Yelp Turns 10: From Startup to Online Review Dominance Eater

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Jeremy Stoppelman talks the early days of Yelp, 2013. [Video: Bloomberg]

Urbanspoon is founded in Seattle. e self-funded company aggregates reviews from local city papers, Citysearch, and the like. Users can also leave "comments" about restaurants, which are ostensibly reviews.

May: Yelp's audience grows "124% from May to May ... with monthly visitors increasing to 1 million," according to Nielsen/NetRatings data cited by USA Today.

September: Urbanspoon is poised to


launch nationally, with 14 city sites. TechCrunch reports the site has "1.5 million monthly page views on 500,000 unique visitors."

January: Yelp closes "a $15 million round of venture capital from DAG Ventures and earlier investors, gaining a healthy $200 million valuation," Bloomberg reports.
February: Yelp introduces business owner accounts, allowing business owners to contact reviewers privately. e New York Times quotes a research analyst who says "smart business owners would get involved in Yelp, listening, responding and being an active part of the dialogue, some going so far as to place signs on their physical doors requesting reviews.'"
May: A New York Times article describes Yelp as being "slow to add advertising." Stoppelman says: "We put the community rst, the consumer second, and businesses third."
July: e App Store launches via iTunes. Urbanspoon and Yelp launch iPhone apps.
Photo: planetc1/Flickr]

August: Yelp goes international and launches in Canada.

November: Yelp shares analytics with TechCrunch that show 15.8 million unique visitors and 4 million reviews over the previous 30 days. TechCrunch writes: "Not bad for a company that was born just four years ago." Also in November is Citysearch's relaunch. TechCrunch cites Comscore's report that Citysearch had 14.6 million unique visitors in October. e race between Yelp and Citysearch continues.
December: Yelp's iPhone app is the third most popular travel app according to TechCrunch, behind Google Earth and Urbanspoon. Citysearch releases its own app.

February: Yelp is hit with a class-action lawsuit. Plaintiffs claim "that they were contacted by Yelp for ad sales in exchange for erasing unfavorable reviews from their pages. In some cases negative reviews were allegedly added a er sales offers were declined." Stoppelman tells Mashable that class action lawsuits are basically a coming-of-age for startups: "My thoughts to someone with a successful Internet business that gets hit with a lawsuit is, 'Welcome to the big leagues.'"

[Photo: Yelp]

April: Yelp introduces "public commenting" for businesses, allowing business owners to reply to reviews on their pages for free (a er they've claimed their business page).

Also in April, Urbanspoon is acquired by IAC. It remains an independent brand. October: Urbanspoon enters the reservations business with the launch of Rez.

December: TechCrunch reports that Yelp turns down Google's acquisition offer, which would have paid "around $550 million plus earnouts" for Yelp. Stoppelman would later tell the WSJ: "Yelp's continued success as an independent company suggests we made the right choice and nothing is more rewarding than charting your own course."

Jeremy Stoppelman talks to Charlie Rose, 2013. [Video: Charlie Rose]


January: Yelp gets $100 million in funding from Elevation Partners, a private equity rm. Bloomberg quotes sources near the deal who say "the investment values Yelp at $475 million." Yelp claims 26 million unique visitors the month prior.


Screengrab: Yelp/Eater

June: Yelp integrates OpenTable reservations, allowing users to check availability and book reservations

directly from a restaurant's Yelp page. Yelp takes another step closer to becoming a one-stop-shop for restaurant information on the web. Eater's analysis of the news: "Yelp claimed that this integration was based on user feedback, but really it was necessary for Yelp and OpenTable to partner and compete against Urbanspoon who just last month announced their RezBook iPad application that allows restaurants to book and manage reservations, as well as a pilot program in Seattle and Los Angeles called Rez that allows diners to book tables (Rez is to go national in 2010)."

Also in June, co-founder and CTO Russ Simmons steps down. TechCrunch reports he will remain in an "advisor role" and that he "remains a 'signi cant' shareholder in the company."
A parody of compulsive Yelping. [Video: YouTube]


September: Google acquires Zagat and is now in the local review business. Stoppelman calls the purchase "a funny move."
Later this month, Stoppelman testi es about Google in a Senate antitrust hearing. He puts his written and oral testimony on the Yelp blog. uote: "In some instances, Google simply excludes competitor results as a matter of design, not as a matter of objective, algorithmically-driven analysis."
Y elp Testimony by L uther Lowe

them algorithmically, however, Google simply favors them as a matter of design.
For example, when users search for a barber in Madison, Wisconsin, Google will always present links to its own consumer review website in the most prominent position regardless of whether the algorithm has actually determined that it has the most relevant content. Put differently, it is impossible for any of Google’s competitors to be displayed as prominently as Google itself, even if Google’s own algorithm rates them higher. In some instances, Google simply excludes competitor results as a matter of design, not as a matter of objective, algorithmically-driven analysis. [See Exhibit F]
Is a consumer (or a small business, for that matter) well served when Google artificially

 promotes its own properties regardless of merit? This has nothing to do with helping consumers get to the best information; it has everything to do with generating more revenue. [See Exhibit G]

1 Source: Simon Morrison of Google, July 18, 2011 (


2 The “merged” portion of Google search results have effectively replaced organic search results for local searches. 3 Source: Google Public Policy Blog, May 8, 2009 (


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Y elp Verbal Testimony by L uther Lowe

  1. About Yelp

Thank you, Mr. Chairman and distinguished members of the committee. I appreciate your interest and the invitation to appear today. My name is Jeremy Stoppelman, and I am the CEO of Yelp, a company I co-founded in 2004 with my former colleague from PayPal, Russell Simmons.

