Yelp

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Yelp is an American public company headquartered in San Francisco, California. It develops, hosts, and markets the Yelp.com website and the Yelp mobile app, which publish crowd-sourced reviews about businesses. It also operates an online reservation service called Yelp Reservations.

History

Yelp was founded in 2004 by former PayPal employees Russel Simmons and Jeremy Stoppelman. Stoppelman and Simmons conceived the initial idea for Yelp as an email-based referral network, after Stoppelman caught the flu and had a difficult time finding an online recommendation for a local doctor. The co-founders saw a gap in the market for a user-generated directory service that would allow individuals to read and write reviews for local businesses.

The website was launched in October 2004. Yelp grew in popularity, initially supported by a $1 million funding from Max Levchin, a co-founder of PayPal. In its early years, the company struggled to turn a profit and faced competition from other review websites. However, Yelp expanded rapidly, introducing new features and services, including a reservation system, Yelp Deals, and a platform for businesses to respond to reviews. By 2010, Yelp had become an influential online review site in the United States.

Business Model

Yelp's business model is based on user-generated content, which provides reviews for local businesses across various categories, including restaurants, shopping, and services. Users can create accounts to post reviews, rate businesses on a five-star scale, and upload photos. Businesses can also claim their profiles to respond to reviews and post updates.

Yelp generates revenue primarily through advertising. Local businesses can pay for advertising space on the Yelp website and app, which can include features like sponsored search results and enhanced business listings. Yelp also offers tools for businesses to offer promotions and deals to Yelp users.

Features

Yelp's platform includes several features designed to enhance the user experience and provide valuable information to both consumers and businesses:

- Reviews and Ratings: Users can write reviews and rate businesses on a five-star scale. The platform uses automated software to recommend the most helpful and reliable reviews for the Yelp community. - Yelp Reservations: A feature that allows users to make online reservations at participating restaurants directly through Yelp. - Yelp Deals: Businesses can offer special deals and discounts to Yelp users, which can be purchased directly through the Yelp platform. - Business Pages: Businesses can claim their Yelp pages to update their information, respond to reviews, and interact with customers.

Controversies

Yelp has faced criticism and legal challenges related to its review and ratings system. Some businesses have accused Yelp of manipulating reviews and ratings to favor advertisers, a claim that Yelp denies. The company has also been the subject of lawsuits alleging unfair business practices, including claims of extortion. Yelp maintains that its review filtering system is designed to protect the integrity of reviews and denies any manipulation for commercial gain.

Impact

Yelp has had a significant impact on local businesses and consumer behavior. Positive reviews on Yelp can lead to increased business for companies, while negative reviews can have a detrimental effect. The platform has also influenced the way businesses interact with customers, emphasizing the importance of online reputation management.

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