Yelp, Inc.

from Wikipedia, the free encyclopedia
Yelp, Inc.

logo
legal form Corporation
ISIN US9858171054
founding October 2004
Seat San Francisco
management
  • Jeremy Stoppelman ( CEO )
  • Joseph R. Nachman ( COO )
Number of employees 4350 (2016)
sales US $ 713 million (2016)
Branch Internet evaluation and assessment services
Website www.yelp.com

Yelp, Inc. is an American Internet company that operates a recommendation portal for service providers. It was founded in 2004 by Jeremy Stoppelman and Russel Simmons, and their Yelp website was redesigned in February 2005 to focus on user-generated reviews. Yelp received $ 130 million in capital between 2005 and 2010 and became a public company in the US stock market in 2012. The company generates revenue by advertising business on its website. Its Internet business listing rating system has been the subject of both controversy and litigation.

history

2004: Concept and foundation

Yelp Inc. grew out of an incubator called MRL Ventures, founded by Max Levchin and several former PayPal executives. Stoppelman suggested a website where users could email friends for recommendations on local services, and Levchin agreed to invest $ 1 million in the project. MRL co-founder David Galbraith, who initiated research into a Yellow Pages- style Internet product, suggested the name Yelp. This is a short form of Yel low P ages (German: Yellow Pages), and they liked the sound of the word. The project started in 2004.

2005 to 2010: development and expansion

In 2005, Yelp Inc. began adding social networking features to its website and created a group of super users called The Yelp Elite. The number of reviewers rose from 12,000 in 2005 to 100,000 in 2006, and by 2007 the site had received one million reviews from store visitors. In 2008 the number of visitors rose to fifteen million visitors per month.

In October 2005, Yelp Inc. received $ 5 million venture capital funding from Bessemer Venture Partners to fund its expansion into the New York City, Chicago and Boston markets. In October 2006, Benchmark Capital invested $ 10 million, followed by a $ 15 million investment from DAG Ventures in February 2008. In January 2010, Yelp Inc. received $ 100 million in venture capital from Elevation Partners the sales team was expanded.

In 2008, Yelp Inc. added new features to its website to enable business owners to manage their own listings and introduced its first iPhone app. Yelp websites were found for Canada (2008), UK (2009), France (2010), Germany (2010), Australia (2011), Denmark (2012), Turkey (2013), New Zealand (2013), Brazil (2013) , the Czech Republic (2013) and Spain (2013). In August 2009, an update of the Yelp iPhone app came out with a hidden Easter egg function called Monocle, which could overlay Yelp reviews via the iPhone's camera view and was considered the first augmented reality mobile app for the iPhone.

In December 2009, Google entered negotiations with Yelp Inc. to acquire the company, but the two parties could not come to an agreement. According to the New York Times, Google had bid more than $ 500 million, but the deal fell after Yahoo bidding $ 1 billion. Tech Crunch reported that Google refused to offer the same thing as Yahoo. As a result, the management and board of directors of Yelp Inc. could not reach an agreement on the terms of sale, so both offers were not pursued.

San Francisco, where Yelp was founded, remained the most active (as of 2008), but Yelp was also used significantly in 18 other metropolitan areas including Boston, Chicago, New York, Washington, DC, San Diego, and Los Angeles. The website had more than 4,000 rated restaurant listings in San Francisco, some with hundreds of reviews each. According to reports, Yelp has 108 million monthly visitors and a total of 42 million user reviews. According to estimates by the CEO, 85% of the ratings had a positive trend and most likely came predominantly from the population group of 26-35 year olds.

In January 2010, Yelp Inc. introduced an Internet check-in feature that put the company in competition with the Foursquare social network. In June of this year, OpenTable's restaurant reservations feature was added to the website.

In September, two Berkeley University economists surveyed 300 restaurants in San Francisco and correlated their nightly reservation numbers with their ratings on Yelp. Using online reservation data from July 2010 to October 2010, they concluded that an improvement from 3.5 stars to 4 stars represented an increase of 19 percentage points in 7pm bookings. In the same month, an assistant professor at Harvard Business School published an analysis using data from all Yelp-rated Seattle, Washington restaurants from 2003 to 2009, and concluded that an improvement in a restaurant's rating on Yelp would be around one star with a sales increase of 5% to 9%.

2011 to today: further development and IPO

Since April 2011, Yelp Inc. has offered a service called Yelp Deals. The service became available for Android and iPhone apps in June. By August, Yelp Inc. had reduced the frequency of its Yelp Deals due to increased competition and market saturation, and planned to cut its Yelp Deals sales force in half.