At Yelp, our mission is to connect consumers with great local businesses. The site allows people throughout the country to share detailed and passionate reviews about

 businesses in their neighborhoods. In turn, businesses that provide great service and good value are able to establish and promote themselves online.

Today, Yelp employs more than 800 people throughout the country. More than 60 million consumers use Yelp every month to decide how and where to spend their hard earned money. And on the flip side, job growth in this country relies on small, but fast growing and successful businesses. Yelp helps them reach new customers by amplifying their positive word-of-mouth, online.

  1. About this Hearing

This hearing is important because it examines issues that go to the heart of innovation: whether new ideas can compete fairly against expanding monopolies. In our case, I wonder if we would have been able to start Yelp today given Google’s recent actions. 

Let’s be clear: Google is no longer in the business of sending people to the best sources of information on the web. It now hopes to be a destination site itself for one vertical market after another, including news, shopping, travel, and now, local business reviews. It would be one thing if these efforts were conducted on a level playing field, but the reality is they are not.

  1. Google’s Bad Conduct


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October: Apple's new voice-controlled "personal assistant" Siri uses Yelp data for queries based on restaurants, bars, coffee shops, and the like.
November 17: Yelp les for an initial public offering of up to $100 million of Class A common shares. e Wall Street Journal breaks down the numbers and reports that from 2005 to 2010, Yelp had received $55 million in funding "from venture capital rms Bessemer Venture Partners, Benchmark Capital, DAG Ventures, and Elevation Partners" over the course of ve rounds. Bessemer is the largest shareholder at 22.5%. Stoppelman holds 11.1%.

Photo: @Yelp

February: An updated ling with the SEC show Yelp's plans to price its IPO shares at $12 to $14.

March 2: Jeremy Stoppelman rings the bell on Yelp's rst day trading on the New York Stock Exchange. Mashable reports the stock "was up 64% to $24.58 per share midday."
May: At the end of its rst quarter as a publicly traded company, Yelp has earned $27.4 million in revenue, but has lost $9.83 million. e LA Times describes the situation as "nothing to yelp home about, not worth a bad review either."
June: Microso partners with Yelp, incorporating Yelp's business reviews into Bing searches. July: e rst in the series of "Real Actors Reading Yelp Reviews" goes live on YouTube.


Photo: Yelp

October: Yelp cracks down on businesses buying fake reviews with a "badge of shame."

In October Yelp acquires Qype for $50 million. TechCrunch describes Qype as Yelp's biggest competition in Europe. Together the sites garner 93 million monthly unique visitors and 32 million reviews, according to a Yelp blog post.
Also in October, Village Voice Media sues Yelp for using the phrase "Best Of," claiming: "Yelp has irreparably damaged the valuable reputation and goodwill of VVMH and its 'Best Of ' marks."


January: A Freedom of Information Act request unearths 700 complaints led with the FTC against Yelp. e most common complaints claim that Yelp lters out positive reviews and allows negative reviews through, especially in cases where the vendor in question did not purchase advertising.
Also in January, Yelp adds health department scores to restaurant pages in SF and NYC. (By 2014, NYC health officials would be using Yelp to nd unreported cases of foodborne illness.)
Photo: Yelp

July: Yelp launches its direct-from site ordering platform for take-out and delivery.

Also in July, OpenTable acquires Urbanspoon's Rezbook and partners with Urbanspoon to power their reservations. Later in the month, Yelp acquires SeatMe, an online reservation system, for up to

$12.7 million.

At the end of the month, Yelp's nancial reports show it is coming closer to pro tability. A er Q2, the company has lost $5.6 million, versus 2012's $11.7 million by midyear. Net revenue in Q2 sees a 69% increase over 2012's Q2 numbers.
August: Tips on Foursquare are reportedly growing faster than reviews on Yelp. Yelp allows mobile reviewing for the rst time.

September: New York cracks down on companies selling fake online reviews, ning 19 such businesses more than $350,000. A new study from Harvard Business School suggests nearly 16% of Yelp restaurant reviews are fake.

October: A group of Yelpers le a California class action lawsuit against Yelp, claiming that they are actually unpaid employees and legally deserve pay for their work.
P anzer v. Yelp Class Action


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January: A landmark decision by the Virginia Court of Appeals forces Yelp to reveal the identity of Yelpers who le bad reviews of Virginia businesses, on the grounds that the reviews are "not protected First Amendment opinions" if they were fake accounts or not actual customers. Yelp vows to protect free speech for anonymous reviewers.

February: A Virginia court rules that one woman's scathing Yelp reviews of a local contractor are defamation.
March: Yahoo incorporates Yelp ratings into its search results.
Screengrab: Yelp SeatMe O icial Site

May: Yelp makes good on its acquisition of SeatMe and launches Yelp Reservations, an online reservations service that restaurants can use for free as long as they "claim" their Yelp pro le page.

July: Yelp introduces a video feature allowing users to add videos to their reviews. Later in the month

— and following complaints from Yelp — Google revises its search to allow Yelp to be the top search results when the world "Yelp" is used in the search phrase.

Yelp reports a pro t in the second quarter. As the Wall Street Journal reports, the pro t means Yelp is "switching to the black side of the ledger for the st time since the San Francisco business-review website made its market debut in March 2012."
Chefs read their restaurants' worst Yelp reviews at Aspen Food & Wine.

August: e current valuation of Yelp is $5 billion and the site claims over 130 million unique visitors monthly, reports USA Today. Stoppelman looks back: "It's easy to forget what life was like before Yelp, but when I travel to places we aren't (there), I'm reduced to once again picking restaurants based on how many people are inside ... those days seem like a long time ago. Consumers are determined to spend their money wisely now, and we're happy to be a part of that shi ."

  • All Yelp Coverage on Eater [-E-]


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