Facebook tests Yelp-like service devoted to local businesses

Facebook is quietly testing a new feature that allows its users to find “local businesses with the best Facebook reviews and ratings” through its website.
The feature allows Facebook users to look up everything from automotive repair shops to wedding planners near their locations. (They can also manually search for businesses in a different area.) Results are shown with review snippets, a star rating, contact information, and the address. It is, in other words, just like Yelp.
Businesses seem to be ordered based on the number of reviews they’ve received. This makes sense for Facebook — why have something with two reviews as the top result when another business has dozens? — but it’s weird to see a business with a four-star rating appear far above a business that’s often given five stars.
Professional Services, as the feature is called, makes sense for Facebook. The company has been trying to become more useful to businesses lately, whether it’s by introducing the Facebook at Work service or allowing them to stay in touch with customers via the Messenger platform, as it diversifies revenue sources.
The surprising thing is that it might actually make sense for Facebook’s users, too. Even though Yelp has remained the de facto standard for finding businesses, Facebook might have the edge in some cases. I searched for gyms in a nearby city, for example, and Professional Services had many more reviews than Yelp.
Facebook also has the benefit of requiring people to use their real names with their profiles. It’s easier to trust a review from a friend, acquaintance, or family member than it is to trust anonymous users. You know whether your aunt has wonderful taste in hairdressers; you don’t know the same about XxBoWlCuTsxX.
But posting under real names might have its drawbacks. GlobalWebIndex, a firm which regularly surveys Facebook users about their habits, told Gigaom that just 10 percent of respondents to a recent survey “posted a negative comment about a product or brand.” Reviews could be skewed by users afraid to be seen as mean.
This is clearly a quiet test of a potential feature. Facebook never announced that it’s testing something like this, and a request for comment on this story wasn’t immediately returned. The company isn’t yet competing head-to-head with Yelp, but I wouldn’t be surprised if Professional Services gets more attention soon.
h/t Search Engine Land

Bad dentist must pay $4,677 in case over Yelp threats

It’s bad enough having a toothache. It’s much worse when your dentist rips you off for $4,000 and then threatens to sue you for complaining about the treatment.

That’s what happened to New York City patient Robert Lee, whose ordeal started in 2011, but ended last week when a federal judge ordered the dentist to pay $4,677 in damages and legal fees.

The dentist in question, Stacey Makhnevich, boasted of being an opera singer who catered to musicians. Her other speciality was short-circuiting negative Yelp reviews with tricky contracts that required patients to assign their copyright in what they wrote about her services. (See Ars Technica for the legal background).

Sure enough, after Lee complained about her on Yelp, Makhnevich went after him. She pointed to the contract to demand that Lee pay $100 in copyright damages for every day the negative review stayed online.

Makhnevich is not the first to try this stunt. Other professionals around the country, mostly doctors and dentists, have also been using service contracts to stifle social media criticism.

Fortunately, they’re not all succeeding. After Lee filed a lawsuit to stop Makhnevich, U.S. District Judge Paul Crotty agreed with him that the Yelp review was fair use under the Copyright Act.

He also chewed out Makhnevich in a default judgment, finding her actions to be unconscionable and a breach of fiduciary duty, and ruling that Lee’s commentary couldn’t be defamatory under New York state law.

The Makhnevich affair is another example of the Streisand effect, and why it’s perilous to use aggressive legal tactics to control social media. (Last year, a hotel in New York found out something similar, when it threatened a bride with $500 fines for every negative review posted by her wedding guests.)

For Lee, however, the $4,677 may be a hollow victory since the rogue dentist is now nowhere to be found. The judgment is below:

Update: For the lawyers out there, Paul Levy of Public Citizen, who represented Lee: “The damages were awarded on a different cause of action than the one about the non-disparagement / copyright assignment agreement.  In addition to that claim, which is what got all the public attention, Lee had a claim for breach of contract, because the dental office promised to send records to his insurance company so he could get reimbursed for her (exorbitant) charges.  They did not send the records so he was out the money, and the damages were ONLY for that.” (I’ve changed the headline to reflect this)

Bad Dentist Judgment

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Entrepreneurs embrace net neutrality plan (except Mark Cuban)

Propaganda machines are running full-blast ahead of next week’s landmark vote on net neutrality, so readers should take most “news” about the FCC with a grain of salt. That said, it’s worth noting a new letter in the debate over whether net neutrality will protect entrepreneurs (as supporters claim) or if it will instead damn small business to crushing regulations, as Republican Commissioner Ajit Pai, backed by the telecom industry, is warning.

The letter comes via the advocacy group Engine, and is signed by more than 100 startups and emerging businesses. Many of the names are unfamiliar but some — including Yelp, Etsy, Kickstarter, Tumblr and GitHub – are among America’s favorite new companies.

