Greg Sterling (via Matthew Ingram) provides full coverage of a brouhaha about a cafe in Oakland that stipulated "no Yelpers"! With Greg, of course I agree that online reviews are here to stay. Yet some business owners seem not to be able to deal with it.
In the field of online reviews I'm deeply involved with -- home renovations -- I don't know if any of you saw the 20/20 episode about the bad contractor in Maryland. He even went ballistic about the private online reviews shared among the membership of Angie's List. This contractor, who had defrauded a bunch of homeowners 16 years previously before being banned from doing business in a county, switched counties and began racking up complaints again. When customers began banding together and expressing their opinion, he became threatening, figuring that his bluster was going to turn out to be bigger than the whole phenomenon of consumer reviews. All that did was land him on national television, painted into a corner.
For businesses that want it all to go one way, there is hope. OurFaves.com, a Toronto-based Yelp-ish creation, encourages users to stick to the positive. At first I was sceptical. But you know what? It works. Most of what I want to post about local businesses is in fact positive, and the ones that go the extra mile, be it the drycleaner who undoes the problems the previous drycleaner foisted on me; be it the great unsung Persian restaurant at Richmond and Spadina, or 1,000 other great local spots... they need all the help they can get from customer advocates. OurFaves.com keeps it light and positive... and I admit, it is growing on me.
Posted by Andrew Goodman
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Friday, March 30, 2007
Yelp has been the most-watched company in the seemingly-narrow but fast-growing niche of user-generated content specifically with regard to bars, restaurants, and clubs, and "youth" oriented hotspots and retail. For them, it's beginning to expand to the point where they're a bit of a social community and a "go-to" site if you're looking for local review content. Labels: insiderpages, judysbook, local search, yelp
Sure, there's a lot of room in this space for competition, but it isn't looking good for Yelp's competitors.
(Alexa is unscientific, I realize - but roughly accurate at the higher volumes. The bottom two sites are InsiderPages and Judy's Book. The blue breaking-out line is yelp. The top two are CitySearch (red) and SuperPages (cyan).)
It's fairly well known in insider circles that Yelp's startup competitors, InsiderPages and Judysbook, have struggled. This isn't the place to further examine why, but an easy and true answer is that there can only be so many winners in a space. As always, would-be destination sites are competing for valuable user attention and loyalty.
There is also a potential vulnerability in the bigger traditional (superpages) and nouveau (CitySearch) listings providers. Their support seems to be gradually eroding.
Meanwhile: new startup local search and review services are launching (such as ZipLocal, just launched in Canada). Established local portals are redesigning their interfaces and spending more dollars on marketing and ad sales. Huge media companies, I hear, are set to launch their own little Yelp-like experiments.
In this chaos, if Yelp can emerge as a clear leader, it makes a user's choice a lot easier, and makes it that much harder on Yelp's competition. But depending on your location you may not see Yelp as a clear leader yet.
The other variable is business models and longevity. Any number of scenarios can play out. Ambitious startups that are bleeding money, like InsiderPages, are likely to flame out. Traditional media companies running breakeven-or-better local portals aren't likely to go away, and they already have sales forces in place. Larger media companies launching new experiments *seem* to have staying power, but if there is zero adoption of their new ventures, then they'll just be folded up. And Yelp is no doubt burning cash too fast for its current monetization model, so it relies on a favorable buyout price as its "business model."
Another business model consideration is that sales effort alone can't sell these listings. If local business owners - confused about online to begin with - are being besieged by salespeople for local listings sites, it's only those with strong brands or those with "hot" brands that can really rely on business owners paying attention to their sales pitches.
Putting it all together and looking at the strong indicators in the user numbers, I'd conclude that Yelp will triumph amidst the chaos and will likely get its favorable buyout price.
Posted by Andrew Goodman
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