Seeking Alpha

Yelp falls, Angie's List rises as New York AG targets fake reviews

  • In an online sting operation called Operation Clean Turf, the New York Attorney General's office (unsurprisingly) found "companies had flooded the Internet with fake consumer reviews on websites such as Yelp (YELP -6%), Google Local, and CitySearch." (PR)
  • It wasn't just business owners who were responsible. Leading search engine optimization (SEO) firms offered to write fake reviews for undercover investigators, and used techniques such as IP address spoofing and the establishment of "hundreds of bogus online profiles" to write them.
  • Following the investigation, 19 firms have promised not to write fake reviews for themselves or clients, and to pay a combined $350K+ in fines.
  • Yelp, which provided a statement in the AG's PR praising the investigation, has been trying to deal with its fake-review problem by tagging businesses guilty of writing/paying for them and automatically filtering questionable reviews. More recently, the company sued a law firm for posting fake reviews.
  • Angie's List (ANGI +4.4%), which requires users to subscribe to its service (and thus provide it with billing data) to read and post reviews, closed up strongly. Yelp remains up over 3x YTD.
Comments (2)
  • pman6
    , contributor
    Comments (270) | Send Message
     
    Someone can easily subscribe to angie's and write fake reviews there too. That's what I would do if I wanted to try to sabotage someone's business.
    24 Sep 2013, 04:28 AM Reply Like
  • rogermcmanus
    , contributor
    Comment (1) | Send Message
     
    There is a big difference between of fence and defense in the Reputation Management game. It is one thing to "bury" negative reviews by creating positive ones. It is another to proactively guide happy customers to say so. These are the heart and soul of a business, but because they rather expect a good experience, they are not motivated to say so online. White hat, marketing research-based systems (like Mpact Magic) never create problems for an Atty. General because they solicit truth. If there is more positive truth than negative experience and the negatives get outnumbered, so be it. Those who scream or praise too emphatically are fringe players, not the mainstream.
    25 Sep 2013, 09:52 PM Reply Like
DJIA (DIA) S&P 500 (SPY)