The Vergecast - Yelp CEO Jeremy Stoppelman welcomes you to Team Antitrust

Episode Date: August 25, 2020

Antitrust criticism of big tech companies like Google, Apple, and Amazon have been louder than ever — from the consumers to the tech companies who compete with them. Yelp CEO Jeremy Stoppelman has been vocal for years about the problem with Google’s dominant market share in maps, local search, and reviews. “I’ve been working on it for over a decade and it’s great to see that more people have jumped on board.” Stoppelman says. “When we started out criticizing Google and highlighting some of their abuses, we got — especially from Silicon Valley — so many eye rolls.” The Verge’s Nilay Patel and Casey Newton recently caught up with Stoppelman to discuss the evolving view of the media and the public on the tech monopolies, as well as how Yelp is handling their competition and what possible changes can be made with regulation from the government. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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dropping May 14th. Tap in with us. Hey everybody, it's Neil Life from the Verchast. On this week's interview episode, Casey Newton and I sat down with Yelp and Yelp-in and CEO Jeremy Stopleman. Now, you obviously know Yelp, as the local search company. You can rate and review small businesses around you. They've got a bunch of other features.

Yelp has also, just for the longest time, been one of the primary proponents of antitrust action against Google. Casey and I have heard from Yel's policy team for years about how Google is competing unfairly around the world. So we talked to Jeremy about that. Obviously, there's a lot of antitrust action in the world right now. We also talked about Yelp. Yelp has changed a lot during the pandemic. They had to have some layoffs and some furloughs. We talked about how he's refocused to the company, rebuilt it, re-prioritized what Yelp is doing sort of in the pandemic economic calamity of now. And, of course, we talked about Yelp as a product, where it is, where it's going. Super interesting

interview. Jeremy has a lot to say. He was not restrained at all. And one of the first interviews he's done coming out of the pandemic about Yelp's future. So check it out. Jeremy Stoplman, co-founder and CEO of Yelpian. Jeremy Stoppelman, you're the CEO and co-founder of Yelp. Welcome to the Vergecast. Great to be here. Thanks for having me. Yeah. And Casey Newton is here too. Hey, Casey. Hey, Eli. Hey, Jeremy. There's a lot to talk about. Obviously, Yelp is a business that supports local business. There's a lot of change in that market. Yelp has also been sort of at the forefront of antitrust efforts for years that is growing in momentum across the world. And, you know, Casey and I spend a lot of our time talking about platform moderation. And Yelp is like a user

generated content company with structured data. So there's just a lot of things to discuss. But I want to start with Yelp, the company, with you, like many businesses, ours included, you had to make some tough choices in the pandemic. Walk us through that, where Yelp was, where it is now. Sure. It's been a crazy roller coaster, to say the least. You know, we started off the year pretty strong, you know, January and then into February. February was kind of crushing. We were really proud of our performance there. And then March started to look good and then it became apparent the virus was coming. You know, so we rushed into a work from home situation. We had to buy like, God, I think it was like at least a couple million dollars worth of laptops because our whole sales team was on desktop machines. And so we had to really scramble across multiple offices. It was pretty insane. But the team proved resilient and we were able to get into a work from home posture. Then we started seeing, you know, the ad business become affected, obviously, by lots of local businesses starting to shut down and so forth. And so it got pretty scary there,

late March into April. And we had to make some tough choices. We laid off about a thousand people. We furloughed about a thousand people. We went to reduce salaries. So we made a lot of shared sacrifices that put the company onto a more stable footing as we enter. We saw that we were headed into a very serious crisis. And so we had to make those moves. We also, you know, rush to help local businesses as much as we could. You know, we gave over $30 million worth of relief for businesses, particularly, you know, restaurants and nightlife businesses where, you know, the first hard hit as everyone stopped going out.

So it was a pretty scary period for the company, and I'd say, you know, for for the world as a whole. You know, fast forward a couple months later, things were normalizing. We were all, I think, adapting to a new normal. You know, we started seeing some cities cautiously and some maybe not so cautiously reopen. And, you know, we were encouraged by it. There was a lot of, you know, economic activity picking up restaurants started, you know, we started to see signs that they were coming back. And then, you know, as we head into sort of more recent July kind of time frame, you know, I think we were starting to see. Certainly businesses were adjusting to the new normal. You know, some of that resurgence in activity plateaued as virus cases, you know, ran back up. You know, so that's kind of where we're at. We did see real strength in home and local. A lot of people, of course, know us as a restaurant review site. But, you know, we've always, you know, gotten quite a bit of our revenue from home and local services. And as people show, altered in place at home, you know, they were spending more time, you know, investing in their

