Maybe it wouldn’t be so bad if Yelp fell off the face of the Internet. After all, the site is riddled with fake reviews, and the company’s practice of hiding a portion of useful, honest reviews is a big turnoff to users who just want to know if a business is worth visiting.
According to Business Insider, shares are down 56% for the calendar year, and a staggering 65% over the past 12 months. Yelp CEO Jeremy Stoppelman says that the platform’s mobile app usage is up:
Consumers are increasingly turning to apps when using their mobile phones, and we are excited about the growth we’ve seen in app usage, which accelerated to 51% year-over-year.
Overall, though, traffic has slowed down, and the web is chock full of stories of distrust by both users and businesses. Trust issues stem from many things, including:
- Yelp’s obscure algorithm that can flag truly useful reviews as “not recommended”, including ones that are detailed and written by avid Yelp users.
- The company’s automated and moderated policies still allow tons of fake reviews to be displayed. Case in point – the Yelp page for the practice owned by Walter James Palmer, the dentist identified as having hunted down Cecil the Lion. Yelp is constantly used as a platform for people seeking justice, and the company has trouble controlling the content.
- Reports by small businesses that they were encouraged to market through Yelp in order to have more positive reviews appear as relevant.
- Third-party “selling” of positive Yelp reviews, many of which appear as relevant ones.
In an article by CNN Money, Rob Enderle, principal analyst for the Enderle Group, says the controversy could be putting Yelp in big trouble.
You’ve got this cloud of distrust. The end result is that people are using it less and less. That is a going-out-of-business trend.
– Rob Enderle, Enderle Group
Questions remain. Is advertising on Yelp viable for locally-owned businesses? Can the company fix the trust issues? Independent firms have researched accusations, and Yelp has reported they’re incorrect. Yelp users, however, continue flock to business listings and flood them with reviews that aren’t entirely accurate. Maybe it’s best to sit tight and see how everything shakes out.
