Home Forums Yelp’s Business Model


This topic contains 0 replies, has 1 voice, and was last updated by  David Mihm 5 years ago.

Viewing 1 post (of 1 total)
  • Author
  • #19208

    David Mihm

    Mike recently wrote about the folderol around the Union Street Guest House–the B&B on the Hudson River charging guests $500 if they left a negative review. Yelpers were incensed and over 3000 of them took to leaving negative reviews for the B&B…which Yelp promptly filtered and incited ire against Yelp.

    I hadn’t intended to leave such a long comment, and I’ve been meaning to write a longer article about this for a long time…but I thought in the meantime I’d leave the gist of my thoughts here and open it up for discussion. What do you guys think?


    This situation (and one specific comment above) highlights the incredible vulnerability of Yelp’s entire business model.

    1) They are now in a position where they have to please two “customers” and now NO ONE is happy with their review filter.

    2) The reviewer who notes above dials this in even further — reviewers think they are Yelp’s customers. Because Yelp has coddled them and wined and dined their elite and encouraged all of this long-form, time-consuming, look-how-clever-my-reviews-are attitude. But Yelp makes exactly $0.00 per review. Their actual customers are business owners. Who have had a negative perception of them for a long time.

    They cannot continue to serve two masters and be successful, IMO. In a pure marketplace where they are the middleman, sure, this works. Yelp is not a pure marketplace. And its margins on transactions–should they decide to go that direction–will never equate to their current $600 CPM to SMB advertisers.

Viewing 1 post (of 1 total)

You must be logged in to reply to this topic.