Yelp, Inc.

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Yelp, Inc.
Type Private
Founded October 2004
Headquarters San Francisco, CA
Key people Jeremy Stoppelman, Co-founder/CEO, Russel Simmons, Co-founder/CTO, and Geoff Donaker COO
Industry Business ratings and reviews
Employees 150+[1]

Yelp, Inc. is a Web 2.0 company that operates a social networking, user review, and local search web site of the same name. Over 25 million people access Yelp's website each month, putting it in the top 100 of U.S. Internet web sites.[2]



Yelp was founded by Jeremy Stoppelman and Russel Simmons, both of whom were early software engineering employees at PayPal[3]. After an aborted start as an email recommendation service,[4] Yelp launched its namesake web site into the San Francisco market in October 2004[5]. The company received $6 million in early funding from venture capital firms Mission Street, led by another former Paypal-er Max Levchin, and Bessemer Venture Partners. Additional investments were made in the amounts of $3 million by Benchmark Capital in 2006[6] by DAG Ventures ($3 million) and a private Investor from Laguna Beach ($5 million) in 2008.[7] Yelp expanded from its San Francisco roots to open an east coast office in Manhattan[8] in the first half of 2008 and by introducing a Canadian-focused version of the site in 2008.[9] As of 2008 Yelp's pageview count overtook its predecessor and early rival, Citysearch. [10][1] Revenues were approximately $30 million for 2009, with $50 million in 2010.[11]

On December 17, 2009, TechCrunch reported that Yelp was in "advanced" negotiations for Google to buy the company for more than $500 million.[11][12] By December 21, the same source was reporting that Yelp's CEO had rejected the Google offer.[13]

Products and services

Local search

Yelp provides online local search capabilities for its visitors. A typical search includes what the user is seeking (e.g. a barber shop) and the location from which the search is to be performed, entered as a specific address, neighborhood, city/state combination, or zip code. Each business listing result contains a 5-point rating, reviews from other site visitors, and details such as the business address, hours, accessibility, and parking. Site visitors can aid in keeping the business listings up to date, with moderator approval, and business owners can directly update their own business' listing information.[14]

Listings and related content are organized by city and a multi-tier categorization system. Content and listings can also be discovered through categorized reviews or via Yelp member profiles and their review lists. Maps leveraging Google Maps show reviewed businesses to further aid in business discovery.

Information can be accessed by web or mobile browsers.


Yelp combines local reviews and social networking functionality to create a local online community.[15][16] Adding social web functionality to user reviews creates a de-facto reputation system, whereby site visitors can see which contributing users are the most popular, respected, and prolific, how long each has been a member, and which have interests similar to theirs.[17] Strong peer feedback mechanisms and the featured placement of popular reviews on the site and in local newsletters help motivate contributors.[18] Yelp also applies a "First to Review" reward system to create a competition among contributing members, further motivating the creation of reviews and adding to the site's business coverage.

The company strengthens the online community through off-line events at nightclubs, bars, restaurants, and cultural venues in various cities for its most prolific and loyal contributors, named "Elite" members on the site.[4][19] These members must provide a photo and their real name, be at least 21 years of age, and in return receive a special badge on their personalized page for every year they author a specific number of reviews. The concept is meant to indicate that the user is a trusted author of business reviews.[20] To gain Elite status, it is often helpful to be nominated by other Elite users but recognition is bestowed when one writes useful, funny or cool reviews so members can vote on those reviews.[21]

The site also has a forum for online socialization and to discuss local businesses and events.[22]

A number of competitors emulating these Yelp concepts have failed or were acquired.[14][23][24]


The Yelp sites have listings for businesses throughout the United States and Canada and accept reviews of any business or service.[3] Listings vary widely in nature with the site including listings for storefronts such as restaurants and shops; service businesses such as doctors, hotels, and cultural venues; and non-business locations such as schools, museums, parks, and churches.[25]

San Francisco, the home city, remains the most active as of 2008, with significant adoption in 18 metro areas including Boston, Chicago, New York, Washington, D.C., San Diego, and Los Angeles.[1] San Francisco usage has earned the site over 4000 reviewed restaurant listings, some with hundreds of reviews each.[1] The site boasts of having over 2.3 million reviews overall as of February 2008.[7] Reviews trend 85% positive as estimated by the CEO[16] and are thought to come primarily from the 26-35yo demographic.[22]


Yelp released a free REST- and JSON-based application programming interface (API) in August 2007.[14] The API provides access to business listing details, reviews, photos, and ratings and can be used to add business information to a website, widget, or mobile application.[26] The API has been used to integrate business reviews into existing Google Maps applications such as on and

Facebook Beacon integration

In December 2007 Yelp implemented Facebook Beacon. Changes to the site privacy policy were made to accommodate this feature, which experienced some negative press at the time.[27]

Advertising program

Businesses may advertise with Yelp for preferred search result placement and extra listing features. For the advertising fee, the business may include an individualized message and photo slide show onto the web page for its listing as well as receive reports on listing traffic.[28] Additionally, these advertisers, called "Sponsors" on the site, are allowed to highlight a specific review and communicate with reviewers.[1][14]



