Yelp becomes a victim of its own flaws

by Tim Hill (aka Doodled)

August 27th 2013
People are now judging Yelp by its politcal leanings, not its ability to provide quality reviews.
People are now judging Yelp by its politcal leanings, not its ability to provide quality reviews.

I had only just finished my post Is Yelp a waste of time and doomed to failure when I went to check on Yelp's own review page about itself.

As usual I expected to see lots of grumbling from reviewers that their reviews had been filtered and lots of grumbling from business owners that positive reviews had been filtered after they turned down Yelp's sales team (an accusation by the way, not proved … yet!).

Instead I found pages of one star reviews for Yelp regarding their association with ALEC. Now some suggest ALEC is a “reactionary right-wing group” while others believe it is the best thing since sliced bread – this post is not about the wrongs or rights of ALEC.

It is about the fact that people are now reviewing Yelp!, a website about reviews, based on its political leaning, not on its ability to provide accurate and quality reviews of businesses.

What are you reviewing on Yelp?

This, as I pointed at, in my previous post, is one of the fundamental flaws of Yelp! Your reviews are not peer to peer and your review doesn't have to add anything.

As a personal example there is a restaurant just down the road from me where the soup bowl is large enough for ducks to feel pretty much at home. Order a steak and it can double as an umbrella in the case of a sudden downpour. Despite the mountainous portions it is cheap as chips.

Nothing really tastes of anything except salt so it gets one star from me. For my mother-in-law it is her all time favourite eatery because "you get lots and it's really cheap" so five stars from her.

Now that means that someone like me will see an overall three stars and give it a try only to be bitterly disappointed. Someone like my mother-in-law will give it a try and puzzle the question, "Why only three stars?"

The problem is we're not reviewing the same thing and neither are people on Yelp!

Does the star rating actually mean anything?

So here is Yelp's fundamental flaw with its own system. Yelp says it is getting into bed with ALEC and is flooded with negative reviews. At the time of writing this blog it is averaging 2.5 stars out of 5.

As someone trying to choose a good review site I might have to conclude Yelp! is not very good at being a review site.

I would be totally wrong.

A vast number of those negative reviews are not about Yelp's capability to do its job, but about Yelp's political affiliation. So the star rating misleads me about Yelp in exactly the same way as it misleads me about where to eat.

Yelp! shoots itself

Because Yelp's model is fundamentally flawed this way it has shown on its own review page about itself how a business can be pulled down for something that actually has nothing to do with its core business capabilities.

What many might call rough justice.

Can Yelp! Hide?

Chris Crum's recent blog post Businesses Continue to Bash Yelp As Investor Bets It'll Be Dead In 2 Years is a good read but not as interesting as the blog comment by a Marc T. (you'll need to scroll a fair way down to find it).

He made an interesting accusation after the landslide of ALEC related negative reviews:

"3,000 negative reviews were placed on yelp this week and many were filtered in spite of the fact that they were from legitimate users and they did not conflict with Yelp policies. Scroll to the bottom of the page and look at the number of filtered reviews (5,136) as of 8/25/13 it was 3,296 earlier in the week. Click on the word filtered, enter the capcha code and see the results (tell me the results are an accident)."

So can Yelp hide the negativity of itself through it's own filter?

Catch 22. If it does it will be conclusive evidence that the filter can be manipulated on demand and if it doesn't its own star rating will be dragged down because of its political leanings.

Either way Yelp looses.

If Yelp says "I know we have a low rating but it's because of the whole ALEC thing” then restaurant owners can say “So I could get a low rating as well because of how I vote, not because of how I cook ... what kind of review system is that?"

Again Yelp looses.

The penny drops

What Yelp has inadvertently done this week is to highlight two of the biggest flaws in the system.

First, people can review you for anything (from the way you vote to the car you drive) rather than for your competency in your business.

Second, there is no peer-to-peer balance in the ratings. Some people are very happy Yelp! is now with ALEC, others are furious. Some people like bland food as long as it is cheap and there is lots of it while others prefer "cuisine". Some people like going to Disney Land and others wouldn't be dragged through the gates if you paid them.

It all means a one star or a five star won't actually help you choose somewhere or something which sort of puts Yelp on the scrapheap ... unless it can find a way to show you those reviews are from "people like you".

Can Yelp survive?

Yelp grows and grows, or at least its revenue grows and grows. But all the time it loses money.

It grows because it expands into new countries on the back of investors. But in each one it loses money.

I suspect the overall strategy is to bring in Peer-to-peer reviews but Facebook or Google could do this far faster and more effectively.

Perhaps it will pull a rabbit out of the bag yet. But for now I'll join Peter Shankman (an angel investor) in his bet – If Yelp is not dead in two years I'll give $5,000 to charity.