In September of this year, Yelp Inc. was involved in the Federal Trade Commission's investigation into alleged anti-competitive practices by Google. Yelp Inc. claimed that Google Places was using its web content without citing the source. Yelp also claimed that Google preferred Google Places to the Yelp website in its consumer search engine.

In November of this year, Yelp Inc. decided to go public. According to documents filed with the United States Securities and Exchange Commission, the company was still not making profits, despite annual sales up 79.9 percent. On March 2, 2012, the company's shares began trading on the New York Stock Exchange at a price of $ 15. The market capitalization was thus 898 million US dollars. The more than $ 110 million raised with the IPO helped finance the rapid expansion in the US and international markets.

The content of the company's website was incorporated into the Maps and Directions app in Apple's iOS 6 version released in September 2012. The company reported 45% of its Internet traffic was from mobile devices in November 2012. In the same year, Yelp Inc. agreed to take over its largest European competitor Qype for $ 50 million. The following year, Stoppelman reduced his CEO salary to $ 1 and has been paid exclusively from his stock options ever since.

In 2013, Yelp Inc. acquired the online reservation company SeatMe, a startup, for $ 12.7 million in cash and company stock. Since the same year, the company has been offering the option of ordering and delivering food and displaying the results of restaurant hygiene tests on the website. According to a September 2013 article by CNN, Yelp Inc.'s revenue exceeded expectations in the second quarter, but like many other Internet favorites, has not yet made a profit. Yelp, Inc. has been profitable since 2014.

In October 2014, Yelp took over the restaurant review portal .

In early 2016, Yelp slipped into the red.

In April 2020, the company stated that its customers had been badly hit by the measures taken by the corona crisis. Yelp announced it was laying off more than 2,000 of its employees.

Employees and corporate culture

In 2012/13, Yelp moved into its new corporate headquarters and occupies almost 14,000 m² on 12 floors at 140 New Montgomery (the former PacBell building) in San Francisco. The company's sales force is located in the US cities of San Francisco, Chicago, New York City and Scottsdale, Arizona. The international locations include Hamburg, Dublin and London. The company's corporate culture includes casual clothing, a non-hierarchical structure and an egalitarian table arrangement in the open-plan office. At organizational meetings, employees of all levels are encouraged to speak up. Leisure options include computer games, a pool and a snack area. The company is actively recruiting new employees in universities.

Internet services and features

As of December 2014, the company's website had more than 135 million unique users per month. According to the founder of Sterling Market Intelligence, the Yelp Inc. website is one of the most important websites on the Internet for both business owners and consumers.

Search engine

The company's website offers specialized search functions and provides information on businesses in a specific area, given by address or postcode. Each paid listing for a business includes a filtered 5-point rating, filtered reviews from other site visitors, and details such as: B. Address, opening times, disabled access and parking facilities. Site visitors can update store listings with the moderator's permission, and store owners can directly access and update their listing's details. Entries include retail stores, service providers, cultural venues, public spaces, and more. Yelp websites and features are available for many mobile devices. The company released an application programming interface (API) in August 2007 that enables developers to use data from Yelp business records in third-party applications.

advertising

The company's primary source of income is business advertising on its Yelp website, including preferred search result placement and special listing features. In August 2013, 80% of Yelp Inc.'s sales came from merchant profile enhancements and ads on its website. Another 15% of sales came from advertising revenues from domestic companies, with advertising growth measured at 77% per year. As of 2013, about half of the staff at Yelp Inc. were ad salespeople.

Online offline community

The company's website, Yelp, forms an Internet community based on user reviews and social networking. The functions of a social network allow visitors to the website to see the popularity, community status, company ratings and interests of each author of a review. Yelps labeling initial evaluator , peer feedback mechanisms and priority placement for popular reviews aim to motivate the author of book reviews. In addition, business owners can communicate with their reviewers using private messages or public notes. Yelp requires review writers to register and encourages them to post their real name and photo. This creates a participatory culture where users share their personal insights and suggestions, thus giving collective feedback to local businesses. In addition, the website has an internet forum where people can discuss local business and events.

The company's actions to strengthen its user community include events in nightclubs, bars, restaurants and cultural venues for its elite members in various cities. A reviewer achieves elite status by writing useful and entertaining reviews that gain the recognition of others.

In November 2016, Yelp announced that it would discontinue marketing outside of the United States and Canada, laying off 175 employees, most of whose roles included managing the overseas communities. As a result, there have been no official offline community events outside of the core states since this step.

User rating filters

Since its founding in 2004, Yelp Inc. has used an aggressive user reviews filter, the goal of which is to isolate reviews that are either unhelpful or suspected of being biased or malicious in one way or another. Therefore, 25% of the user reviews received on the company's website are isolated and placed in a secondary location on the website. The filter is an algorithm in a sophisticated software system that excludes many user reviews from calculating the number of stars for this merchant on the Yelp website.