backyards or, you know, getting lawns mode or, you know, certainly if you're using your house a lot more, things go wrong, toilets get clogged and so forth. So we saw a lot more, we saw that activity pick up from sort of the immediate lows of the panic. And then that really is anchored the business and gave us ultimately the confidence to start bringing people back. So we're no longer on reduced salaries. Everybody's back to their previous. compensation that was reduced. And then also we were able to communicate to all of our furloughed employees, or most of our furloughed employees, I should say, that we had jobs for them. And so we've been bringing people back, coursed out over a few months. So I've got this stat from the letter you

wrote at the time of your layoffs and furloughs. Interest in restaurants you wrote, restaurants are your most popular category. Interest dropped 64% since March. Nightlife interest was down 81%, gyms, 73% down, salons and beauty down 83%. Have you seen those numbers come back up? Yeah, I'm not, I can't remember when exactly that stuff was from, but yes, we did see, you know, it took a major hit in sort of back half of March and into April, particularly in those high-frequency in-person services like restaurants. We have seen recovery, but not full recovery, obviously.

You know, restaurants are still really hurting. You know, a lot of them have been able to adapt to pick up and delivery, and we've seen, you know, some significant activity there. But, yeah, we're not for beauty and restaurants and nightlife, we're not back to normal by any stretch. Yeah. And then you said this thing, and I'm going to ask a really dumb question, but it's often illuminating. You said at home and local is now like the core of the business. It's providing a lot of revenue. Here's my dumb question.

How does Yelp actually make money? Where does that revenue come from? You know, it's an ad model, click-based ad model, not wildly different than paying Google for AdWords. We do offer, you know, profile upgrades, things like you can highlight your portfolio, you can showcase your verified license, we now have a way to showcase your logo that's taken off more recently. We have a connect service where you can post things onto your page, you know, kind of Instagram. like with imagery to keep people updated about what's happening with your business. So we have a lot of these profile features, but then the core of the business is an ad product. So if you search plumbers,

you get sponsored results on top. And if you as a consumer click on, you know, a sponsor result, then we're getting paid for that click. One of the things that I've observed in San Francisco is just like chaos when it comes to a business being open one day, gone the next, Today, it's delivery. Tomorrow, there's a sort of outdoor area that you can eat. Like, what is that doing to Yelp as a directory? How are you trying to stay on top with, like, what's happening on the ground, given how quickly it's all changing?

Yeah, it's a good point. I mean, things have been really dynamic from a content and data standpoint. So we've attacked it in multiple ways. You know, we were very quick to crank out features that allowed businesses to talk about what they were doing in time. of COVID. So, you know, do they have, you know, cleaning protocols? Do they require masks, you know, updated hours, all those things. Those are free features that any business that claims their page, you know, can update and highlight for consumers. We also gave away for a time our Yelp Connect

functionality that I was talking about where that allows you to put a pretty prominent tile on your page with imagery of whatever you want, be it, you know, here's the new cocktails we're offering for takeout, which you couldn't do before. And it also gets pushed out via email as well. So that was another way that business owners could communicate as things were changing really quickly. It proved pretty popular. We had several thousand, I think, businesses pick it up while it was free. And then many of those have converted over to paid as time has gone on. And so it has been a real challenge. There's also been a lot of investment, frankly, from Yelp. So we've spent considerable resources trying to go through all the

top businesses, particularly in some of these hardest hit categories and manually update it, try and figure it out by going to businesses' website and seeing if they've updated there and have an update. So we are, we're sort of trying to get at it. We certainly want to get business owners at the tools because they're the source of truth. And if, you know, they're willing to and able to hop on and make the change, that's going to be the fastest, most accurate way to get it done. But we also don't want to stop there. We want to make sure that we're using our best efforts. And then, of course, I'd be remiss if I didn't talk about, of course, the Yelp community, we have all these great users and many of the submissions can come from there

as well. So, you know, the three different angles we try to attack it. So that seems like a, I mean, you've got a search engine, you've got a directory, you've got a bunch of structured data where you can add fields, right? You've added some fields with businesses owned, Black-owned businesses, you added fields for gender and neutral bathrooms. How do you get your, I mean, how do you get those fields filled in. I mean, that seems like as much of a challenge, you can add all the fields you want. You've got to get a mass of businesses to actually go and engage. How do you solve that problem? Yeah, it varies by what type of attribute you're talking about. So something like, you know, black owned businesses, which an attribute that we launched in the wake of, you know, George Floyd

murder and, you know, a lot of discussion around a race and black owned businesses in particular when it comes to Yelp. We had heard from our community and we had heard. from black owned business owners that they wanted to highlight that. And so, you know, it was something that we were able to quickly add to Yelp. And we even made it searchable. And so in that case, like, you don't want necessarily the community to be the ones that are deciding whether that attribute is on or not. You really want to leave that for the business owner.

So that one is something where the business owner has to go in and decide to opt into it. You know, there's others that are more subjective, like good for kids. And so in that case, we go to the community and we have a voting system where people can just you know, can tell us whether they think this particular business is good for kids. And if so, if we get enough votes that confirm it is, then we would sort of check that off and say, oh, people say this is good for kids. What would it take for you to say that the verge is good for kids? Anything that we could do?

