<i>The allegations are demonstrably false, since many businesses that advertise on Yelp have both negative and positive reviews.</i><p>I don't see how that demonstrates the allegations are false. It demonstrates that there must not have been an extortion scheme that every business paid into.<p><i>Update:</i> see mustpax's comment. Yelp is making a statement about businesses which have paid them.
Yelp could do a itself a huge favor by becoming more transparent about its so-called "Review Filter." All it needs is a "show all" link somewhere on the page showing the supposedly suspicious reviews that were deleted by the filter, along with a list of reviews (maybe just the author name and/or first sentence) that were deleted by the author or by Yelp staff due to a TOS violation.<p>Yelp claims editorial is completely uninfluenced by the sales team, businesses claim otherwise. Put the data out there and let people decide for themselves.
Where there's smoke, there's fire - I think at this point Yelp is going to wind up paying out some bucks, but will likely refine their internal sales process.
The article below was sumbitted to HN a while back- rather interesting.<p>Backstory: The East Bay Express published a story criticizing Yelp and accusing them of extortion. Yelp CEO responds, criticizing the article's use of anonymous sources and general accusations. The article below is a response to the CEO's using named sources along with very specific accusations of what yelp did wrong.<p><a href="http://www.eastbayexpress.com/eastbay/yelp-extortion-allegations-stack-up/Content?oid=1176984" rel="nofollow">http://www.eastbayexpress.com/eastbay/yelp-extortion-allegat...</a><p>*this is not the same article linked to in the OPs post.
Yelp does not need to extort people to be insanely successful. It would be a pretty bad move, given that if they did actually do this, someone could:<p>a) Simply print out the email where Yelp explicitly extorted them.<p>b) Record the phone call using Google Voice or whatever, where Yelp explicitly extorted them via the phone.<p>c) Save the hardcopy of the letter or fax where Yelp mailed them the extortion offer.<p>Those are the only ways Yelp communicates. It would be trivial for one of the millions of companies in Yelp's directory to blow the whistle with concrete evidence. Yelp, an extraordinarily valuable company, would be pretty much ruined overnight. Why would they run this risk to squeeze out a few extra bucks?
I am a former Yelp Account Executive; I was one of the people that would call these businesses. I have both positive and negative feelings about Yelp. It was a short stint (November 07 to March 08) because I wasn't very good at the job as I hated the work (though the company itself is fantastic) and didn't believe in the product we were selling.<p>Account Executives (and pretty sure everyone in the sales division all the way up to the VP of Sales) had no direct way of removing reviews (and I strongly believe this has not changed). When I was there, the only way for an Account Executive to have a review removed was to email customer service and provide a solid explanation as to why it violated the review guidelines. And I can tell you that many times it wasn't easy; customer service had strict guidelines to follow and I (and my friends) had plenty of arguments that went nowhere. Theoretically, an Account executive could make friends with a customer service rep or someone on the development team and try to persuade them to remove a review, but this is highly unlikely because if found out, everyone involved would be fired (so there's a huge risk) and I can tell you from personal experience, removing a few reviews is not going to make or break a sale (so it's not worth the risk).<p>While it was a (sometimes extremely) frustrating process, I feel it speaks to how the executives of Yelp really do believe in the integrity of their review guidelines.<p>As for reviews being deleted, I can tell you that in many of those instances, the review has been put in a "purgatory" where the system waits until it receives a signal that the review is not actually spam to let it surface back up to users. This happens to both positive and negative reviews; there is no scam going on here to hide negative reviews for businesses that pay and positive reviews for businesses that don't.<p>Why isn't Yelp more transparent about this process and their algorithm? For the same reason Google isn't transparent about their algorithm - to prevent gaming the system.<p>With the frequently repeated story of business owners being told that their negative reviews will be removed, I believe it comes down to a misunderstanding of the sales pitch (the majority of the time). One of the key points of the sales pitch involved moving a positive review to the top of the review order where a positive review would stay for the duration of the contract. This was especially effective for completing a sale if there was a negative review on top ("the first review your customers see will always be a positive one"). So if a business became a Yelp advertiser, the review order would change, but only with that one review that was moved to the very top. No reviews were deleted or otherwise manipulated.<p>Why do I believe it's a misunderstanding on the business owner's part far more often than a mistaken or even purposeful effort by the Account Executive? For one, Yelp is pretty damn serious about their rep and will fire anyone caught doing this on purpose right away. Also, Yelp's training was good when I was there and has become phenomenal since I left so I don't see many mistakes happening. Finally, and I'm not going to butter this up, there are a LOT of business owners out there who don't understand the web and plenty who are just plain dumb (Just because you own a business, doesn't mean you should). the majority of businesses we called are one off restaurants/bars (just look at the majority of restaurant websites), little retail stores or one man service shops.<p>Yelp is about the customer first and businesses second; because of this, there are always going to be business owners who feel screwed. With all that said, though, I feel that this latest lawsuit speaks to a huge problem that is only going to get bigger for Yelp as it gets closer to an IPO unless they significantly change their business pitch.
I've heard they treat their reviewers pretty badly, as well. Warning: this is anecdotal and only one reviewer. He was pressured to stop writing anything negative at all about certain restaurants until he quit reviewing for them altogether. If that is how they treat volunteer reviewers, I imagine it's worse for paid staff.<p>In any case, I have enough bad feelings and stories about them to not trust anything Yelp publishes.
They have enough cash to beat out an animal hospital in a fight of attrition...<p>Worst case they blame the one sales rep (this is not yelp company policy blah blah), pay up, and promise to play nice in the future.
As a general user, I love Yelp. But I also have friends who run retail stores, and they have reported feeling violated by the Yelp process, which suddenly has a very large say in the success or failure of the business. There is no "opt-in" option for retail stores, rather, those stores have to pay to "manage" their listing. If Yelp were opt-in rather than opt-out, I suspect they would have never had a lawsuit. (I know this would change a lot of Yelp's site, though, so not sure how feasible it'd be.)
Even when they stop doing this, businesses will still get mad. They are mad that one bad employee can mistreat one customer, and the Whole Internet will hear about it (because Yelp is actually popular). The extortion claim is the only way to get Yelp into court.<p>In the end, the local businesses will lose. And I think that's a good thing; they should hire good employees and provide good customer service! I'm glad that Yelp can make some money off their indifference.
I'm curious about the law here. What is the threshold for extortion? Seems to me that despite Yelp being pretty shady, modifying the appearance of UGC on their site seems like it might not rise to the level of extortion. After all they are not writing these reviews or encouraging them in any way. We don't even necessarily know if they are deleting them or just reordering or what.
Perhaps, we should wait for Yelp to give their side of the story before hanging them a-priori. Perhaps a runaway sales account exec couldn't meet his/her targets and got cheeky.