Are “Lazy” Reviewers Behind Yelp’s Alleged Extortionist Scheming?

In recent weeks, three class action lawsuit have sprung up around the user-generated reviews site Yelp, whose sales reps are being accused of trying to strong-arm small businesses into advertising at the site. Not doing so, say these businesses, caused positive user reviews to get buried under piles of less flattering critiques, if not to disappear entirely.

CEO Jeremy Stoppelman told the New York Times this past weekend that all the suits are baseless, explaining that:

The way Yelp works is very counterintuitive to a lot of folks, which is the source of the problem. In 2005, we created a review filter. It’s automated and algorithmic and screens out certain reviews that it just doesn’t know enough about. When a consumer encounters a business’s page, the reviews they’re seeing aren’t necessarily every review that’s been written about the business. It’s a selection of those reviews. It ensures that the consumer sees generally useful, trustworthy information that gives them a good idea of what to expect when they patronize that business.

When asked by the Times: “How does the filter determine whether a review is trustworthy?” Stoppelman said:

We’re looking at a variety of factors, collecting all sorts of data on the users that have contributed reviews. I really can’t be very specific. The more that we explain about the algorithm, the less effective it becomes.

Tonight, Henry Blodget of Business Insider suggests the problem isn’t Yelp’s algorithm so much as one specific promise it makes to small businesses that advertise at the site: that they can highlight one review, that is clearly marked as that business’s favorite review.

Using a screen shot of a company that is a Yelp advertiser, Blodget points out that the advertiser’s “favorite” review is so detailed and lengthy (and seemingly professionally written) that determined readers have to scroll and scroll to find the next review of that particular business. Blodget concludes that the practice falls short of extortion but that it’s “potentially powerful and misleading advertising, because it carries the appearance of being an objective review,” when sometimes, it may not be.

Blodget may well be right. Yet Yelp’s algorithm may be as questionable, at least, judging by a comment made following a recent Q&A with Stoppelman at Businessweek’s site. Indeed, when Stoppelman says that Yelp “screens out certain reviews that it just doesn’t know enough about,” he may be saying that it screens out reviews by people who take the time to review a business but who — because they aren’t as active on Yelp as other users — don’t receive the same real estate. 

Does Yelp assign less value to people who post infrequently? If it does, it may not be criminal, but it would certainly make the site less credible to me. Says commenter “Joe”:

I have been a Yelp advertiser for years. And during that time, I have learned how to properly interact with the Yelp community. My business has been attacked by rival businesses posting fake reviews, and a few people have tried to write disparaging reviews that had no merit. Did Yelp offer to take them down for a fee? I wish!!!! I would be first in line, cash in hand. However, that was never the case. Do reviews disappear? All the time, unfortunately. If a user is new, does not post a photo and is not active, I notice within a week or two their review disappears. When I get new reviews, I always send a thank you to the user. If they have no photo and just one review, I encourage them to get active to ensure their opinion is heard. Suits like this are brought on by people who do not understand and seem to be too lazy to take the time to understand the community and the way things work…