Yelp has been criticized over the fairness of negative reviews on the site. Among other sources, the anonymous nature of the Internet allows competitors to disparage one another by creating illegitimate negative reviews on their respective profile pages. Yelp states that it will not censor user comments, although it does remove favorable and unfavorable reviews that are considered "suspicious".[29] Some small businesses have said that Yelp salespeople offered "to hide negative customer reviews of their businesses" in exchange for advertising sponsorship contracts, a practice Yelp denies.[30]


There have been several lawsuits filed by business owners against reviewers. On November 3, 2009, a Yelp user was confronted by the owner of a bookstore in San Francisco at his home. The user had posted a review criticizing the store and received a string of angry messages towards him, which he revealed through screenshots. He called the police, who arrested her, and obtained a restraining order.[31][32]


  1. 1.0 1.1 1.2 1.3 1.4 "Restaurants Learn to Yelp". San Francisco Business Times. 2008-06-27. Retrieved 2008-07-01. 
  2. " (rank 88) - Web Site Audience Profiles from Quantcast". Quantcast. 2008-07. Retrieved 2008-08-19. 
  3. 3.0 3.1 "'Yelpers' review local businesses". USA Today. 2007-06-12. Retrieved 2008-08-19. 
  4. 4.0 4.1 O'Brien, Jeffrey M. (2007-07-10). "Business paradigm shifts and free tequila shots". Fortune,CNN Retrieved 2008-08-20. 
  5. Orlowski, Andrew (2004-10-13). "Yelp! A viral recommendation system you can't resist?". Register. Retrieved 2008-08-19. 
  6. "City guide Yelp raises $10M in second round". San Francisco Business Times. 2006-10-05. Retrieved 2008-08-19. 
  7. 7.0 7.1 "Yelp yanks another $15 million". CNET 2008-02-27. Retrieved 2008-08-19. 
  8. McCarthy, Megan. "A Mighty Yelp! Review Site Gets $15M". CondéNet, Inc. Retrieved 2008-10-01. 
  9. Jensen, Michael (2008-06-05). "Yelp bringing local reviews to your iPhone and the World". Retrieved 2008-10-01. 
  10. McNeil, Donald G. (2008-11-04). "Eat and Tell". New York Times. Retrieved 2008-11-06. 
  11. 11.0 11.1 Michael Arrington (2009-12-17). "Google In Discussions To Acquire Yelp For A Half Billion Dollars Or More". Techcrunch. 
  12. Todd Bishop (2009-12-18). "Google and Yelp working on deal: Will Microsoft put up a fight?". TechFlash. 
  13. Caroline McCarthy (2009-12-21). "Yelp bails on Google deal?". CNET. 
  14. 14.0 14.1 14.2 14.3 Nick Gonzalez (2008-04-28). "Yelp Lets Businesses Fight Back". TechCrunch. 
  15. "Two Wrongs Make a Right". PC Magazine. 2005-12-26.,2817,1905864,00.asp. 
  16. 16.0 16.1 Seth Sutel (2007-07-03). "For Latest Reviews, Chefs Look Online". Associated Press. 
  17. Joshua Porter (2008-06-25). "Social Design Patterns for Reputation Systems:An Interview with Yahoo's Bryce Glass (Part II)". 
  18. Saul Hansell (2008-05-12). "Why Yelp Works". New York Times. 
  19. McCarthy, Caroline (2007-06-22). "Social networks geared for offline success?". CNet News. Retrieved 2008-08-19. 
  20. "Understanding Community Leadership: An Interview with a Member of Yelp’s "Elite"". 2008-05-28. Retrieved 2008-08-20. 
  21. [ttp:// / "Yelp Elite Squad"]. ttp:// /. Retrieved 2009-10-06. 
  22. 22.0 22.1 Heather Maddan (2006-06-18). "Casting the Net:Yelp is on the way". San Francisco Chronicle. 
  23. Michael Arrington (2007-10-23). "Judy's Book To Shut Down. Yelp Is The Last of The Local Review Sites Still Standing". TechCrunch. 
  24. Matt Marshall (2008-02-27). "Citysearch snaps up Insider Pages in local search race". VentureBeat. 
  25. "Yelp Sales Pitch". The Register. 2008-08-13. Retrieved 2008-08-20. 
  26. Yelp Review Search API
  27. Perez, Juan Carlos (2007-11-30). "Facebook's Beacon More Intrusive Than Previously Thought". PC World. Retrieved 2008-08-20. 
  28. Pavini, Jeanette (2008-08-05). "Business Owners 'Yelp' About Internet Ratings Site". CBS 5. Retrieved 2008-08-20. 
  29. Pavini, Jeanette (2008-08-05). "Business Owners 'Yelp' About Internet Ratings Site". Retrieved 2008-08-26. 
  30. Kathleen Richards, Yelp and the Business of Extortion 2.0, East Bay Express, February 18, 2009, Accessed October 21, 2009
  31. Farooq, Sajid (2009-11-04). "San Francisco Bookstore Accused of Violent Yelp Confrontation". Retrieved 2009-11-04. 
  32. Aileen Yoo (2009-11-05). "Nasty altercation between Yelp critic, bookstore owner". San Francisco Chornicle. 

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