It's not. I just want to be very clear. The verge is not great for kids. I mean, do you guys have a Yale page? I'm not sure. I mean, we do have a mass media category. So technically could exist, I think, on Yale. But it's, I'm not sure.

I'm not sure it would be a popular. result. Yeah. I feel like the Virges local business Yelp page is like a recurring nightmare. The reason I wanted to bring that up is you brought up Google, right? You've got this ad product. You said it's a lot like Google. What you have that Google does not have is this big structured database of information, right? That you've got business owners actively filling it in. You've got a community actively helping you fill it in. How do you think about that big structured database? Is that your core, is that the asset of Yelp? Or is that the asset of Yelp? Or is it? it, the ad product.

Google's like trying to spider the whole web, right? And that leads them to all kinds of problems. You have a little bit more control because of that database. I mean, I would say Google's trying to choke off the web. Like, there's been some data around how many clicks, the majority of click. Like when you search on Google, it used to be the majority of clicks were out to the rest of the web. Like they were feeding the open web.

And what's happened over the last decade or so is they've said, actually, it's better that we contain as much of the web as possible in our own Waldgarden so that we can monetize it. And so now the majority of clicks, when you search on Google, end up leading to Google own properties, which is a real problem for the rest of us. But that move is Google is making its own databases, potentially by copying yours, but you've got this big database that you have to manage. Do you think of that as a discrete task?

Like, how do we manage the Yelp directory? Or is that something that's connected to how do we manage users, how do we manage small businesses? I mean, the primary way that I've always thought about it is we're trying to connect people with great local businesses. That's our mission. And so to do that, you need accurate information. You need to know that the businesses are there. You need to know what their hours are. What they're offering is, what they're, you know, whether they service a particular person's area that they live in, et cetera, et cetera. So it is a critical component of Yelp is making sure it's

really easy for people, whether it's the consumers, whether it's the business owner, whether it's us doing our own research, that that listing is as accurate as possible because ultimately we don't want someone to be disappointed when they decide to trust us. If they come looking, you know, for a pediatrician, we want them to see the great pediatricians near them. And we don't want them to sort of click through, find out that some of the information that we had was inaccurate. We're always trying, like, it's a hard problem. We're never going to get it, you know, there's so much data. It's so messy. We're never going to be perfect, but we want to be the best. Absolutely. And then just on this last note, and then I do want to kind of broaden out,

we've described a bunch of constituencies. Who do you think of as Yelp's customers? Is it the small businesses buying ads? Is it the users? Are their interests aligned? They can be aligned. And that's the sweet spot of Yelp is when the interests are aligned, when we can take a consumer, connect them with the great local business, ideally get paid. That's where all parties, all constituencies, as far as I'm concerned, win. But I would say as a philosophy, we always start with the consumer perspective because, you know, we really don't have a lot to offer the world if we don't have consumers and a community of reviewers. Like that is, you know, that's table stakes to play the game. You need an audience that is transacting to offer anything of interest to

business owners in the first place. So you start there and then you connect them with business owners. Business owners get to grow their business. They're really happy about that. They're willing to pay for growth. And so that's where, you know, our ad system comes in. But, you know, business owners could also want things that are not necessarily great for consumers. And so you want to protect against that. You know, you don't want to let every business owner be five stars because they're not. Like, you want it to reflect reality as much as possible. And so that's, that's what we tried to do is make sure that Yelp, you know, is a level playing field where consumers can figure out, get as accurate sense as possible of a business before they transact. Like, that is definitely the goal.

I'm always every sort of big ad-supported business on the web, I think, runs into this tension of the revenue comes from people who aren't the most important users of the system. And it's always interesting to see who draws the line where, which I think does bring me to Google because Google appears to be drawing the line somewhere differently than you. But just to be direct, Yelp has been pushing on Google in terms of antitrust forever. I think Casey and I have heard from your team on antitrust concerns for years now. There's more scrutiny now than ever. It seems to be working.

what's your view of it? How's it going? Is it having the results you want? I mean, I've been working on it for over a decade. And, you know, it's great to see that more people have jumped on board. When we started out criticizing Google and highlighting some of their abuses, we got, especially from Silicon Valley, so many eye rolls. And, oh, you're just a bunch of winers. And I think the conversation has really shifted to a more productive place where more and more business leaders, you know, entrepreneurs and, you know, consumers, just everyday people are understanding, hey, we have a massive consolidation problem. Like, these businesses are the gateway to information, period. And they're essentially completely unregulated. Like, they're running amok. You know, essentially they're tuning their algorithms in a lot of cases to, you know, highlight the most

