Yelp: A savior for consumers, but some businesses feel burned

Apr 4, 2014

A Yelp sticker on the window of a business. ; Credit: Steve Rhodes via Flickr Creative Commons

Many consumers love Yelp reviews to get the inside scoop on everything from restaurants to dry cleaners and dentists. But does the website play fair with small businesses?

An investigation by the Los Angeles Times has turned up an ad-selling practice that seems to be a lot like extortion. When a local jewelry store owner canceled his Yelp ad, he had a representative from Yelp call him up to say that competitor’s ads had been appearing above his listing and that — for a fee — the company could make the ads go away. It’s a controversial practice that is leading to questions about how the company does business.

About 83 percent of the online review company’s nearly $71 million in revenue in the most recent quarter came from local ads.

The alleged strong-arm tactics are coupled with concerns that the company is planting fake bad reviews to retaliate against businesses that don’t shell out money for ads.

The Virginia Supreme Court is hearing a case this month brought by a small carpet cleaner who argues that Yelp posted fake negative reviews about his company after he turned down a pitch to buy ads.

Are some of Yelp’s bad reviews secretly coming from the company to force businesses to spend more money? Do you trust the reviews posted on Yelp? Should the identities of Yelp reviewers be protected?


David Lazarus, Consumer Columnist, Los Angeles Times

Kristen Whisenand, Yelp Inc. Spokesperson

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