Editor’s note: Jeremy Stoppelman, Yelp.com co-founder and chief executive officer, will deliver a keynote address during the Real Estate Connect conference in San Francisco next week. The conference runs from Aug. 5-7. Click here for program details.

Everyone’s a critic, or so the saying goes.

And that saying is the basis of the business model at Yelp.com, an online community that features user ratings and reviews on a wide range of businesses and professionals — including real estate brokerages and agents.

In July 2004, former PayPal pals Jeremy Stoppelman and Russel Simmons reunited to launch Yelp.com.

"The inspiration for the site was the idea that word-of-mouth recommendations are the best way to find local businesses," said Yelp Chief Executive Officer Stoppelman in a recent interview with Inman News.

The original version of the site had a component for user-generated reviews, but it was more focused around users asking members of the online community for recommendations.

"We didn’t think necessarily that people would take the time to share all that great local information unless they were asked a question," he said. "Buried in there was a way to write a review. What we found, for certain people, (they got) addicted to that feature. In one sitting they would write five or 10 reviews."

The site relaunched in February 2005 to capitalize on that review-writing aspect of the site, which he said was more straightforward: "I can finally be a critic; I can practice my writing chops."

About 22 million people visited Yelp.com in May, the company reported, and Yelp community members, or "Yelpers," have written more than 6 million local reviews.

Based in San Francisco, the site initially focused on that market area and has since spread to major metro area across the country, including Los Angeles, New York, Chicago, Miami, Honolulu, Denver, St. Louis and Seattle. The company also operates internationally, with reviews for businesses in Canada, England and Ireland.

As Yelp moves into new markets, Stoppelman said the company typically brings aboard a community manager who supports the users in that market area — the site now publishes a "Weekly Yelp" for 28 cities that offers up information about business openings and events.

"It has really been a city-by-city approach from the beginning," said Stoppelman. "It’s not that dissimilar to Craigslist. It’s mostly valuable to the locals in that city — each market is really it’s on microcosm." San Francisco, Los Angeles, New York and Chicago are among the areas with the most active Yelpers, he said.

Popular reviews and reviewers, as restaurateurs and movie directors well know, can be a double-edged sword for business.

Professional critics had long wielded that sword without much competition, though the rise of social media and user-generated content on the Internet has put that sword — or lots of little swords — into the hands of the masses.

Yelp has become part of the vernacular for business searches among its core demographic — which Stoppelman said is tech-savvy, post-college 22- to 40-year-olds. The site is also finding a growing audience among older adults, he said. And it’s increasingly common in some markets to hear "I ‘Yelped’ that restaurant," which depending on the context could mean that the person wrote a review about a restaurant or looked up the reviews on that restaurant using Yelp.

"I think we live in a new age of transparency," said Stoppelman, "which is a great thing if you’re fantastic at customer service. Customer service is the new marketing. If you’re a real estate professional who is doing a fantastic job pleasing your customer, some subset of them might take the time to write a review.

"By the same token, if I had a bad interaction — (the professional) pushed too hard on a customer, that opinion can end up out there as well. The important thing to remember is the big picture: One person’s opinion is one opinion. Even if there is a comment that is less than glowing, take in that whole picture. One particular person might have a problem, but not everyone did." …CONTINUED

The site allows business owners to reach out to reviewers if they feel they’ve been unfairly criticized, Stoppelman notes. And business owners and professionals can post their own comments to provide additional information in response to reviews.

As reputation can be a major selling point for real estate professionals, guarding and promoting that reputation online can be counted among priorities for many real estate professionals.

Stoppelman said the best way to counteract negative communication and miscommunication online "is simply with more communication."

And the company used this philosophy in combating criticism and controversy that erupted in the press over the company’s advertising practices.

In February, the East Bay Express, a weekly alternative news publication in the San Francisco Bay Area, published an article titled "Yelp and the Business of Extortion 2.0" that focused on advertising sales tactics reported by some business owners.

Rumors flew about manipulation of positive and negative reviews at Yelp.com based on whether businesses advertised or didn’t advertise at the site.

On the same day that article published, Yelp’s company blog responded, picking apart aspects of that article — the blog item criticized a "heavy reliance on anonymous sources" and that the "accusatory thrust of article is essentially overturned at the very end."

The site even offers up a "Myths About Yelp" section to dispel allegations that "to rank highly in Yelp search results, business have to buy advertising," and that "advertisers get to manipulate their reviews," for example.

Stoppelman said he believes that some of the confusion about the company’s practices was rooted in the fact that Yelp "didn’t have enough outward presence in the local business community … I think (that) drove some conspiracy theories."

Yelp has "stepped up our efforts in communicating with small businesses and local businesses to talk about what we do and why, to get ahead of any concerns."

A constant battle for Yelp and other ratings and review sites is making sure the content is honest and relevant for visitors and the subjects of the reviews. Ensuring that the site’s reviews aren’t dramatically embellished by a company’s employees or friends or family of the employees presents a challenge, as does weeding out bogus negative reviews.

"It’s a very tricky problem. When you find something and it doesn’t match the expectations that have been set … based on what’s on Yelp, clearly the bad guys have won and Yelp’s lost," Stoppelman said.

The site does have filters that are designed to help identify bogus content, and "we’ve always been willing to sacrifice some possibility legitimate content" to preserve the integrity of the site as a whole, Stoppelman said.

Because the site allows detailed profiles of users, visitors to the site can choose to peruse a reviewer’s previous reviews to gauge whether the person typically offers fair and accurate commentary and insight, and some expert Yelpers have received star treatment and been sought out by businesses that seek their commentary in an effort to draw a crowd.

The democratization of reviews doesn’t necessarily marginalize professional reviewers, but it does open up a much broader set of businesses for reviews, Stoppelman said. "Before, how did you (find a business)? You asked around, opened the Yellow Pages and looked for an ad that caught your eye."

Yelp’s iPhone app has been popular for site users, Stoppelman said, and mobile innovation "continues to be an area of focus for us. Now we’re spending time thinking of how to get (a mobile tool) in the hands of folks on the other platforms."

Jeremy Stoppelman, Yelp.com co-founder and chief executive officer, will deliver a keynote address during the Real Estate Connect conference in San Francisco next week. The conference runs from Aug. 5-7. Click here for program details.


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