Data makes the difference-Yelp and its story

Starting as an online local business directory service with basic social networking feature in 2004, Yelp has successfully attracted 100 million unique visitors in one month period, January 2013. With more than 22 million user-generated reviews (in 2011), Yelp gained its fruit of victory through pivoting and a set of effective data strategies.

The initial yelp website was not easy-to-use and only received few visitors and reviews. But soon after Jeremy Stoppelman and Russel Simmons, co-founders of Yelp, noticed that an increasing number of users are using the function to leave reviews without being urged, they relaunched the website in February 2005 and pivoted on building a unique and irreplaceable database of authentic, user-generated reviews.

Yelp’s success comes from acknowledging that “Data is the next Intel Inside”, one of the least understood Web2.0 principles from Tim O’Reilly. The pattern is concisely elaborated by Marissa Mayer, Google’s VP, in an interesting interview, she confessed that:

having access to large amounts of data is in many instances more important than creating great algorithms.

So what else does Yelp do to further enhance its data strategy?

      • Creation strategy: set the network effect by default and build up the unique, hard to recreate database by accumulated user-generated contents.
      • Enhance the core data by allowing users to participate in the creation of data: user reviews, review voting, ratings
      • Let users control their own data: users can post their reviews, vote for other reviews and even share them through the integration of social networking sites such as Facebook. User-generated content can further be enhanced by the power of reputation system of Yelp’s online community.
      • Share the control with users: while Yelp owns the content of the website, users are responsible for their own contents
      • Design data for reuse: Yelp offers RSS for users to easily track recent reviews in the newsreader, publish reviews to their blogs or Facebook accounts and invite friends to follow

However, Yelp still received criticism over its review filtering system which claims to identify illegitimate reviews and remove them. The fairness of both negative and positive reviews and how Yelp decides to display on each business’s page is remained ambiguous and unclear.

Who owns the data?

Yelp introduced a feature in 2008 for business owners to manage their listing and keep the information up to date with moderator approval. Though business owners still don’t actually own the data, they cannot edit or delete any contents or negative reviews without the agreement from Yelp moderator.

How to keep the review stay authentic?

Yelp was accused for asking business owners to pay for hiding negative customer reviews on the their business listing in 2009 and in response to increase the data transparency, Yelp added a feature which lists reviews which are filtered.

As an online community providing unsolicited review writing, it is very essential to keep the content stay genuine and unbiased. Underhand review manipulation will not only lose the trust from users, but also pose a severe impact on the collaboration with advertisers.

What can Yelp do to avoid dishonest review and deliberate defamation?

Yelp’s reputation system us like a double-sided sword. We trust the reviews written by Yelp Elites, those Yelp Evangelists who actively generate authentic and useful reviews. But what would happen if business owners pay those Elites or offer free products for them to write the reviews? Are those reviews still true and unprejudiced?

While the concern is more about the morality than legality, I would suggest that Yelp:

  1. Add specific recognition mechanism to make the identity of review authors more transparent. (e.g. connect with Facebook, LinkedIn or other social media identity)
  2. A due process which requires the user to confirm that the state respects all legal rights owed to a person, may be considered as well
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2 thoughts on “Data makes the difference-Yelp and its story

  1. Hi Eddie,

    Good points. But do you think Yelp should be stricter on the users who write the reviews since a lot of fake reviews will affect the outcome or rating?

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