Their position, in short, is that the FCC’s proposed “Title II” rules, which would forbid ISPs from giving special treatment to some websites over others, is not the regulatory bugbear of Pai’s imagination:

“Any claim that a net neutrality plan based in Title II would somehow burden “small, independent businesses and entrepreneurs with heavy-handed regulations that will push them out of the market” is simply not true,” the letter said. It added, “The threat of ISPs abusing their gatekeeper power to impose tolls and discriminate against competitive companies is the real threat to our future.”

This, of course, is part of a public relations effort but it doesn’t change the fact that all these companies, which are run by sophisticated and successful entrepreneurs, put their names on it.

The entrepreneurs could be lying or maybe they’re deluded. The better bet, though, is that the they genuinely favor rules to prevent the likes of Comcast or Verizon using their power over pipes as a cudgel to demand money or favors.

So are there any bonafide entrepreneurs (as opposed to Pai and the telecom giants) concerned about the regulatory burden of Title II? Well, there’s at least one.

On Wednesday, Dallas Mavericks owner and startup booster Mark Cuban was at it again, railing at a Re/code conference how the FCC will “fuck up everything” with its new rules. (He’s made such rants before).

Normally, it’s worth paying attention to Cuban since he’s bang-on about other issues involving small business, especially patent reform, and has a lot of pull in investment circles.

On this one, though, his concern may be overblown since the FCC has been clear that it’s taking a light touch to Title II and will be using it to prevent internet throttling, while also staying clear of measures like rate regulation or forced access. (One also wonders if Cuban’s F-bombs have anything to do with the fact that he is the chairman of a cable network).

So there you have it. You entrepreneurs out there can join Etsy and all, and run the risk of FCC regulations, or throw your lot in with Cuban and put yourselves at the mercy of the big ISPs.

Here’s the Engine letter, which is short, and has all the companies’ names:

Engine Letter Re FCC

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Yelp says FTC investigation shows its reviews are not fixed

Customer review site Yelp can be a source of stress for small business owners, who fear that a poor ranking or negative comment can sabotage sales. Some businesses even claim that Yelp plays on their fears by manipulating rankings in order to extort them into buying ads.

Yelp, however, has for years adamantly denied that it rigs its rankings. And on Tuesday, the company’s claim for its integrity got a boost after the Federal Trade Commission reportedly concluded an investigation into’s Yelp’s recommendation software and sales practices, and decided to take no action:

“[T]he FTC recently concluded a deep inquiry into our business practices and informed us that it will not be taking any action against Yelp. The FTC looked into our recommendation software, what we say to businesses about it, what our salespeople say about our advertising programs, and how we ensure that our employees are not able to manipulate the ratings and reviews that we display on our platform,” Yelp wrote in a new blog post.

News of the investigation first surfaced last April when the Wall Street Journal reported that the FTC received more than 2,000 complaints about Yelp from businesses between 2008 and 2014. Yelp, however, points out that this number amounts to only a tiny fraction of the number of its overall listings, which cover everything from restaurants to barbers to airports.

Yelp also earned another victory in September when a federal appeals court in California threw out a class action suit brought by a dentist and others, which claimed Yelp had “extorted” them by tying ad purchases to positive ad placements. The court’s decision, however, was based on the grounds that Yelp has a legal right to engage in “hard bargaining” if it wishes; the court did not make a finding about the company’s actual business practices.

After the court ruling, Yelp described the complaints as “conspiracy theories” and pointed to a Harvard Business School study that concluded the company does not manipulate its reviews based on who advertises with it.

The FTC investigation into Yelp occurred at a time when social media has given customers an unprecedented degree of power to sound off about businesses. The phenomenon has even led some companies to include non-disparagement clauses into their contracts; a hotel in New York, for instance, last year threatened to withhold $500 from a bride’s security deposit for every negative review posted online by her wedding guests.

These four ideas might make Yelp a lot more useful

Yelp has announced the winners of its inaugural Yelp Dataset Challenge, and the four entries it chose actually seem pretty useful. They run the gamut from a technique to highlight key words so users can read reviews faster to helping businesses predict whether they’ll see an uptick in activity on Yelp. Having read countless reviews giving restaurants low ratings even though the food was good, I think the entry that extracts subtopics (e.g., food, service, ambience) from restaurant reviews might be my favorite.

Give Yourself 5 Stars? Online, It Might Cost You

http://www.nytimes.com/2013/09/23/technology/give-yourself-4-stars-online-it-might-cost-you.html?_r=0

The seedy underbelly of online reviews — especially companies paying for higher reviews — is a source of frequent speculation but rarely comes into the public eye. But according to the New York Times, New York regulators are cracking down on 19 businesses, forcing them to pay a total of $350,000 in fines for “astro-turfing” their pages with fake reviews. The year-long investigation uncovered a paid-for user review market and some good old fashioned bribery — a sign that some companies will go underground to boost their online  ratings.