Criticism and data protection

In May 2012, Stiftung Warentest criticized the fact that the Yelp app did not send all email addresses anonymously without being asked. It was also criticized that the usage statistics were also sent to the company's own servers.

Controversy in the ratings

For much of its history, the company has been the focus of criticism from some of its business customers who alleged that Yelp Inc. was manipulating its website and user ratings based on whether or not the business was a Yelp advertiser. Yelp Inc. denies this and has expressed dissatisfaction with business owners who asked friends and co-workers for reviews or bought bogus reviews.

Business complaints were reported by ABC News in August 2008. In 2009 the East Bay Express reported it had spoken to dozens of local business owners. Six of them reported that Yelp Inc. sellers had agreed to delete or remove negative reviews [from their Yelp online profile page] if they became advertisers. The article also reported that Yelps CEO said: advertisers and sales reps cannot remove or delete negative reviews. Additional claims by several business owners were reported in a follow-up article a month later.

In early 2010, a class action lawsuit was filed against Yelp. It was alleged that Yelp asked a Long Beach veterinary clinic to pay $ 300 a month for advertising services, which include the suppression or deletion of customer reviews that denigrate the clinic. The following month, nine other companies joined the class action lawsuit and two similar lawsuits were filed. Yelp denied that its sales force was putting pressure on other companies. In response to the lawsuits, Yelp changed its reviews policy and introduced new features in April 2010 to avoid misunderstandings among business owners. To improve the transparency of the review process, Yelp stopped offering commercial advertisers the option to display a positive review first. These 2010 lawsuits were combined into one potential class action lawsuit, which was dismissed in 2011 by Judge Edward Chen in the US District Court of San Francisco. Despite appeals from plaintiffs' attorney, Chen ruled that Yelp's choices regarding the display of user reviews on his website were covered by the Communications Decency Act, which protects internet companies from liability for user-generated content. In July 2013, plaintiffs appealed to the 9th District Court of Appeals in San Francisco.

In August 2012, two New Haven, Connecticut business owners claimed that Yelp removed positive reviews after they refused to buy advertisements. In October, Yelp introduced a system to detect companies buying bogus positive reviews. An article on ABC News announced its own list of companies offering to pay to post positive reviews on the Yelp website. In November, CBS Denver reported a complaint from a small business owner about Yelp's review filtering system. In October 2012, Yelp Inc. posted 90 days of consumer warnings on its website for around 150 companies that Yelps researched were guilty of paying money for user reviews.

In 2013, a California court upheld Yelps' right to continue using its aggressive and automated review filter with the aim of eliminating false or inconsistent company reviews using undisclosed criteria. Yelp successfully defended itself in a similar case (Levitt vs. Yelp) in 2011. In June 2013, Yelp Inc. filed a lawsuit against BuyYelpReview / AdBlaze, accusing the company of selling Yelp reviews from unknown accounts to unknown third parties. In July, the International Business Times reported that the company continued to face criticism outside of the courtrooms and that anti-Yelp sentiment was rampant on the internet and social media. The article also reported that the Federal Trade Commission had received nearly 700 complaints against Yelp over the past 4 years. In August, Yelp Inc. held a series of community-style gatherings in major US cities to discuss misunderstandings from local business owners. Yelp assisted the New York State Attorney's Office in an investigation that resulted in fines totaling $ 350,000 against 19 firms that wrote bogus reviews for small businesses, who in turn paid them for them. In September, Yelp Inc. filed a lawsuit against a San Diego attorney who had previously fought a lawsuit against Yelp, alleging that the attorney had instructed employees to write [Yelp] reviews for [his company], and that he was part of a group of lawyers who rated each other [on Yelps website].

In December 2013, the Münchner Abendzeitung described the case of a Munich restaurateur who initially did not want to place ads on Yelp for his Chinese restaurant. He reports that as a result, the (predominantly) positive reviews on the Yelp website have disappeared from the pool of recommended reviews, which has led to a massive loss of guests.

Competitor

In addition to Yelp, there are other platforms that have taken on the subject of reviews.

TripAdvisor focuses on travel destinations and recommendations from travelers for travelers. Foursquare has linked the topic of gamification with reviews and was the first provider to introduce a check-in function, which is now also available on Yelp. The increasingly powerful functions of Google Maps, including their own lists, reviews, photos and integration into the Google or Google Maps search function, mean that Yelp is now also a strong competitor.

Web links

Individual evidence

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  117. ↑ a b Cecilia Vega: Yelp Outs Companies That Pay for Positive Review . ABC News. Archived from the original on June 2, 2013. Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. Retrieved June 6, 2013. @1@ 2Template: Webachiv / IABot / abcnews.go.com
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