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April 06, 2010

Yelp's new idea

Yelp!, the local business user-contributed review site, has a well-known set of manipulative incentive problems. First, businesses might want to write overly positive reviews of themselves (under pseudonyms). Second, they might want to write negative reviews of their competitors. Third, they might want to pay Yelp to remove negative reviews of themselves. This last has received a lot of attention, including a class action suit against Yelp alleging that some of its sales people extort businesses into paying to remove unfavorable reviews.

Yelp has always filtered reviews, trying to remove those that it suspects are biased either too positive or too negative. But of course it makes both Type I and Type II errors, and some of the Type IIs (filtering out valid reviews) may be at the root of some of the extortion claims (or not).

Yelp has now made a rather simple, but I suspect quite favorable change: "http://mashable.com/2010/04/06/yelp-extortion-claims/"it is making all filtered reviews visible (on another page). This transparency, it hopes, will let users see that it is even-handed in its filtering, and that its errors are not themselves biased (or influenced).

Embracing transparency is a strategy that seems to work more often than not in this Web 2.0 age of the Internet. I think it will here. Most folks will never bother to look at the filtered-out reviews, and thus will rely on the very reviews that Yelp thinks are most reliable. Those who do look, if Yelp is indeed being even-handed, will probably find the filtering interesting, but will ignore these reviews in choosing which business to frequent. The main risk to Yelp is likely to be that imitators will better be able to reverse-engineer their filtering formulae.

Posted by jmm at April 6, 2010 12:57 AM

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