engaging content, which might not be the best content, might not be the most useful, might not be the most truthful. And like, who's pushing back against that? And I think that's become a real problem. I think everyone's woken up to this consolidation issue. And so now the question is, you know, how fast can we move on it? Of course, there's multiple, you know, there's multiple companies to talk about. We're talking about Google, you know, which one gets the majority of the attention and focus? I think, obviously, Google is a great one to focus on. But, you know, there is a wider antitrust conversation. I think it's very healthy. I think it could have come earlier, but I'm not complaining. There's no point in complaining. We're here, and we've got a lot of

people now on team antitrust, and that's a good thing. Have you talked to the other companies that are pushing? Like, have you played Fortnite with Tim Sweeney? Right? Do you and Danielack like hang out in a Discord? Like, there is some conversation about these companies actually teaming up to provide some like consolidated market power with their own. I mean, if you go back to the Microsoft case, the way you as a company want it to work because putting on, you know, sort of taking on these behemists is extremely expensive, very difficult. Ultimately, there's a political component to it. So ideally, you want the government to act because they have, you know, way more resources than any one company, certainly a company like Yelp. And if the regulators act, then they start to uncover

things and emails come out, information comes out. The pressure and the scrutiny also just helps the competitive dynamic sometimes. And so, you know, our strategy has always been to help support aid, encourage the regulators to do their job and push back on Google as an abusive monopoly power. And then, you know, depending on what information comes out of that, then maybe you decide, you know, you have an individual antitrust case that you want to bring. But, you know, historically that that's been the winning strategy rather than you, a small, much smaller, less powerful company, individually bringing a legal case before the government even acts against someone like Google. So that's kind of our position. So here's my question. And you know, first let me

stipulate. I think that Google abuses its market power and accident anti-competitive ways. And I'm really excited to see the antitrust case when it arrives. And I think that it is definitely disadvantaged your business. But we're still sort of talking about Google, I feel like as if it's the only possible entry point to Yelp. And the thing that happened since your company was founded was the rise of mobile phones, the app stores exist, right? Like, there's a world in which the Yelp app is just so freaking good that everybody has to run out and download it. And this is how they access all their local information, right? So just even just to play devil's advocate, right? What is the answer to, come on, Yelp, can you just actually like compete a little bit harder? You have other tools to get

customers attention, you know, that are not antitrust cases. Yeah. I mean, I would say just you could look at our traffic makeup, we still get a huge portion of our traffic from Google. So while I feel better about our market position and we are more diversified traffic-wise and without the mobile app ecosystem emerging, like we would be in a far worse position. Who knows where we would be, frankly, if that didn't exist. So I would call that a lifeline rather than, oh, you're totally fine, nothing to worry about. You're a bunch of winders. So stop complaining and get back to work. I think The other thing to remember is think of the enormous resources a monopoly power has and can put against you. And so you look at mapping technology, it's like not many people can afford to play in the mapping space, period, anymore.

Like, you know, what happened to, you know, NavTac and some of these big maps players is like, you know, Google entered the market. They gave away a free product, essentially, although they now charge for it. and some of the independent mapping players fell over as a result. So these big monopolies bring in insane amounts of resources to fight. So I would say, you know, it's a minor miracle that we're still standing. I'm very proud of the fact that we've, you know, that we've competed successfully. But I think in my mind, there's no question we would be a significantly bigger company with more resources to invest if, you know, if Google had played fair and not, you know,

tip the scales in their favor to make sure that their content, And their local results are always at the top and increasingly taking out more and more of the page. When it comes to local, if you do a local search on Google, especially mobile, it's a chore to find organic results anymore. What's your preferred outcome? Is it Google has to pay you for scraping your data? Is it that they have some minimum of traffic? They have to redistribute. They can't do local search.

Like, what do you want? We've, you know, we in collaboration with some other companies like TripAdvisor, worked on a demo of what could exist. It's called FocusOntheuser.com. You can kind of see what it is, but it's essentially taking that local box and making it interoperable. I think a pretty good example is actually,

if you look in the recipe category, it's interesting because I don't think there's a lot of money in recipes. As a result, Google has done what Google used to do, which is it organizes the world's recipes. And instead of keeping you on the site, you know, just to see a recipe, they're happy to send you along onto somebody's independent blog.

And so there's a whole vibrant ecosystem of players within the recipe space. So why can't they do that in Local? Seems pretty straightforward. I mean, they have like a challenge. Again, this is like very devil's advocate. But, you know, Google has to grow. I mean, do you think Google should not be allowed to enter local search? Should they not be allowed to enter any other category where they have a structured

enough dataset to just deliver the result? Certainly, you know, they can compete, but they should compete on a level playing field. And in fact, when they tried to, they were losing. I mean, there's actually, back to the, like, government regulators often reveal interesting emails. But, you know, there's conversations that are now public that were over email where they're like, oh, yeah, Yelp is coming up so much. We have to do something. Okay, when we, you know, whenever Yelp is going to show high in results, we should trigger our map box and, like, make sure that our results are above it. Like, they literally had, you know, had an if statement in their code that said, if Yelp, then show us our stuff above it.

