When Yelp launched in early 2005, I yawned. Who needs another site where people review restaurants and other local businesses? It’s one of the oldest ideas on the Internet. Citysearch, the leader, continues to struggle to find a sustainable business model more than a decade after its founding. Startups, such as Insider Pages, come and go. Big companies, from search engines to yellow-pages publishers, have long added user reviews to their local listings.
But Yelp has thrived. In March, it had 3.3 million users, according to Comscore, up 87 percent from a year ago. Citysearch still towers above it with 16.2 million users.
What Yelp did differently than these others, as Jeremy Stoppelman, the site’s co-founder and chief executive describes it, was to spend most of its energy attracting a small group of fanatic reviewers. It didn’t try to pay for reviews, as some sites have. It didn’t subordinate the users’ contributions to professional reviews, as on Citysearch, or to directory information, as on yellow-pages sites.
Instead, it structured the site to motivate people through the praise and attention that their reviews receive from others. “Yelp is about the reviewing experience,” Mr. Stoppelman said. “It is like a blog with a little bit of structure.”
Most people aren’t drawn to write a witty review of the scrambled eggs at the local diner simply to get their ego stroked. But enough people find it rewarding to turn Yelp into one of the richest repositories of local reviews on the Web.
Now a much broader audience is discovering how useful the site can be, and some visitors are adding their own contributions as well. Yelp understood that, as with Wikipedia, a small group of people can create something that the rest of us can take advantage of.
Reviewers also benefit because they can see how other users vote on their reviews. Moreover, the site mimics the structure of a social network, so that active members can see information about and follow the work of other reviewers who interest them. Yelp has also started holding social events for its frequent reviewers.
“People come to write reviews as a hobby and also to meet other people,” Mr. Stoppelman said.
This playbook isn’t new. Epinions, a product review site, built a similar community (see this interesting Wired piece from 2000) until it was dissolved into Shopping.com, now part of eBay.
One reason for Yelp’s success is that it focused on San Francisco in its first year. The new generation of Web workers took Yelp to be their entertainment bible, and that helped generate enough critical mass that others joined in. Now the Bay Area represents only 30 percent of Yelp activity, Mr. Stoppelman said. Los Angeles is second, followed by Chicago and New York.
The site is also popular, Mr. Stoppelman said, because Yelp has been slow to add advertising, and there still isn’t that much of it. There are no banner ads. Instead, Yelp uses some relatively subtle advertising formats: Businesses can pay to have their companies listed first on search pages (identified as a sponsored listing). And they can pay to add photos and a little other information to the page about their business. But revenue from these sources isn’t enough to make Yelp profitable, Mr. Stoppelman said.
Responding to criticism from business owners that some user reviews are unfair, Yelp also recently introduced a way for the business owner to send a message back to a reviewer. If the reviewer doesn’t choose to write back, the business owner can’t send a second message.
But Mr. Stoppelman said that the site deliberately tilts its rules to support the reviewers. “We put the community first, the consumer second and businesses third,” he said.
