NEWS

Everyone’s a critic on Yelp

Telegram
Friday, August 10, 2007
By Nathan Halverson

When Los Angeles-based Sara Leib wanted to find the perfect restaurant during a trip to Northern California, she turned to the increasingly popular Web site Yelp.com and its legion of online reviewers.

Like a growing number of sites, Yelp relies on users to create its content — in this case, reviews of everything from restaurants to cemeteries.

Yelp is the place where everybody is a critic. And businesses need to listen up, because those criticisms — good and bad — are easier to find than ever before.

Like most users, Leib, a 25-year-old jazz musician, not only searches for reviews but also shares her opinions. Her reviews range from a Buddhist temple to a hair salon. And of course, not all the reviews are flattering. She started one, “Here’s why this mall sucks …”

Some industry analysts have pegged Yelp as the next big thing, noting that its blend of social networking, phonebook-like details and easily searchable reviews is a good mix.

The number of visitors to Yelp, based in San Francisco, has nearly tripled since last year. The site now receives about 4 million unique visitors a month and boasts more than 1 million reviews.

It is especially popular with the coveted market of urbanites in their 20s and 30s.

“I think Yelp has a very specific audience that it has attracted. It is the young, hip people,” said LeeAnn Prescott, a San Francisco-based analyst with Hitwise, which monitors Internet traffic.

Power Of The Buzz
This young, tech-savvy crowd has proven to be the bellwether for success on the Internet, according to Hitwise. In April, it declared that Yelp was a leading candidate to become the next Web site to vault from the fringes of the Internet into the mainstream.

In turn, some businesses receiving good reviews and a high ranking on Yelp have seen a marked increase in sales.

“Yelp has the power to make or break businesses,” Prescott said. “I actually chose my hair stylist based on what people on Yelp said.”

Users can post pictures of themselves and the restaurants they visit. They can compile lists, such as their favorite restaurants. Yelp recently began allowing users to post events, which can be rated and reviewed.

Reviews can be written to whatever length, and Yelp uses a five-star ranking system.

Initially, Yelp is focusing its growth on select metropolitan markets, such as New York, San Francisco, Boston and Los Angeles. It hosts parties for frequent reviewers and employs people in these areas to make sure the site is attuned to new trends. And of course, it solicits local businesses to advertise on its Web site.

By early next year, Yelp expects to have rolled out in 25 markets across the United States, CEO and co-founder Jeremy Stoppleman said.

He likens its growth to Craigslist, which grew in popularity market by market.

But even where it has not officially launched, so-called Yelpers are growing the site organically.

In Minneapolis, which Yelp has not yet targeted, amateur critics have reviewed about 810 places.

Reviews can be written about anything that has an address.

Competition Heats Up
Yelp is far from the first site to try to make money by letting users share opinions on local businesses. Back in 1979, Tim and Nina Zagat began a survey that collected the experiences of restaurant diners. The results were then printed in Zagat guides, which today cover more than 70 markets and are also available online and via mobile devices.

They claim more than 30,000 reviewed places, since Zagat has expanded surveys to include hotels, nightlife, the marketplace, movies, theater and other attractions. Some navigation systems even include Zagat restaurants in their GPS navigation systems.

There’s also insiderpages.com, Judysbook.com, Angieslist.com and others that were around first. But none has the buzz that Yelp is generating. Judysbook recently threw in the towel and now focuses on local sales and coupons.

Still, competition is heating up as more companies in the local search business allow users to review businesses.

Yelp has partnered with Google. People searching for local businesses on Google will see reviews written by Yelpers. And Google is responsible for a great deal of Yelp’s traffic, Prescott said.

About 40 percent of people said that ratings and reviews were important to them when determining what tools, such as the YellowPages or Google, to use to find local products and services, according to a recent survey by the Kelsey Group.

As more reviews come online and are tied with people’s first impressions of businesses, some owners are fighting back against bad reviews.

A spa owner in Saratoga, Calif., documented her experience with bad reviews on Yelp in the trade publication “American Spa.”

Peggy Wynne Borgman wrote that she was initially appalled by bad reviews of her spa, Preston Wynne.

But after time, she contacted the bad reviewers, offering them the opportunity to try her services again.

She even reached out to the positive reviewers, hoping to ferment more of them. And she eventually boosted her ranking to 4 out of 5 stars.