Like, that's not, if you have, you know, if you occupy a monopoly position, you should not be able to basically jam everybody off the page just because you want that revenue to yourself. It's like, you're at that, you know, you built up this trust with consumers. They all learn to rely on you. You bought up all the search box market share. So anyone that types in, you know, a search, whether it's Safari or Firefox is going straight to. your site and then you're burying objectively better content like that i'm sorry that's not playing the game fairly support for this show comes from shopify starting something new isn't just hard it can be really scary too so much work goes into this thing that you're not entirely sure will

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One of the challenges that every competitor, Google has, Yelp certainly, but also Bing or Alta Vista or whatever, is that the amount of incoming user data to Google is so high. Right? So user searches for Google, you know, billions of people are searching for some term. They all click on a link. Google gets to rank that up. They have this, like, cycle. You mentioned maps.

Google gives away maps for free. People are driving the cars and walking around. The maps get more refined over time. How do you break that from a regulatory perspective? I can't just make everybody in America use Bing for two months to be able to catch up to Google, right? Like, how do you solve that feedback loop, which seems like the heart of a lot of the data monopolies that we see? I mean, I think you ideally make it so that Google can't take all the lucrative areas that it doesn't currently occupy and then jam a product into that space and then absorb all of the market share.

I mean, look at what they did in Travel, Travel Search. They went and they bought like a critical component of Travel Search, which is this company, ITA, that had all of the data on like where the flights are coming and going and how much they cost and so forth that all of the major players relied on. And they, you know, did a little, oh, yeah, we're definitely not going to use it for nefarious purposes. And now, you know, it's like you do a travel search, you know, or an airline search. And all of a sudden, instead of, you know, seeing all the major players for airline search, you're getting like a Google box, which doesn't necessarily cover every, you know, all the best flights, all the best prices. There's been some studies on that.

You know, I think that's a real problem. Like, why were they allowed to do that? That was a moment where regulators could have said, whoa, whoa, whoa, whoa, whoa, whoa, okay, you already have a monopoly in web search. we're going to stop this. And in fact, you know, there have been lots of times in American history where regulators cared about this stuff where they didn't allow this to happen. I think, you know, if you, you know, I think Obama's a great guy.

He's a very nice guy. He's a very cool guy. But on antitrust, like, you know, he, the White House was very aligned with Google. And if you look at who spent the most time at the White House, it's like by a mile Google lobbyists, you know. And I think, you know, to go on. another rant. This is great.

If you look at why has Google evaded a lot of scrutiny on this issue, I think it's because Eric Schmidt's a freaking super genius on this topic because he went through it.

He was the Jeremy Stoppillman of the Microsoft era. He was at Novell. He saw it from my shoes. He learned the playbook. He saw all the mistakes that Microsoft made. And so then Google,

as it got into a monopoly position, he was extremely strategic and laid all the groundwork to make sure that Google was going to be protected for as long as possible. And it's worked remarkably well. He, you know, it's just, in 2011, when I testified, I mean, I was like shaking in my boots, you know, Eric Schmidt testified as well. And Chuck Schumer came out. And all he said on the topic, even though Google at that point already had a monopoly,

it was like 70% or so, you know, WebShare Mobile was looking a lot worse. And he just came out and said, oh, good, you know, Eric, it's so good. great to have you here. Thank you for putting an office in my district. And then he left the meeting. Well, have you thought about putting an office in his district? I do have an office in his district. Oh, damn. Yeah, just not as big, probably. What's the ELP review? Is it good for kids? We try to be a kid-friendly company, I guess. So at the same time, and I agree, like something should be done about all this. And yet, I think it's also indisputable that Google search just gets worse over time, right? Like, there are so many categories.

that have just been like SEOed to hell, like, good luck searching for furniture or shoes on Google and like finding a decent result. There's now like, what, a fourth app on every mobile search results page. And this is like the classic argument against antitrust intervention is that companies, like, cannot help but collapse upon themselves. So like setting aside the antitrust question, do you take any comfort from the fact that Google search actually is just getting continuously worse? I mean, I agree with you, but that's more of a symptom of a monopoly, right? It's like they know that they can get away with it. They're like, where are you going to go? Oh, you type your keywords into any browser and guess what?

You're back on Google. Like, you know, and is Microsoft really an investment mode on Bing? I would say, you know, absolutely not. And so that's frankly how you behave when you have monopoly share and when you need to show growth is you just start taking up more and more real estate, not worrying about, you know, whether consumers are happy or not. So I think that's a symptom of the problem. And also, if you're, if you're Firefox, they just signed another, what, $450 million deal or something like that with Google.

