Yelp, Inc.


  • Jeremy Stoppelman (CEO)
  • Russel Simmons ( CTO)
  • Geoff Donaker (COO )

Yelp, Inc. is an American Internet company that operates a recommendation portal for businesses and locations. The company was founded in 2004 by Jeremy Stoppelman and Russel Simmons, Yelp and their website was revised in February 2005 with a focus on user-generated reviews. Between 2005 and 2010, Yelp received a capital of 130 million U.S. dollars in 2012 and became a public company in the U.S. stock market. The company generates revenues through advertising for businesses on its website. His internet rating system for commercial items has been the subject of controversy and litigation.

  • 3.1 search Engine
  • 3.2 Advertising
  • 3.3 Online Offline Community
  • 3.4 User rating filter
  • 3.5 Criticism and Privacy Policy


2004: Concept and creation

Yelp Inc. has evolved from a business incubator called MRL Ventures, founded by Max Levchin and several former PayPal executives. Stoppleman suggested a website where users could ask friends about their recommendations for local services via e- mail, and Levchin was willing to invest one million dollars in the project. MRL Co-founder David Galbraith, who initiated research on a product on the type of Internet Yellow Pages, suggested the name " Yelp ". The project was then launched in 2004.

2005-2010: Development and expansion

2005 Yelp Inc. began its website to expand features of social networks and established a group of super- users called The Yelp Elite one. The number of reviewers increased from 12,000 in 2005 to 100,000 in 2006, reviewers, and by 2007 the site had received a million reviews from visitors of shops. In 2008, the number of visitors rose to fifteen million visitors per month.

In October 2005, received Yelp Inc. a 5 million dollar venture capital financing of heavy Bessemer Venture Partners to fund its expansion on the markets New York City, Chicago and Boston. In October 2006, Benchmark Capital invested 10 million U.S. dollars, followed by an investment of 15 million U.S. dollars from DAG Ventures in February 2008. Received Yelp Inc. In January 2010, 100 million U.S. dollars of venture capital Elevation Partners, which the sales team was expanded.

2008 Advanced Yelp Inc. its website with new features that allow business owners could manage their own entries, and presented his first iPhone app before. Yelp websites were for Canada ( 2008), UK ( 2009), France (2010), Germany (2010 ), Australia (2011 ), Denmark (2012 ), Turkey (2013 ), New Zealand (2013 ), Brazil ( 2013), the Czech Republic (2013 ) and Spain (2013 ) launched. In August 2009 came out an update to the iPhone app from Yelp with a hidden Easter egg feature called Monocle, which could Yelp reviews about the camera view of the iPhone superimpose and was considered the first augmented reality Handyapp for the iPhone.

In December 2013 Google has begun negotiations with Yelp Inc. about a takeover of the company, but the two parties could not agree. According to the New York Times, Google had offered more than 500 million U.S. dollars, but the business had burst after Yahoo had offered 1 billion U.S. dollars. Tech Crunch reported that Google had refused the same as Yahoo has to offer. As a result, the management and the Board of Directors of Yelp Inc. failed to reach agreement on the terms of sale so that both offers were not pursued.

San Francisco, where Yelp was founded, remained (as of 2008 ) the most active, but Yelp has also been used in 18 other metropolitan areas, including Boston, Chicago, New York, Washington, DC, San Diego and Los Angeles to a considerable extent. The site had more than 4,000 entries rated restaurant in San Francisco, some of them, each with hundreds of reviews. Yelp reportedly has 108 million visitors per month and a total of 42 million users reviews. The reviews had been estimated by the CEO, 85% a positive trend and most likely originated predominantly from the population group of 26-35 year-olds.

In January 2010, Yelp Inc. introduced an Internet - Eincheckfunktion, which brought the company into competition with the social network Foursquare. In June this year, the restaurant reservation function of OpenTable went on in the website.

In September studied two economists of the Univesity Berkeley 300 restaurants in San Francisco and correlated their nightly reservation numbers with their rating on Yelp. Through online reservation data from July 2010 to October 2010 they came to the conclusion that an improvement of 3.5 to 4 stars led to an increase of 19 percentage points at the 19 - clock - bookings. In the same month, an assistant professor at Harvard Business School published an analysis in which he dates all in Yelp -rated restaurants in Seattle, Washington from the period 2003-2009 used, and came to the conclusion that an improvement in the rating of a restaurant on Yelp led by a star to a sales increase of 5% to 9 %.

