpretation - that restauranteurs are reacting badly to their customers' newfound ability to hold them accountable. We humans are dumb monkeys with a truckload of cognitive biases: we hate being held accountable. I look at articles like this one and I see big parallels to other whiny people who suddenly are brought into accountability and are resisting it.
The thing is that the restauranteurs, like the MPAA or the newspaper industry, cannot win this one in the long term (at least not on the terms that they now use to define "winning"). There's no way to keep people from talking about your business. There's no way to keep people from talking about the things they enjoy. There's no way to keep people from taking the easy way - "I feel like pizza, I'll look it up on Yelp" - instead of a harder way - "I feel like pizza, let's see which of my friends knows where the pizzerias are around here, which of them are available, what their phone numbers and/or locations are, or I know, I could go get the huge inconvenient yellow pages and make a choice based on how much they spent on advertising!" Computing devices will get more convenient to use, not less, knowledge will get easier to share, not less, and the cost of querying the Internet's collective opinion will be cheaper, not more expensive. The restaurant and venue owners are never, ever going to win this the way they want to - again like the MPAA and newspapers, the cat is entirely out of the bag.
Basically what I think they should do about it is
* Stop whining
* Read Seth Godin
* Compete instead of sue
As an aside, I've found Yelp very useful over time with the addition of a few mental filters.
* Judge places by the review histogram, not by individual reviews
* Trust the collective opinion far more than individual reviews, especially for places with 100+ reviews
* Assume that anything at 3.5 stars or above is Good Enough, and use other sources when you want to have rarefied tastes catered to (Yelp started out as being mostly for foodies - I think it's moved out of that, and that if you are or desire to become a serious foodie, you should release yourself from caring about Yelp)