YELP

Yelp was founded in 2004 and is headquartered in San Francisco, California. It is primarily recognized as a crowd-sourced review web and mobile application service. Other services provided by the company include an online reservation system, an online food-delivery service, and training tools for small businesses. The site does not require user fees and instead relies on business advertising for revenues.

History

Yelp was founded in October 2004 by Pussel Simmons and Jeremy Stoppelman, two former employees of PayPal. The idea was conceived when Jeremy Stoppelman caught the flu and noticed a lack of online tools for service recommendations while attempting to find a doctor online. The website was launched with the aid of a $1 million from Max Levin, Paypal's founder, through MRL Ventures, a San Francisco entrepreneurship that provides grants and advice to startup companies.

The first review was posted by Katherine W. on October 12, 2014. Katherine awarded Truly Mediterranean with four stars and the comment "dirt cheap, good falafels." By 2007, the site reached 1 million reviews and by May 2008 the site was attracting 10 million unique viewers every month. In 2009, Yelp expanded to the U.K. and Canada followed by the first non-English release of the website. By 2013, Yelp had a presence in 21 countries.

Website Services

Yelp offers services to customers as well as business owners.

Information Services

Registered users, also known as "yelpers", write reviews and use five-star ranking systems for local restaurants and businesses. Viewers can search for top-rated venues using categories such as "Food", "Nightlife", "Health & Medical", and "Shopping" within a specific location. The reviews allow users to make comments and post photos of their experiences to benefit other users when comparing local businesses. Dedicated yelpers compete for site awards and badges by posting high-quality reviews, receiving votes for useful, funny, and cool reviews, or being the first to review a business. The "Talk" portion of the website is a discussion forum that allows users to post questions and make comments. Mobile users can also order food through the app.

Yelp Services

Local businesses can claim a page on Yelp through the website. Yelp pages allow businesses to connect to their local community and advertise their services. Members can also use SeatMe, an online reservation system to help to manage their business.

The Yelp for Business Owners app allows users to track visitor engagement, customer leads, and clicks. It also allows owners to respond to reviews with a personal message to the reviewer or public comment as well as respond to customer inquiries. Owners can update the community on information about their business such as hours and menu changes via the website.

Ethical Implications

Sorting Reviews

The order in which reviews are presented to site users is critical to businesses, as most users only look at the first few reviews. The automatic filtering out of reviews that are considered untrustworthy or believed to be written by a competitor on Yelp has caused dissent in some yelpers. While denied by Yelp, allegations that the site is biased toward paying advertisers have been made. While this was disputed by a study, Yelp's business model continues to present a potential conflict of interest in providing reliable, user-generated reviews while receiving its revenues from the businesses being reviewed.

False Reviews

In 2011, an investigation by the New York Office of the Attorney General resulted in 19 companies paying fines between $2500 and $100,000 for posting fake online reviews. This behavior was likely motivated by the financial benefits of having a good Yelp page. A study from Harard Buisness School in 2011 estimated that a one-star rating increase on Yelp resulted in to a revenue increase of 5%-9%.