Everyone's a critic at Yelp.com

Jeremy Stoppelman

Editor's note: Jeremy Stoppelman, Yelp.com co-founder and chief executive officer, will deliver a keynote address during the Real Estate Connect conference in San Francisco next week. The conference runs from Aug. 5-7. Click here for program details.

Everyone's a critic, or so the saying goes.

And that saying is the basis of the business model at Yelp.com, an online community that features user ratings and reviews on a wide range of businesses and professionals -- including real estate brokerages and agents.

In July 2004, former PayPal pals Jeremy Stoppelman and Russel Simmons reunited to launch Yelp.com.

"The inspiration for the site was the idea that word-of-mouth recommendations are the best way to find local businesses," said Yelp Chief Executive Officer Stoppelman in a recent interview with Inman News.

The original version of the site had a component for user-generated reviews, but it was more focused around users asking members of the online community for recommendations.

"We didn't think necessarily that people would take the time to share all that great local information unless they were asked a question," he said. "Buried in there was a way to write a review. What we found, for certain people, (they got) addicted to that feature. In one sitting they would write five or 10 reviews."

The site relaunched in February 2005 to capitalize on that review-writing aspect of the site, which he said was more straightforward: "I can finally be a critic; I can practice my writing chops."

About 22 million people visited Yelp.com in May, the company reported, and Yelp community members, or "Yelpers," have written more than 6 million local reviews.

Based in San Francisco, the site initially focused on that market area and has since spread to major metro area across the country, including Los Angeles, New York, Chicago, Miami, Honolulu, Denver, St. Louis and Seattle. The company also operates internationally, with reviews for businesses in Canada, England and Ireland.

As Yelp moves into new markets, Stoppelman said the company typically brings aboard a community manager who supports the users in that market area -- the site now publishes a "Weekly Yelp" for 28 cities that offers up information about business openings and events.

"It has really been a city-by-city approach from the beginning," said Stoppelman. "It's not that dissimilar to Craigslist. It's mostly valuable to the locals in that city -- each market is really it's on microcosm." San Francisco, Los Angeles, New York and Chicago are among the areas with the most active Yelpers, he said.

Popular reviews and reviewers, as restaurateurs and movie directors well know, can be a double-edged sword for business.

Professional critics had long wielded that sword without much competition, though the rise of social media and user-generated content on the Internet has put that sword -- or lots of little swords -- into the hands of the masses.

Yelp has become part of the vernacular for business searches among its core demographic -- which Stoppelman said is tech-savvy, post-college 22- to 40-year-olds. The site is also finding a growing audience among older adults, he said. And it's increasingly common in some markets to hear "I 'Yelped' that restaurant," which depending on the context could mean that the person wrote a review about a restaurant or looked up the reviews on that restaurant using Yelp.

"I think we live in a new age of transparency," said Stoppelman, "which is a great thing if you're fantastic at customer service. Customer service is the new marketing. If you're a real estate professional who is doing a fantastic job pleasing your customer, some subset of them might take the time to write a review.

"By the same token, if I had a bad interaction -- (the professional) pushed too hard on a customer, that opinion can end up out there as well. The important thing to remember is the big picture: One person's opinion is one opinion. Even if there is a comment that is less than glowing, take in that whole picture. One particular person might have a problem, but not everyone did." ...CONTINUED

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