It's like, who can even remotely, let's say you're a startup with the best search results we've ever seen, so innovative and amazing. How do you get distribution? Like, if we remember, how did Google get lock in in the first place? It's like, well, they won the Yahoo deal back in the day. They went and they paid Yahoo a bunch of money to become default and that helped get their brand out there and market them. How does a startup do that? Like, how do you compete with the Google machine with the amount of money that they're able to generate from search traffic? Yeah.

I mean, we interestingly saw this with TikTok, right, where like TikTok did get super huge, but it also spent a billion dollars on mobile install ads. So it's like to me that it seems like sort of the cost of success in 2020 is you have to spend about a billion dollars on advertising. That's got to be great for small businesses. Perfect. Can I borrow a bill? Do you have a billion? I could borrow someone. Do you have any wealthy friends that could loan me a bill?

Yeah. So from your position, you're looking at Google. They're the giant. They're stealing your users. They are scraping data. They're doing all this bad stuff. From another perspective, from small business owners from small restaurants, Yelp is a giant, right?

Yelp is the window to a city. Yelp contains these reviews. Those reviews might be gamed. You might have one angry customer who leaves a bad review and trashes your rating. There have been controversies with Yelp data, right? There was the Grubhubhub controversy where they were using their phone numbers instead of the business's direct number. How do you think about your relationship to that group of people who think Yelp is the bully?

Well, first off, I mean, if you look at market share and overall traffic, you know, obviously Yelp can't be the true bully because Google is way bigger than we are. So you have to ask, well, why do people care about Yelp seemingly more? And I would say, well, if you're the referee, then people are going to have issue with you if you're doing your job. Like if you look at, say, Michael Lewis put out a podcast actually on this very topic, I think it was last year, a great podcast. And he showed all these different referees. And whenever the people being refereed liked the referee, it was a symptom of a very serious problem. And so if we're doing our job well, then people will feel like it's somewhat unfair. Right.

And so if you're a business owner and, you know, you're reviewed, you're three and a half, half-star business and you're doing an okay job, but you're not great. But you feel like you should be a five-star business. Well, maybe on some other service, they've trained you that you can go buy a service like Podium and solicit a bunch of reviews from favorite customers or, you know, sort of specific times or review-gating or whatever, whatever you do to get your five-star review. And then you have a five-star reputation on the other platform. On Yelp, we specifically say no. Like, we are going to battle that tooth and nail. We're not going to allow that. We're going to fight against it. We're going to put up consumer alerts. We're going to do all sorts of things.

to make sure that Yelp is as trustworthy a platform as possible. And it turns out, not all business owners appreciate that. Like everyone wants to be five stars. And if you are hard to game, then, you know, people take issue with that. People will make up things about you or what you're doing or what you're, but ultimately, like we've always just said, we want to as much as possible showcase the truth about local businesses, whether they're good or bad. You know, we want to showcase it all, air all the laundry, dirty or clean. And I think that's why Yelp has resonated with consumers.

I think that's why Yelp is synonymous, you know, with the word review. You know, sometimes I see on social media, people will be talking about, you know, a Yelp, and then they're posting a picture from some other review sites. So, you know, I think we have that attachment because Yelp reviews mean something. And to show you the level of our commitment, one example is, you know, we have a recommendation algorithm that decides which reviews to show on a business. this is page. And up to 25% of our review content in any one time on average is not shown. And why do we do that? Because we want to make sure that the content is as trustworthy as possible for consumers. And that

algorithm drives people crazy. And do we take some valid reviews potentially and set them aside? Like, they can always come back if we learn more about that review or what have you. But do we set them aside? Absolutely. Does that cost our business something? Huge. It creates friction with our potential customers. It definitely slowed our growth, you know, over the years because we had less content. Like in the early days when, you know, all of our growth was SEO driven, having less content meant, you know, less traffic growth. But we made those sacrifices early on because we thought it was so important back to our consumer first mentality. We thought it was so important to try and make sure that Yelp is useful for consumers and that they can rely on our reviews.

And if we, you know, if we turn a blind eye to spam, if we turn a blind eye to abusive, malicious reviews, if we allow. some of these review solicitors to run amok on our platform, then Yelp is not going to be useful over the long term. And so we've just pushed hard on that. I would like to say I moved to San Francisco about 10 years ago and I had a really bad experience with my moving company and I left a negative review for that company and they contact me once a year asking me to remove it from Yelp and I always say no. So I'm trying to do my part to uphold the integrity of Yelp reviews. Thank you for holding the line. Thank you for holding the line. So much of this comes down to like interesting math problems, right?

