Yelp Reviews: Make or Break a Small Business

Yelp reviewsYelp, a San Francisco-based global internet company that provides visitors with a search tool on its website to access business reviews of companies that provide products and services in their area. The website averages 120 million unique visitors a month and so far since its inception in 2004, Yelp users have written over 53 million business reviews. Its source of income is mostly derived from business advertising on its website, such as preferred search result placements and special listings. Company insiders have always claimed that paying advertisers never have any influence over the reviews. Yelp allows visitors to post reviews and rate businesses by using a five-point star system. The company also claims that it has an effective filtering system to detect fake reviews, good or bad. However, many entrepreneurs are claiming that the survival of a business is in the power of Yelp reviews that can make or break a small business.

Yelp has received backlash from many small business owners and receives on average, six subpoenas a month, requesting information on the identities of anonymous users that have posted negative reviews of businesses. Entrepreneurs are angry at Yelp for allowing users to sign up for free and post reviews under a screen name that conceals identity. The Public Participation Project, a nonprofit organization based in Berkeley, California, that promotes internet free speech, says it receives calls every week from reviewers who are being sued by business owners. Yelp supporters such as the Global Network Initiative, a powerful organization that opposes Internet censorship, proclaims that online business reviews works both ways. Businesses can manipulate the system also, by paying third-party services to deluge their online reviews with favorable comments, which is a practice known as “astroturfing.” With or without Yelp reviews, a small business can make or break its own revenues.

Many entrepreneurs believe Yelp reviews have too much impact on the sales of their businesses. A free speech internet case that will be litigated in Virginia Supreme Court later this month, involves Joe Hadeed, owner of Hadeed In Home and Office Cleaning Services. He stated that in early 2012, he discovered an unfavorable comment on Yelp and in the course of the next few weeks, more harsh critiques started to overshadow the good comments. Subsequently, the Yelp reviews decreased Hadeed’s business revenues by 30 percent, 80 employees were laid-off and six trucks were sold. Eventually, Hadeed sued seven reviewers for defamation and is insisting Yelp to reveal their true identities. To date, the Alexandria Circuit Court and the Virginia Court of Appeals are in favor of Hadeed’s lawsuit, by holding Yelp in contempt for not releasing the names of the reviewers. Yelp appealed to the state Supreme Court by protesting that the reviews are protected by the First Amendment. This free speech internet case could be a precedence, if the Supreme Court denies Yelp’s appeal and is mandated to turn over the reviewers’ identities, it could create a definitive boundary of Internet censorship which will erupt the paradigm of online reviews.

In November, Yelp has hired Laurent Crenshaw, a lobbyist, to push for the federal “Anti-Slapp” law, Slapp is an acronym for Strategic Lawsuit Against Public Participation. The purpose of the anti-SLAPP law is to thwart businesses from filing unsubstantiated lawsuits against reviewers. So far 30 states have enacted or considered anti-Slapp bills which swiftly settles cases and mandates the losing party to pay all legal fees. Breaking or making the reputation of a small business is internal, Yelp reviews only give a voice to the consumer and make businesses more transparent in their conduct with customers.

By Isriya Kendrick

CBS Money Watch
Wall Street Journal
MSN Money

2 Responses to "Yelp Reviews: Make or Break a Small Business"

  1. Eric   April 6, 2014 at 5:23 pm

    I don’t like the idea of allowing to post anonymously…opens the site up to exploitation by competitors. But on the other hand if the complaint has merit, then the business owner should address it…and if it gets addressed in a public and timely manner it can actually help a business

  2. LA VE   April 5, 2014 at 10:54 am

    I cancelled my Yelp account. I had several clients who said they posted comments that yelp arbitrarily removed.I checked my account and they were right. I see no value for my business using this service. My business for over 15 years old, and I offer excellent service at a fair price. Fortunately my business continues to grow…


Leave a Reply

Your email address will not be published.