Yelp combines local reviews and social networking functionality to create a local online community. Adding social web functionality to user reviews creates a de-facto reputation system, whereby site visitors can see which contributing users are the most popular, respected, and prolific, how long each has been a member, and which have interests similar to theirs. Strong peer feedback mechanisms and the featured placement of popular reviews on the site and in local newsletters help motivate contributors. Yelp also applies a “First to Review” reward system to create a competition among contributing members, further motivating the creation of reviews and adding to the site’s business coverage.

The company strengthens the online community through off-line events at nightclubs, bars, restaurants, and cultural venues in various cities for its most prolific and loyal contributors, named “Elite” members on the site. These members must provide a photo and their real name, and in return receive a special indicator on their personalized page for every year they author a specific number of reviews. The concept is meant to indicate that the user is a trusted author of business reviews.

The site also has a forum for online socialization and to discuss local businesses and events.

A number of competitors emulating these Yelp concepts have failed or were acquired.

Content

The Yelp sites have listings for businesses throughout the United States and Canada and accept reviews of any business or service. Listings vary widely in nature with the site including listings for storefronts such as restaurants and shops; service businesses such as doctors, hotels, and cultural venues; and non-business locations such as schools, museums, parks, and churches.

San Francisco, the home city, remains the most active as of 2008, with significant adoption in 18 metro areas including Boston, Chicago, New York, Washington, D.C., San Diego, and Los Angeles. San Francisco usage has earned the site over 4000 reviewed restaurant listings, some with 100s of reviews each. The site boasts of having over 2.3 million reviews overall as of February 2008. Reviews trend 85% positive as estimated by the CEO and are thought to come primarily from the 26-35yo demographic.

API

Yelp released a free REST- and JSON-based application programming interface (API) in August 2007. The API provides access to business listing details, reviews, photos, and ratings and can be used to add business information to a website, widget, or mobile application. The API has been used to integrate business reviews into existing Google Maps applications such as on Zillow.com and HotelMapSearch.com.

Facebook Beacon integration

In December 2007 Yelp implemented Facebook Beacon. Changes to the site privacy policy were made to accommodate this feature, which experienced some negative press at the time.

Advertising program

Businesses may advertise with Yelp for preferred search result placement and extra listing features. For the advertising fee, the business may include an individualized message and photo slide show onto the web page for its listing as well as receive reports on listing traffic. Additionally, these advertisers, called “Sponsors” on the site, are allowed to highlight a specific review and communicate with reviewers.

Criticism

As with many review sites, Yelp has been criticized over the fairness of negative reviews on the site. Some business owners have even posted “No Yelpers” signs in frustration. Yelp defends its practices and states that it will not censor user comments, although it does remove favorable reviews that are considered “suspicious”. Criticism has also been levied by business owners who believe that the ordering of reviews is controlled and used to pressure businesses into advertising, with salespersons suggesting negative reviews can be placed last for a fee. Yelp rejects these charges and believes there is possibly confusion around the highlighted review offering.

Other Information

• Founded October 2004
• Headquarters San Francisco, CA
• Key people Jeremy Stoppelman, Co-founder/CEO, Russel Simmons, Co-founder/CTO, and Geoff Donaker COO
• Industry Business ratings and reviews
• Products Yelp.com
• Employees 150+
• Website www.yelp.com
• Crunchies 2008 winner