Yelp Puts 'Extortion Conspiracy Theory' Back Into Spotlight

Chris CrumBusiness

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Well, the Yelp "extortion" (or lack thereof) narrative is back in the news. For years, the company has been accused by business owners of burying positive reviews when the owners decline to pay for advertising on Yelp. Yelp has always strongly denied such things, pointing to failed lawsuits, studies, etc., but the stories and accusations have never gone away.

Do you believe Yelp has proven beyond a reasonable doubt that such accusations are completely without merit? Share your thoughts in the comments.

So why are we talking about this now? Mostly because Yelp itself is. The company has a new blog post out claiming that the "Yelp extortion conspiracy theory" has been "debunked...again."

More accurately, Yelp played some phone calls for a guy who works for an organization that a Yelp sales exec is the board member of, and it was concluded that there was no wrongdoing. It's unlikely that this is going to make the narrative disappear.

Vince Sollitto, SVP Communications and Public Affairs, writes, "Sometimes people claim Yelp gives more favorable ratings to businesses who advertise on our platform, and some even allege that Yelp threatens to manipulate ratings and reviews of those who don't advertise. These claims are of course false and have already been scrutinized by courts of law, academic studies, and a closed FTC investigation. They are sensational, however, and the media has often repeated them at face value without doing any investigating or even real reporting. Until today."

He's referring to a report from Greg Sterling, who wrote about a plumber he spoke with who told him "he had been solicited to advertise on the site and that he declined but was told by the telephone sales rep that his reviews could potentially be affected if he didn’t."

Yelp played 25 - 30 calls from Yelp to this plumber (only the Yelp side of the conversations are recorded) and concluded:

There was nothing that sounded like a threat or any suggestion that reviews would be removed or otherwise altered by Yelp if the guy didn’t advertise. There wasn’t anything that could be construed as even implying that.

If you’re a true conspiracy theorist you might now be inclined to believe that Yelp edited the records or omitted key conversations. But I can tell you it did not; I listened to the entire tiresome sequence of calls.

Sterling says he believes Yelp's version of the events after being "exposed to evidence that supported it."

Phil Rozek says in the comments on Sterling's post, "Most of the time (in my experience), business owners’ complaints boil down to, 'I said no to advertising, and then my reviews started disappearing.' They wonder why reviews that initially got past the filter got filtered post facto, after the chat with the sales rep. It’s less often that they claim Yelp actually voiced something resembling a threat. I do think there are some rogue Yelp reps who gave business owners a shakedown, but I’ve seen nothing that to make me think it’s systemic."

Sterling replied to say, "One would assume that Yelp would aggressively stamp out any rogue sales people at this point to protect its reputation."

Rogue salespeople or not, Yelp's defense and Sterling's post may appear to "debunk" this particular plumber's claim, but don't really do much to do so for the common complaint Rozek speaks of.

Something else worth noting here is that Sterling is the VP of Strategy and Insights for the Local Search Association, which is described as "a not-for-profit industry association of media companies, agencies and technology providers." One of the board members for this association is Yelp Chief Revenue Officer Jed Nachman.

From a Local Search Association press release from last year:

Jed Nachman, Senior Vice President of Revenue, Yelp. Jed has been with Yelp since early 2007 and is responsible for leading Yelp's rapidly growing sales, client services, and revenue operations groups, which span across four domestic locations as well as Europe. (emphasis ours).

Since then, Nachman has been promoted to Chief Revenue Officer. This happened just last month when Yelp CEO Jeremy Stoppelman wrote:

Since joining Yelp as Head of Local Sales in 2007, Jed has built our sales organization, including client services and revenue operations, from 10 to over 2000 team members. Along the way, Jed and his team have grown Yelp revenue from $500 thousand to $500 million. He has also been an integral member of our executive team -- and helped establish our positive, energetic and highly accountable company culture. Now as Chief Revenue Officer, Jed will lead our local advertising business, take a more prominent role in company-wide planning and help push the company past the $1 billion revenue milestone.

While there are many companies besides Yelp involved with the Local Search Association (which Nachman's LinkedIn profile still says he is currently a part of), it certainly seems worth mentioning that the organization is tied to Nachman, even if Yelp didn't deem it so for its blog post on the matter, which simply refers to Sterling as a "well-known analyst and thought leader".

To be clear, I don't bring any of this up to discredit Sterling in any way. I've enjoyed his reporting on the search industry for many years. Yelp's description of him is not wrong. It just leaves out his LSA connection, which Sterling does highlight in his own bio.

In other words, I'm not implying that Sterling's report is without merit. It just seems a little disingenuous on Yelp's part to hold up a report from a guy who leads strategy for an organization with a direct connection to a guy who leads sales at Yelp as the only example of "real reporting" on this topic, especially considering that there's a feature-length documentary full of interviews expected to be released soon.

It of course remains to be seen whether the doc, titled "Billion Dollar Bully," will be able to show us any hard hitting evidence to back up the claims so many people have made, but those who have been following the story for years will no doubt be very interested to see what is presented.

Prost Production, the company behind the film did provide an update last week:

We initially thought we would be finished filming this summer, but in true documentary fashion, the story has lead us down many paths that we felt compelled to follow. With all the footage we have acquired, we have been structuring, restructuring, and structuring again the story so that it is told in the best possible way.

We thought we were done with production in November, but once again, an interview popped up that we couldn’t miss out on and were out filming just last Sunday. Now, we are 99.9% certain we are completely done! The film is near picture lock but needs a little more tweaking. In a few weeks we will be sharing a cut of the film with Kickstarter backers who contributed at the Executive Producer level. We hope to be sharing a finished project with everyone not too long after that!

Thank you again for your interest in this project. We want to ensure this story is factually-based and done correctly. It takes time to get there, especially when this is such a grassroots effort with a very small crew. It would be a disservice to all those who have participated in the making of this film (supporters, interviewees, etc) if we put out something quickly just for the sake of having a movie. We look forward to sharing details soon about when and where it can be seen.

I encourage you read Sterling's post here and check out Billion Dollar Bully when it is released, which will almost certainly present a very different side of the story.

In other Yelp news, the company announced that it has issued a new round of consumer alerts warning people about 37 businesses busted for violating Yelp policies.

What do you make of Yelp's defense? Do you expect the documentary to provide any real evidence? Discuss.

Image via Yelp (Flickr)

Chris Crum
Chris Crum has been a part of the WebProNews team and the iEntry Network of B2B Publications since 2003. Follow Chris on Twitter, on StumbleUpon, on Pinterest and/or on Google: +Chris Crum.