Reviewing A Problem With Reviews: Yelp (YELP), Angie’s List Inc (ANGI) and More

The problem has become so severe that Amazon, Google, and Yelp have all begun to weed out questionable reviews. However what is and what isn’t a questionable review? It gets complicated and the answer can have a material impact on a product’s sales or a business’ financial results. It’s a touchy topic. As a review reader, it isn’t clear what the impact of the weeding process will be.

Can’t Trust Bad Reviews

An issue that The New York Times brought to light was the use of negative reviews. The paper claims that a book about Michael Jackson was bombarded by negative reviews from angry fans, resulting in the book being temporarily pulled from sale. While that may or may not be true, a lot of negative reviews certainly could persuade customers to pass on a book.

There are also claims that negative reviews are used by small merchants on some sites. Travel has been one area pointed out as problematic, with small hotel operators accused of placing false negative reviews of local rivals with the hope of gaining more customers themselves. It seems even bad reviews are suspect.

Can’t Even Trust the Review Sites

There have even been accusations that some sites built around reviews have attempt to get paid for giving good reviews more prominent placement on their sites. Yelp, in fact, has been accused of this. Basically, enterprises that paid to advertise on Yelp were claimed to have come off looking better than those that didn’t pay to advertise. At least that’s what those that chose note to pay have accused, with some suggesting that the entire business is little more than an extortion scheme. So, you can’t even trust the review sites?

An Industry in Need of a Cleanup

The Internet has been a great democratizer because it allows everyone to have a voice. However, it also allows for a great deal of anonymity. Putting those two together hasn’t always been a good combination. Companies built around reviews, like Angie’s List and Yelp have real issues at hand. Amazon and Google, too, have to figure out what to do or some of their most valuable content, the reviews, could be seen as worthless. Investors in any of these companies need to watch this issue closely. In fact, it might be best to avoid Yelp and Angie’s List until there is more clarity.

Yours,

The article Reviewing A Problem With Reviews originally appeared on Fool.com and is written by Reuben Gregg Brewer.

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