Interesting article today about Yelp and the growing dissatisfaction by businesses over the lack of transparency about how its user reviews are posted. The piece raises a bunch of interesting issues. First, and I think completely legitimate, is the confusion over just how user reviews are filtered to appear on the site. The article says that there is some sort of automatic review to weed out vindictive rants and gushy endorsements, but that automatic sorting may actually penalize businesses that truly deliver outstanding service worthy of multiple 5 star ratings from customers.

The other, and I think more interesting, point is the position that business owners are taking who also advertise on the site. Their position is that since they pay to be featured, they should be able to request the removal of an inaccurate, negative review, and want Yelp to take a more active role in investigating erroneous claims. Since they are paying the freight now for Yelp, it is a free service to consumers, they want their voices heard and actions taken.

This issue has come to the fore Yelp because the voice of the customer has now become a more powerful and credible voice than that of the advertiser. Yelp has become the “go to” resource for a lot of people looking for the customer’s view of the best pizza place or the hottest hair stylist and a lot of businesses have benefitted from this exposure. Yelp was designed to aggregate the voices of the community, which in most cases, presents a pretty balanced view of the customer’s experience and allows people to make up their own minds. Most sites like these tend toward “self-regulation - devoted customers who see a bad review often dispute it in their own write ups - and trust that people are smart enough to ignore baseless rants anyway.

Yelp’s founders and funders resist any notion that the company intervene and, in the article at least, describe the business owner those with the “skin in the game and therefore the least credible source” for information about their business and customer experience. Seems a bit extreme so it will be interesting to see how Yelp deals with this over time. Tick off the business owner too much by painting them as the evil arbiters of their reputations, and they will take their ad monies elsewhere, which in platform-speak means that the “money-side” of the business will walk. That would not be good. Tick off the consumer by editing customer feedback and they’ll flock to other sites (Facebook?) for advice and advertisers will still leave since the eyeballs wont be there to support their ad buys. That also would not be good. And then there is the whole business model question. Why should Yelp be a free service anyway? Zagat’s has done a pretty good job of charging people for access to users’ opinions and ratings. Why has Yelp decided to approach the business from a different angle?

So, the big question, if you were advising Yelp’s CEO – what would you recommend?