Let's say you're a three and a half star business and you get 500 three and a half star reviews. And then you're like, screw it. I want to be a five star business. I'm going to put a bunch of money into improving this business. We're going to hire new people or to improve the facility. That's not, you have to go get another 500 reviews and that will still not get you up to the five store. Like how do you, like I hear that complaint from local business centers. Like once you're locked into your number, the long.

of big numbers and averages means you will never transcend it. How do you think about that problem? I think it depends what type of business we're talking about. I mean, if it's like a plumber, there probably aren't that many plumbers with even 500 reviews. It's a lower frequency business. And if you have a lower number of customers per, let's say, week, then your likelihood of getting reviews from those customers is lower. If it's a restaurant, obviously, the pace of reviews is much higher. You know, we have heard from business owners over time, hey, you know, is there a way that you would retire older reviews. And I'd say we will, I'm sure, look at that at some point. But if you look back to the math question, because of the ramp of contributions over time,

so much of our review content is actually new. Because for years, we were growing at like an insane clip, you know, growing the review community at an insane clip. And so like the number of reviews being written every year was getting larger and larger. So the majority of our reviews are actually relatively new. But I do think, you know, over time, there should be a way that these older reviews, you know, that maybe are less relevant to consumers today should be, you know, retired in a way that makes sense for everybody. So I've now deviously navigated us to the content moderation section of this conversation. Yeah. I mean, what you are talking about is user generated content. You're talking about a platform that needs to be moderated. That thing, retiring old

reviews is effectively a moderation decision. That is the other tech policy controversy that is is hot as antitrust, right? 230 platform moderation, who censors what? Yelp is not quite as publicly active in that space, although you have more commercial impact with what happens on your platform. How do you think about being responsible for what the reviewers say on your platform, moderating that stuff, making those decisions? There's a thorny relationship between commercial speech and free speech.

Like, there's a lot. Where is Yelp kind of situated itself? Yeah, I mean, my view on this is you should think, about moderation early, as in like when you don't really need it. And that's what Yelp did. You know, we were born at a time where the best review site for any kind of local business was city search, believe it or not. And city search was horrible. You know, they had these sort of anonymous, profileless reviews. And, you know, they would always run competitions, you know, where businesses would be encouraged to solicit reviews from their friends and family to try and

win awards on the platform so that they get some of the. So needless to say, city search was completely spammed out. Like it was that you couldn't rely on the review content at all. And so we were trying to solve that problem from day one. And as Yelp got going very quickly, we saw, oh, business owners have been trained to write reviews of themselves and like get, you know, get people closely tied to them to, to write, you know, essentially fake or biased reviews for their business. So how are we going to push back on that? How are we going to make Yelp more of a level playing field that tries to paint a picture of the reality at that local business. And so we built the recommendation algorithm I was talking about earlier.

We built very early on. Obviously, it was pretty rudimentary then. It's a million times more sophisticated today with a lot more PhDs that get to work on it. But it was something that we thought was essential from day one. And I think, as I reflect on the Facebooks and the YouTube, the Google YouTubes of the world, You know, I think it's, I guess it's, on the one hand, it's understandable if they were chasing growth, then you lean into engagement hardcore. But on the other hand, ideally you look at that engage, where's that engagement coming from,

which I'm sure they knew the entire time. And you say, ooh, this stuff is like, wow, we're getting a lot of traffic from like total misinformation and conspiracy theories and like hate speech and et cetera, et cetera. You step in and moderate it. Like, you don't necessarily have to, you know, eliminate it from the entire. internet, but like deciding to amplify it and put it in everybody's feed, I mean, that's your decision. That's not a free speech. That's not, you know, and all of these platforms, by the way, have the ability to moderate the speech. Like, that's what we're all doing. That's what, you know,

internet communities from, you know, the early days of the internet, you know, trolls were a thing that happened back. It's always been an issue. And every forum on the internet, known demand, has had to be moderated if it's going to be particularly useful. It's, I, I think, you know, these businesses turned a blind eye to moderation because it drove the metrics and the money and the numbers. And if they would have acted early, then I don't know that it would be as controversial a topic. I think the problem is, you know, things have gotten extremely political and doing it now, you know, and these are in many ways, you know, kind of a primary source of media content for the country and potentially the world. Like doing it now is very difficult and fraught. So I get why there's so much heat on it.

So, but Yale has to deal with it in another way. Like, people review bomb businesses when some angry business owner goes viral, right? Like, that's a cycle we've seen. Do you come in and stop that early? Because we do hear about it. Yeah. I mean, we saw that that became a thing probably several years ago. And then we've just continually iterated on our approach to try and, like, figure out what's, what's the right balance?

We want to let people express themselves, you know, potentially. but at the same time, we don't want to be a platform where, you know, there's a bunch of fake reviews, essentially. Like, ultimately, like, we're about honest, local, you know, honest, transperate, local reviews. And so to the extent that you run into these pages, that it's full of content that really had nothing to do with your experience of local business, that's true. So we've tried to strike the right balance of, like, putting up alerts, pointing to more context and information around what's going on on this business. You know, we've more recently finally got to the point where we're like, okay, we're going to disable reviews for a period of time. while this controversy is going on. Like our goal is never to say, hey, we don't want to talk about it.

