Yelp Gets Bad Reviews From Small Biz Owners at Heated Town Hall

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A Yelp sticker. The review site has come under fire by small businesses who question its business practices.
Yelp is giving small business owners a chance to air their concerns about the review site in a series of town halls across the country. And it turns out some these restaurateurs and small business owners have a bone to pick with the way Yelp does business.

On Tuesday, Yelp (YELP) held its latest town hall in Los Angeles, with a panel of company representatives and friendly small businesses fielding questions and discussing ways to use Yelp. The idea, in part, was to reach out to a small-business community that often feels victimized by unfair reviews, as well as what some say are aggressive sales tactics by Yelp.

But the forum didn't go exactly as planned for Yelp. As the Los Angeles Times reports, company representatives found a hostile crowd waiting for them:

Many slammed the company for allowing reviewers to post inflammatory comments - one restaurant manager said she cried for three days after a Yelper wrote that her restaurant was filled with Nazis. Others said they had been subjected to aggressive advertising calls from Yelp.

Vintage clothing shop owner Reiko Roberts said the advertising pressure amounted to extortion. She said that when she declined to buy ads, "the lower reviews go to the top and the higher reviews go to the bottom."

That's a charge that's been leveled at Yelp numerous times in the past, and which the company has repeatedly denied. The issue lies largely with the site's filter, which seeks to exclude reviews from suspicious or unproven reviewers in favor of reviews from established users.
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Yelp has also sought to bring purity to the review process by going after businesses that try to buy positive reviews for themselves. But as the hostile reception makes clear, a lot of business owners feel that these systems work largely to their disadvantage, burying positive reviews and elevating negative ones.

It's hard to say how many of these complaints are legitimate, and how many are just sour grapes from business owners angry about negative reviews. But there's no doubt that Yelp has a public-image problem among its most crucial users -- the businesses that pay to advertise on the site.

So far, though, it doesn't seem to be hurting Yelp too badly: Since going public last spring, its share price has more than doubled.

Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at, and follow him on Twitter at @Brownellorama.

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