Thursday, February 25, 2010

Yelp Class-Action Lawsuit Highlights the Best and Worst of Web 2.0...

If you've never used the website Yelp before, you've not only missed out on the thoughtful, often-times addictive, reviews, but you've also apparently been oblivious to their highly visible PR campaign. I've personally seen Yelp reps promoting the site at least half a dozen bars around New York City.

Well, it is those reviews - the heart and soul of the website - which lie at the center of a new class-action lawsuit against the company.

According to TechCrunch, Yelp was the target of a scathing exposé last week that accused the company of "promoting or even fabricating negative reviews in order to get businesses to pay to have them hidden or removed". Basically, Yelp employees would write negative reviews of businesses, then call up those businesses and say that for $300/month they could "buy an advertising contract" and have the reviews buried.

Yelp spokesmen have already rushed to call the accusations "demonstrably false" and plan on fighting the lawsuit.

This story highlights both the best and worst of Web 2.0. On the one hand, you've got a company that encourages people to contribute original content to the site, then seeks to manipulate that user-generated content to its own advantages, leveraging the fear of negative bias by the crowd into extortion. And fabricating reviews... this is the nightmare that detracts from the credibility of the entire Web 2.0 concept.

On the other hand, look at the reaction to this story. Ever since East Bay Express published their expose, the blogosphere has clearly been circling the wagons. So much attention has been given to the Yelp lawsuit that 1) it'll be hard for Yelp's users not to read their reviews anymore without a healthy dose of scepticism, and that could spell the death-knell for a business model that fundamentally relies on having a strong reputation, and 2) as that occurs, Yelp becomes a cautionary tale to other websites and even individual users who might consider similar actions. Bloggers have proven adept, in this instance, at regulating the space, and the lesson is clear... If you choose to take certain actions that are shady and corrupt, you will be held accountable.

Of course, the accusations against Yelp are still simply that... accusations, which may or may not ultimately be proven true. If they turn out to be false, bloggers would be wise to preserve their own reputations and shed light on that development with an equal effort.
  

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