Yelp is one of the slimiest and most useless dot coms around.
It’s got one real reason for existing, reviews, and so it’s got one, not-so-hidden business model.
The class action lawsuit, being led by investor Joseph Curry, focuses on Yelp’s “first-hand” reviews. The suit says Yelp required businesses “to pay to suppress negative reviews,” and then lied about the practice.
Algorithms purportedly designed to screen unreliable reviews did not comprehensively do so, and instead, the Company allowed such unreliable reviews to remain prominent while the Company tried to sell services designed to suppress negative reviews or make them go away;
Yelp allegedly made its millions by hiding the fact that some of that money came from extorting businesses with bad reviews. And that lack of transparency allegedly allowed company insiders to earn more than $81.5 million from “insider trading proceeds.”
Dining is doing badly now. And Yelp is doing badly.
Yelp’s stock an online directory for discovering local businesses, has declined around 45% since the end of 2017.
Time to jump on the Black Lives Matter bandwagon.
Communities have always turned to Yelp in reaction to current events at the local level. As the nation reckons with issues of systemic racism, we’ve seen in the last few months that there is a clear need to warn consumers about businesses associated with egregious, racially-charged actions to help people make more informed spending decisions. Yelp’s User Operations team already places alerts on business pages when we notice an unusual uptick in reviews that are based on what someone may have seen in the news or on social media, rather than on a first-hand experience with the business. Now, when a business gains public attention for reports of racist conduct, such as using racist language or symbols, Yelp will place a new Business Accused of Racist Behavior Alert on their Yelp page to inform users, along with a link to a news article where they can learn more about the incident.
Is there any chance whatsoever that the businesses being smeared, with Yelp’s complicity, will be offered a way to buy themselves out of this racist listing?
I suppose we’ll find out based on how Yelp stock starts doing.
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