2011 to present: development and IPO

Since April 2011, offers a service called Yelp Inc. Yelp Deals. In June, the service for the Android and iPhone apps became available. By August Yelp Inc. had reduced the frequency of its Yelp Deals due to increased competition and market saturation and planned to halve its sales staff in the field Yelp Deals.

In September of this year, Yelp Inc. acted with respect to alleged anti-competitive practices by Google in the investigation of the Federal Trade Commission. Yelp Inc. claimed that Google Places is leveraging its web content, without specifying the source. Yelp claimed, moreover, that Google in its consumer search engine Google Places prefer compared to the Yelp website.

In November of this year, Yelp Inc. opted for an IPO. According to the documents filed with the United States Securities and Exchange Commission, the company had despite higher by 79.9 percent annual turnover not generated any profit. On 2 March 2012, the trading of the shares of the company on the New York Stock Exchange began at a price of 15 U.S. dollars. The market capitalization amounted to 898 million U.S. dollars. The more than 110 million U.S. dollars, which were taken with the IPO, helped to finance the rapid expansion in the U.S. market as well as in international markets.

The contents of the Company web site has been included in the map and description of way in the app published in September 2012 iOS 6 version from Apple. The company reported in November 2012, 45 % of Internet traffic came from mobile devices. In the same year agreed Yelp Inc., the acquisition of its largest European competitor Qype for 50 million U.S. dollars. The following year, Stoppelman reduced his salary as CEO on 1 U.S. dollar and receives his payment then bill out of his stock options.

2013 took over Yelp Inc., the online booking company SeatMe, a startup, for 12.7 million U.S. dollars in the form of cash and company shares. Since the same year, the company provides the opportunity for food ordering and delivery and shows results of restaurant hygiene inspections on the Websiete to. According to an article by CNN in September 2013, the turnover of Yelp Inc. has exceeded expectations in the second quarter, but could, like many other Internet darlings still generate a profit.

Employees and corporate culture

2012/13 referred Yelp its new corporate headquarters and is there nearly 14,000 square meters, 12 storeys address 140 New Montgomery ( the former PacBell Building) in San Francisco. The sales staff of the company are located in the U.S. cities of San Francisco, New York City and Scottsdale, Arizona. Among the international locations include Hamburg and London. The corporate culture of the company includes casual clothing, a non-hierarchical structure and an egalitarian arrangement table in the open-plan office. For organizational meetings, employees are encouraged each rank to comment. Leisure activities include computer games, a pool table and a snack area. The company recruits new employees active in universities.

Internet services and features

Has the company's website by January 2013 more than 100 million unique users per month, with 30 % of the requests from the mobile Internet come. According to the founder of Sterling Market Intelligence 's website Yelp Inc. is both for business owners and consumers one of the most important Websieten the internet.

Search Engine

The company's website offers specialized search functions and provides information about business in a certain predetermined by the Address or postcode area. Each paid entry of a transaction contains a filtered 5 - point rating, filtered reviews from other visitors to the website as well as details such as address, opening times, disabled access and parking. Visitors to the website can update records of transactions with the permission of the moderator and business owners can directly access the data from their entry and update them. The entries include shops, service providers, cultural venues, public places and more. The sites and features of Yelp are available for many mobile devices. The company has released in August 2007 application programming interface (API) that enables developers to use data from the business records of Yelp in third -party applications.


The skin source of income of the company is business solicitation on his Webseeite Yelp, including the preferred placement of search results and special features include entry. In August 2013 80 % of sales of Yelp Inc. of Seller's extensions and the charges came on his website. A further 15 % of revenues were from advertising revenues domestic companies at a measured 77% per year advertising growth. As of 2013, the staff of Yelp Inc. was about half from advertising sellers.

Online-offline community

The company website Yelp is using reviews of users and social networks to the Internet community. The functions of a social network that allow visitors to the website, the popularity, the community status, company reviews, and interests of each author to see a review. Yelps marking " Erstbewerter " peer feedback mechanisms and priority placement for popular reviews aim to motivate the authors of book reviews. In addition, business owners can communicate using private messages or public comments with their reviewers. Yelp requires that authors of reviews sign up to, and encourages them to publish their real name and a photo. This creates a participatory culture in which users share their personal insights and suggestions and thus give the local shops a collective feedback. In addition, the website has an online forum where you can discuss about local businesses and events.

One of the actions of the company to strengthen its user community include events in nightclubs, bars, restaurants and cultural venues for its "elite" members in different cities. Elite status reaches a reviewer by writing useful and entertaining reviews that win the approval of others.

