| Type | Private |
|---|---|
| Industry | Business ratings and reviews |
| Founded | October 2004 |
| Headquarters | San Francisco, CA, U.S. |
| Key people | Jeremy Stoppelman, Co-founder/CEO, Russel Simmons, Co-founder/CTO, and Geoff Donaker, COO |
| Products | Yelp.com |
| Revenue | US$30 million (2009 est.)[1] |
| Employees | 150+[2] |
| Website | yelp.com |
Yelp, Inc. is a company that operates yelp.com, a social networking, user review, and local search web site. Yelp.com has more than 54 million monthly unique visitors as of late 2010.[3][4]
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Yelp was one of three projects, including Adzaar and Slide, to come out of the San Francisco incubator, MRL Ventures. The project arose out of research into the local services market by David Galbraith, who worked with Jeremy Stoppelman on the early stages of the project.[5] Stoppelman and Russel Simmons, both of whom were early software engineering employees at PayPal,[6] spun the service off as a separate company. After an aborted start as an email recommendation service,[7] Yelp launched its namesake web site into the San Francisco market in October 2004.[8] The company received $6 million in early funding from venture capital firms Mission Street, led by another former Paypal-er Max Levchin, and Bessemer Venture Partners. Additional investments were made by Benchmark Capital, DAG Ventures, and a private Investor from Laguna Beach, who invested $3 million, $3 million, and $5 million respectively.[9][10] Yelp expanded from its San Francisco roots to open an east coast office in Manhattan[11] in the first half of 2008 and by introducing a Canadian-focused version of the site in 2008.[12] Yelp now has international sites in Spain, France, Germany, Austria, the United Kingdom, the Netherlands and Australia.[13][14][15] As of 2008, Yelp's page view count overtook its predecessor and early rival, Citysearch.[2][16] Revenues were approximately US$30 million for 2009, with $50 million to be expected in 2010.[1]
On December 17, 2009, TechCrunch reported that Yelp was in advanced negotiations with Google to buy the company for more than $500 million.[1][17] By December 21, the same source was reporting that Yelp's CEO had rejected the Google offer.[18] Yelp has been identified as a possible candidate for an IPO by 2013.[19]
In November 2011, Yelp filed with the SEC to raise up to $100 million in an initial public offering.[20]
The site currently has more than 61 million monthly unique visitors across 13 countries.
Yelp provides online local search capabilities for its visitors. A typical search includes what the user is seeking (e.g. a barber shop) and the location from which the search is to be performed, entered as a specific address, neighborhood, city/state combination, or zip code. Each business listing result contains a 5-point rating, reviews from other site visitors, and details such as the business address, hours, accessibility, and parking. Site visitors can aid in keeping the business listings up to date, with moderator approval, and business owners can directly update their own business' listing information.[21]
Listings and related content are organized by city and a multi-tier categorization system. Content and listings can also be discovered through categorized reviews or via Yelp member profiles and their review lists. Maps leveraging Google Maps show reviewed businesses to further aid in business discovery.
Information can be accessed by web or mobile browsers.
Yelp combines local reviews and social networking functionality to create a local online community.[22][23] Adding social web functionality to user reviews creates a 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.[24] Peer feedback mechanisms, and placement of popular reviews on the site and in local market Yelp newsletters help motivate contributors.[25] Business owners can also communicate with contributers who post reviews on their page via messages or public comments.[26] Yelp also has 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.[7][27] These members must provide a photo and their real name, be at least of legal drinking age, and not own a local business. In return these members receive a special badge on their personalized page for every year they author a specific number of reviews or contribute to the improvement of the online community. The concept is meant to indicate that the user is a trusted author of business reviews.[28] To gain Elite status, it is often helpful to be nominated by other Elite users but recognition is bestowed when one writes useful, funny or cool reviews so members can vote on those reviews.[29]
The site also has a forum for online socialization and to discuss local businesses and events.[30]
A number of competitors emulating these Yelp concepts have failed or were acquired.[21][31][32]
The Yelp sites have listings for businesses throughout the United States and Canada and accept reviews of any business or service.[6] 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.[33]
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.[2] San Francisco usage has earned the site over 4000 reviewed restaurant listings, some with hundreds of reviews each.[2] The site boasts of having over 2.3 million reviews overall as of February 2008.[10] Reviews trend 85% positive as estimated by the CEO[23] and are thought to come primarily from the 26-35yo demographic.[30]
Yelp released a free REST- and JSON-based application programming interface (API) in August 2007.[21] 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.[34] The API has been used to integrate business reviews into existing Google Maps applications such as on Zillow.com.
In December 2007 Yelp implemented Facebook Beacon. Changes to the site privacy policy were made to accommodate this feature, which experienced negative press at the time.[35]
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, video and photo slide show onto the web page for its listing as well as receive reports on listing traffic.[36]
Yelp has taken measures to prevent false check-ins by service users at their advertising clients' business locations.[37]
Yelp has been criticized over the fairness of negative reviews on the site. A competitor can easily write an anonymous, negative review. Yelp states that it will not censor reviews, but will remove suspicious reviews.[38] The Oakland, California based East Bay Express published a 2009 story highlighting businesses that said that Yelp salespeople offered "to hide negative customer reviews of their businesses" by paying for advertising sponsorship contracts. The story claims that positive reviews appeared to be removed when the business declined to become an advertiser, a practice Yelp denies.[39][40]
Several lawsuits have been filed by business owners against reviewers. On November 3, 2009, a Yelp user was confronted by the owner of a bookstore in San Francisco at his home. The user had posted a review criticizing the store and received a string of angry messages towards him, which he revealed through screenshots. The user called the police, who arrested the bookstore owner, and obtained a restraining order.[41][42]
In February, 2010, two law firms filed a class action lawsuit accusing Yelp of "extortion" on behalf of a veterinary hospital in Long Beach, California that made similar claims.[43] Partially in response to these allegations and in a move to increase transparency, Yelp now shows which reviews get filtered by its filtering algorithm.[3]
Another form of illegitimate review concerns people who have never visited an establishment. In July 2010, American chef Graham Elliot's sandwich shop Grahamwich had already received a negative one-star-review from a user complaining that the not-yet-opened restaurant had ruined his "pleasant walk". Elliot commented that this made him "question the legitimacy of the reviews involving businesses that are in actual operation."[44] Elliot also said he had been "kicked off Yelp three times for responding to reviews that were just plain factually wrong."[45]
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