Inside Yelp's "Blackmail" Lawsuit: CEO Stoppelman Seems to Hate His Advertisers

Last Updated Feb 25, 2010 2:31 PM EST

Ever wonder why reviews on Yelp always seem so positive, and why every business seems to get four out of five stars? A California veterinarian claims it's because Yelp blackmails business owners into advertising on its site with the promise of removing or hiding negative reviews.

The lawsuit highlights the strange attitude of Yelp CEO Jeremy Stoppelman, who seems to dislike the advertisers who pay him up to $50 million a year to be on his site.

Gregory Perrault, a Long Beach vet, claims he received a couple of negative reviews on the site from disgruntled customers and soon afterward got a series of "frequent, high-pressure" calls from Yelp ad sales staff who promised to remove the offending reviews if he bought advertising. Yelp wanted a $300-a-month commitment for a year:

Yelp has been cruising for a bruising on this issue for more than a year. In February 2009 the East Bay Express found nine San Francisco-area business owners who claim they were subjected to "blackmail" requests for advertising, along with the promise of nixing bad comments.

Back in March 2009, CEO Stoppelman said that Yelp refuses to verify inaccurate reviews, but that it does allow advertisers to manipulate which reviews appear at the top of their pages:

"We can't referee factual disputes," responded Mr. Stoppelman. "Why believe the business owner who has skin in the game?"

"Business owners want to control their reputation, and we're just not going to let that happen," he said. His top priority is "to make sure the community is protected and can share without fear of being publicly spat on."

The people he's protecting from being "spat on" are his commenters, not his advertisers. Can you name any other executive who runs an advertising business who would describe his own customers as people who cannot be believed?

The problem here is that Stoppelman seems to be think that just because he's running a series of anonymous comment boards that somehow he is immune to the usual laws of defamation and libel. Or that the cure for defamation is, somehow, advertising.

Sooner or later he's going to find out that he's wrong.

Related: