The Power of Yelp: Small Businesses Feel Joys, Pains of Yelp Reviews

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“The reason consumers, 138 million of them, come to our site each month is because they trust the content,” said Vince Sollitto, the vice president of corporate communications for Yelp. “The reason they trust the content is because we take steps to protect them from being misled from reviews that are either been purchased by business or might be bias because they were solicited from a business owner’s friends or families.”

And Yelp regulators say fake online reviews are a real problem. Yelp recently helped New York’s Attorney General with a year-long undercover investigation dubbed “operation clean turf.” The authorities busted 19 companies who were writing phony reviews or commissioning people to write them. The companies were ordered to pay more than $350,000 in penalties.

Some business owners also claim that purchasing ads on Yelp will improve their business’ ranking or circulate more positive reviews. Just this week, a class action lawsuit was filed on behalf of some Yelp shareholders alleging that Yelp was doing just that.

Yelp says they have not been served with that suit but said the allegations were “without merit” and will be vigorous contested.

Sollitto also said that claims that Yelp is skewing results in favor of business owners who purchase ads on their site are “absolutely not” true.

“Businesses purchase advertising on Yelp, but nothing more,” he said. “Our recommendation software is designed to protect consumers and we treat advertisers and non-advertisers equally.”

In the wake of the bad review backlash at the Union Street Guest House, Barry Butterfield said “a firestorm” has erupted and that businesses are more aware than ever that “all the money and power is on the side of Yelp.”

The Union Street Guest House declined to comment to “Nightline,” but earlier this week, the owner posted a statement on the inn’s Facebook page saying, "The policy regarding wedding fines was put on our site as a tongue-in-cheek response to a wedding many years ago. It was meant to be taken down long ago and certainly was never enforced."

But contrary to what some business owners might think, Yelp says negative reviews are the exception, not the rule.

“I think that the biggest misconception about Yelp is that it’s a site where people go to complain or whine, in fact, 80 percent of all the reviews on Yelp or so, are three stars or more,” Sollitto said. “And that’s because most people’s experiences with small businesses are positive. And that’s really what comes through on Yelp.”

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