Skip to main content


ICYMI- Yelp Pushes Through The Controversies With Big Growth And A 5-Star Quarter

Yelp Pushes Through The Controversies With Big Growth And A 5-Star Quarter
Posted 2/7/2014 8:00:00

Whether you think it’s a great business tool or you think it’s killing your business, Yelp appears to be unstoppable, and continues to grow substantially. This week, the company released its earnings report for the fourth quarter and full year 2013, and revealed that cumulative reviews have grown 47% from the same time the previous year to 53 million, while average unique monthly visitors grew 39% to 120 million. Active local business accounts grew a whopping 69%. That’s not to mention the 72% revenue increase.

The company performed so well, its stock surged, while other Internet companies like Twitter and LinkedIn saw their shares fall upon earnings releases this week. Barron’s says Yelp had a “five-star Q4″.

The release came just after a widely followed legal battle involving Yelp reviews came to a close. A building contractor sued a Yelp reviewer for defamation after she accused him of damaging her home and stealing from her. Ultimately, a jury decided both parties had defamed each other, and neither was awarded damages. The business owner expressed “shock” at the outcome, while the reviewer considered it a victory for free speech.

Last week, Yelp posted on its blog encouraging users not to be afraid to leave negative reviews, pointing out that these kinds of suits are rare.

“But despite this press hype, it’s important to keep in mind that the First Amendment guarantees the rights of consumers to express their opinion about a business and honestly describe their experience,” wrote Yelp Senior Director of Litigation Aaron Schur. “These strong protections are why these suits are unlikely, especially when a reviewer has thoughtfully shared their views (Yelp provides guidance on how to do this in our Content Guidelines). We find the most useful reviews include a rich narrative, a wealth of detail and perhaps a helpful tip for others who are looking to spend their hard-earned money at that local business.”

He said, “Businesses that try to sue their customers into silence rarely prevail, end up wasting their own time and money and usually bring additional, unwanted attention to the original criticism (a phenomenon known as the Streisand effect). Many states (though, unfortunately not Virginia) have laws designed to further protect consumers from being intimidated or silenced by these types of lawsuits. These Anti-SLAPP laws allow consumers to quickly end meritless lawsuits and require the business to pay the consumer’s legal fees when the business loses.”

Anti-SLAPP law is a focus of new Yelp efforts in Washington. The company hired lobbyist Laurent Crenshaw, who is lobbying for the cause, which would prevent strategic lawsuits against public participation.

This week, Yelp also became part of the Internet Association, also aimed at helping shape Internet policy. It includes Airbnb, Amazon, AOL, eBay, Expedia, Facebook, Gilt, Google, IAC, LinkedIn, Lyft, Monster Worldwide, Netflix, Practice Fusion, Rackspace, reddit,, SurveyMonkey, TripAdvisor, Twitter, Uber Technologies, Inc., Yahoo!, and Zynga.

“Yelp is a welcome and notable addition to The Internet Association. Yelp is a perfect example of how the Internet has transformed small business for the better and how the Internet provides economic value throughout the economy. Yelp’s listings, ratings and reviews have revolutionized the way consumers find businesses and the way small businesses do operate,” said Michael Beckerman, President and CEO of The Internet Association. “With 85 percent of consumers reading online reviews to find local businesses, Yelp’s online review service brings consumers closer to small businesses and local economies. Having them share their story — and advocating for issues like anti-SLAPP and protecting free speech online — strengthens The Internet Association’s voice as we educate policymakers on the impact of the Internet upon communities worldwide.”

The Virginia case and Yelp-related lawsuits in general were brought up in the Q&A portion of the earnings call, and CEO Jeremy Stoppelman indicated that suits have basically done nothing to hurt its business. He said Yelp continues to see great user engagement, and that the company does everything it can to protect free speech online (the company was recently ordered to identify anonymous reviewers). According to Stoppleman, the number of cases it sees for its site is “extremely rare.”

“They just don’t impact our business,” he said.

Fortune appears to be shining on the company this week. In addition to its own stellar financial performance and subsequent reaction from investors, the EU announced what could be the end of a lengthy antitrust probe into Google’s search business, and the concessions the search giant is making include what could amount to a great deal more traffic for Yelp in Europe.

On some types of search results, like local business queries, Google will highlight three alternative sites to find results at the top of the results page. As you can see below from the example the EU provided, this includes Yelp. That gives the company a great deal more visibility in the search engine. As the company discussed on the earnings call, international expansion – especially in Europe – is one of Yelp’s top priorities.