Like, we understand the need to, you know, local businesses can get in the news for very valid reasons. And so I think the goal is to strike the right balance of like not allowing our platform to be misused or the content to get all polluted, but also highlighting what people are trying to highlight because they're trying to express something potentially important about that local business. And we don't want to get in the way of that. But, you know, we just want to find the right way to express that on our platform.

So everybody, you know, everybody's clear on what's happening. Well, it's interesting you called it a balance, right? Because you started with one step and another step and then you ended with, we're going to turn off reviews for a while. Right. And it... Depending on the situation, yeah. Yeah, but like depending on how cynical you are, you would have been like, that was always the answer. Right. No one wants to take that last step of we're just not going to let communities say what they want at this time until it's obvious that that's the only solution.

I say this is a person who's turned off comments on the verge like four times. Well, I mean, part of that was a practical, part of that was a practical. Like our view initially, and this dates back to some ways that we designed different features and functionality was like, let people express themselves and then we'll go back and clean it up. That was kind of how we approached it at first. Like, let people get it all. Give them a week or two and get it all out there. And then we'll go back and delete all the reviews from that incident because they're not real

experiences with the business. And there was also separate alerting and things to provide some context around what was going on with that business. But it proved to be just an operational headache. and we wouldn't necessarily get every last review all the time because, you know, it's like you have to, like the reviews still trickle in. So we did land audit. It's just easier to stop reviews on that business during one of those sort of blowups. But, you know, it's always, we're constantly improving it. It's a hard thing to get perfect because, you know, things change. It's like you put up a block. It's like, well, then other things happen. You know, it's a little bit of whack-a-mo.

So we're talking on Friday. Last night, Joe Biden accepted the nomination to be president. He does not have a lot of tech policy proposals, but the one that his team has confirmed to us three or four times is Joe Biden will repeal Section 230. No follow-up. That's the whole policy. Does that scare you the way that it scares other social platforms? We definitely rely on 230, like pretty much any online forum would. And, you know, I guess we'll see. There are other places in the world that we've operated in.

We were more international before Google swept our legs, so to speak, in Europe and beyond. And we did operate reasonably successfully from a content moderation standpoint in places like the UK where their approach to content is different. But it does result in some speech being stifled. The companies end up having to take a more risk-averse approach. And so that has costs. It's similar to like there's like that whole EU policy around the right. to be forgotten. And so we see those all the time, like URLs coming through that have been, like,

you know, removed because of the right to be forgotten policy in Europe. And then Google pulls a page from results and maybe had, you know, some review that someone complained about or what have you. So it hasn't been the end of the world, but it's also, I don't think it's necessarily, you know, healthy. I don't think that their approach is necessarily perfect. So, you know, maybe there is some way to navigate the issues that Joe Biden is worried about while still preserving some of the spirit around allowing people to truthfully express themselves and not have their speech overly stifled or have businesses be forced to take down stuff that they otherwise would rather leave up and think is important for people to know about.

Do you think there's any changes to 230 that should be made? I mean, I'm not, I'm not the expert. You know, I just know that we rely on 230. you know, so that we can take a stance of, hey, if somebody is putting up a review and it might be controversial, but they're standing behind it and we're able to stand behind them. And I think just at its face, if you take 230 away, it will make us more risk-averse and, you know, more content will come down that maybe could have been valuable to consumers. So I, you know, in general, from a Yelp perspective, like, we see value in 230, how to update it. Like, that's kind of for

the lawyers to battle out. Yeah, makes sense. All right. I'm being told you're running out of time, but I ask every CEO this question when they come on the show, mostly for my own personal interest, because I'm very bad at this. When do you work? Like, when do you sit down and do email and read and actually work and not go to meetings? How do you divide your time? It's somewhat random. I mean, my schedule changes week to week based on the cadence of meetings. In this new Zoom world that we live in, I have found that once I go beyond four and a half,

hours of video meetings, I'm like dead. Like I can't like that fifth, that fifth hour of meetings is not, people are not getting like my A game. They're not getting my B game or even my C game. So I do try to keep the amount of meetings per day limited to something like four and a half hours. And then the rest of the time filled in with, you know, with email and trying to do, you know, deeper, deeper thinking and analysis. All right, Jeremy. I think we have taken up way more of your time than you anticipated. Thank you so much for stopping by. It's great talk to you. Happy to do it. Thanks for having me. All right, my thanks to Jeremy Stoffman, co-founder and CEO of Yelp. That was a great conversation,

lots to think about. Also, thanks to Casey Newton, always fun to have him as a co-host. We'll be back later this week with the chat show. I hear Dieter, Becca, and Dan did great last week, so everyone keeps telling me, so we'll have to have them on again soon. But we'll be back later this week with the chat show. We've got a lot going on in the verge. Check out the site. You can tweet at me. I'm at Recklist. Give me your feedback. I love to hear from everybody. Talk to you soon. Thank you.