User rating filter

Since its founding in 2004, Yelp Inc. with an "aggressive " has filters for user reviews used, which has the aim of isolating reviews that are either unhelpful or where to suspect that they biased in one way or another, or maliciously are. Therefore, 25 % of incoming on the company's website User reviews are isolated and placed in a second location of the website. The filter is an algorithm in a " highly sophisticated software system ", which excludes many user reviews from the calculation of the number of stars to rate this dealer on the Yelp website.

Criticism and Privacy Policy

In May 2012, the Foundation Warentest criticized that the Yelp app will not ship without being asked all e -mail addresses anonymous. Further criticism was that the use of statistics has been sent to your own server.

Controversies concerning reviews

Over long periods of its history was Yelp Inc. in the focus of criticism from some of its business customers, who claimed that Yelp Inc. its website and user reviews manipulated on the basis of whether this business is advertising customer of Yelp or not. Yelp Inc. denies this and has expressed his dissatisfaction with business owners, asked friends and associates to add reviews or "fake reviews" bought.

Complaints of transactions were reported in August 2008 by ABC News. 2009 reported the East Bay Express, you have spoken to " dozens " local business owners. Six of them have reported that sellers of Yelp Inc. had agreed "to delete negative reviews [ from their Yelp profile page on the internet] or remove " if they would advertisers. The article also reported that yelps CEO had said: " Advertisers and sales representatives can not remove or delete negative reviews". Additional allegations of several business owners have been reported in a follow-up article a month later.

Beginning of 2010, a class action lawsuit against Yelp was filed. It was alleged that Yelp had asked a veterinary clinic in Long Beach, monthly pay $ 300 for advertising services, which also include the suppression or deletion of customer reviews, " denigrating the clinic ." The following month, nine additional companies joined the class action and " two similar complaints " were filed. Yelp denied that its sales staff performing pressure on other companies. In response to the complaints Yelp changed his " Review Guidelines " and introduced in April 2010, new features, in order to avoid misunderstandings on the part of business owners. To improve the transparency of the evaluation process Yelp ceased to offer commercial advertisers the option to show a positive assessment in the first position. These complaints from the year 2010 were " potential class action " combined into one, which was dismissed by Judge Edward Chen to the U.S. District Court of San Francisco, 2011. Despite objections of counsel for the plaintiff Chen decided that yelps choices for the display of user reviews on his website by the Communications Decency Act were covered, the Internet company defense against liability for user- generated content. In July 2013, the applicants submitted on 9th district appeals court in San Franscisco an appeal.

In August 2012, two business owners from New Haven alleged in the State of Connecticut, Yelp had positive reviews removed after they had refused to buy advertising. In October Yelp led to a system for " detection of a company that buy positive note reviews". An article on ABC News announced its own list of companies who offered to pay for the publication of positive reviews on the Yelp website. In November, CBS Denver reported the complaint of a small businessman over Yelps system to filter reviews. In October 2012, we launched Yelp Inc. for 90 days consumer warnings for approximately 150 companies on its website who were guilty after Yelps research that I have paid for user reviews money.

2013 upheld a California court Yelps right to the continued use of his " aggressive " and " automated review filter " with the aim of, false or not factual appropriate company reviews not help to eliminate open specified criteria. Yelp defended in 2011 in a similar case ( Levitt vs. Yelp ) successfully. In June 2013 filed a lawsuit against Yelp Inc. BuyYelpReview / AdBlaze and accused the company, " Yelp reviews from unknown accounts to unknown third parties " to sell. In July, the International Business Times reported that the company will continue is criticized outside the courtrooms, and that "takes up a sentiment against Yelp to get on the Internet and in social media." The article also reported that nearly 700 complaints against Yelp were received by the Federal Trade Commission over the past 4 years. In August Yelp Inc. conducted a series of meetings in the style of public meetings in major U.S. cities to discuss misunderstandings local business owners. Yelp supported the prosecutor's office of the U.S. State of New York in an investigation that led to around 19 companies, 'The Bogus reviews for small business written, which in turn paid for it, " fines of U.S. $ 350,000 were imposed. In September ranged Yelp Inc. filed a complaint against a lawyer from San Diego one, who had previously led a lawsuit against Yelp, and put the lawyer alleged that he " instructed his staff that [ Yelp ] to write reviews [ his company ] and that he belonged to a group of lawyers, mutually valued to [ yelps on website ]. "

Munich newspaper described the case of a Munich restaurant owners, who initially wanted to not show ads for Yelp for his Chinese restaurant in December 2013. He reported that the (majority ) positive contributions have disappeared from the pool of recommended assessments in the order on the website of Yelp, which led to a massive loss of guests.