Yelp Changes Its Rules, But Only Creates More Problems

Last Updated Apr 7, 2010 3:05 PM EDT

Popular customer-review Web site Yelp announced some policy changes this week intend to mollify small business owners who are suing Yelp, charging site ad managers tried to extort them to advertise in exchange for the removal of bad reviews. Unfortunately, the allegations aren't really addressed by the changes -- and the new rules are likely to cost Yelp a lot of ad revenue.

Writing on his blog, Yelp CEO Jeremy Stottelman discusses two changes:

  1. The end of Yelp's policy of allowing advertisers to pick a clearly labeled "favorite review" to put at the top of their Yelp page, over concerns it's creating confusion about whether Yelp gives advertisers special treatment. Hello, isn't that a major factor in why a business would advertise on Yelp -- so they can be cast in a more favorable light? That favorite review was a key part of the advertising package. Get ready for a big dip in paid ads on the site.
  2. Instead of letting their spam filter rid the site of suspiciously gushy praise and obvious sniping from competitors, new "transparency" efforts will allow site visitors to view everything the filter took out. This begs the question of why Yelp bothers to have a filter at all going forward. After businesses protest on this one, look for Yelp to give business owners a way for only them to see what's been filtered out about their company, instead of the whole world.
The idea is to correct "myths about Yelp" (namely that it is trying to extort ads out of business owners) and show that "displayed reviews on Yelp are completely independent of advertising -- or any sort of manipulation." Problem is, these changes don't defend in any way against the lawsuit charges, but they do open up reviewed businesses to even more embarrassment.

Instead of these moves, a level playing field would be better achieved by getting rid of Yelp's secret algorithm which more prominently features the posts of frequent reviewers over newbies, among other metrics. Unfortunately, that wasn't one of the changes made.

In another move intended to show business owners they care, Yelp is creating a Small Business Advisory Council to give them more guidance about their concerns. Yelp will have a better chance of appeasing angry business owners if the council includes those dissatisfied with how Yelp operates, and Yelp managers listen carefully to what they have to say.

Photo via Flickr user Adventures of Pam & Frank

  • Carol Tice

    Carol Tice is a longtime business reporter whose work has appeared in Entrepreneur, The Seattle Times, and Nation's Restaurant News, among others. Online sites she's written for include Allbusiness.com and Yahoo!Hotjobs. She blogs about the business of writing at Make a Living Writing.