Yelp’s Community Strategy and Google

About seven years ago I sat with then Yahoo Local GM Paul Levine in a restaurant — it might have been in San Francisco or maybe New York — and had a conversation about how to generate more local reviews. This was before Yelp, InsiderPages, Judysbook, etc.

We discussed that developing more “community” around reviews was key. And when Yelp later launched this is exactly what it did: put a human face on reviews for trust and created community around reviews, both online and off. In fact the offline part was key to success for Yelp in the early days.

That sense of community generated momentum that built a larger body of reviews on Yelp vs. its competitors. And that reviews volume became self-perpetuating to a significant degree. Today Google is quickly amassing reviews and ratings from its own users; however they tend to be much “thinner” by comparison: stars and quick tips or one liners.

In the early days of Yelp in 2005 and 2006, you had the sense that there were real people writing the reviews. That’s the tagline as well: “real people real reviews.” There were also lots of community interaction tools on Yelp. Unlike Citysearch and Yahoo Local, Yelp had come into the world during the “Web 2.0” era and the rise of MySpace and Facebook. Community was just a part of everything you were supposed to do.

Matt McGee at SEL offers an “academic” take on why Yelp “won” and his own views about how Google is copying Yelp’s playbook with HotPot, now folded into Places.

I’ve told Yelp that Places (especially on Android) is a threat to the company in mobile because it’s a good product and so well integrated into search and Google Maps. Yelp’s long form reviews content doesn’t play as well in mobile either. However Yelp’s brand is strong and the company says that the rise of Google Places — there are reportedly now five million “reviews” on Places — hasn’t impacted it.

Yelp spurned Google’s substantial takeover offer and is moving toward an IPO. In order to successfully go public Yelp will have to show significant revenue growth. It’s not clear to me, however, whether revenue growth at this point is commensurate with the growth of consumer reviews.

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13 Responses to “Yelp’s Community Strategy and Google”

  1. Ramesh Kumar says at

    There are many who have built successful business models around reviews – the most prominent being tripadvisor.

  2. Greg Sterling says at

    Yes. Trip advisor is another example. So is Zagat — before all of them.

    I’m not trying to imply that Yelp is the only company that has succeeded with reviews.

  3. Paul Levine says at

    I remember that lunch, Greg… 🙂

    Matt’s article and the study he links to are spot-on. Yelp has unlocked a new form of self-expression (you are what you eat, and where you go) and has done a great job of attracting and nurturing a community of reviewers who are far more passionate and engaged than any other.

    This is hard for anyone to do, but is particularly hard for a larger company with established brand, product, and revenue model. Longer story as to why this is – can post more later.

    It’ll be interesting to watch Google attempt to replicate this. I wish them the best – always good for consumers and advertisers to have options – but I suspect they will run into some of the challenges we faced in building Y! Local beyond a search engine and into a true community.

  4. Greg Sterling says at

    Paul:

    Sorry I didn’t make it to the Trulia event. Was back from conferences in Europe and exhausted.

    Someone once remarked that Yelp was like a local blogging platform for its heaviest users — consistent with what you’re saying about self-expression.

  5. Nathan Chan says at

    Love the article.  Yelp is absolutely great for consumers, but it’s hard to justify to many small businesses why they should be paying $200+/month on something that’s hard to measure beyond just getting web traffic to Yelp’s site.  How many people are actually pinging the businesses because of Yelp is hard for the businesses to track themselves.  This diminishes the perceived ROI.

  6. Greg Sterling says at

    Yelp should have three products:

    1. Enhanced profile
    2. Deals
    3. Lead-gen

    It also needs to consider non-Yelp products — something along the lines of Yext PowerListings

  7. Alex Rambaud says at

    They could also consider becoming a kind of Opentable.

  8. Greg says at

    Alex…

    Hope you’re well. Yes that’s what I’m suggesting re bookings or leads. 

  9. Interesting Google Places and Local Search Articles (22-29 May) « Google Places Optimization and Local SEO says at

    […] Sites Starting to Show in Places Using hReview on Your Website Google: 40% of Mobile Searches Local Yelp’s Community Strategy and Google How Yelp Crushed Citysearch & Yahoo Local … & Why Google Is Stealing Yelp’s Playbook […]

  10. Andrew says at

    Greg –

    Great article – interesting to see whether Google’s reach will enable them to own the market.  Definitely agree that Yelp’s success in developing a community feel early on was key – they truly helped put a human face on each review.

    I think the next step is putting your friend’s face on reviews — surfacing content from your social and interest graphs to guide you to reviews you can trust more readily.

  11. Greg Sterling says at

    And social search is well underway in terms of development.

  12. Malcolm Lewis says at

    Per Andrew, Yelp (and Google and FB) need to migrate from the “wisdom of the crowd” to the “wisdom of people like me”. This has more to do with my taste/interest graph than my social graph. 

  13. Greg says at

    I very much appreciate the use of the phrase “taste graph.” 

  14. TheGodofSEO says at

    Any “reviews” which can be gamed for the benefit of the host (business) cannot be trusted, and as such, means very little when you have a few dedicated proxies and a team of Bangladeshi talking about your wonderful business.

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