Yelp gets an earful from L.A. business owners

At a town hall meeting organized by Yelp, small-business owners slam the review website, complaining about aggressive ad sales tactics and bogus reviews that hurt sales.

In an effort to reach out to business owners and clear up misconceptions, Yelp has launched a series of town hall events in 22 major U.S. cities this year. The meeting Tuesday at the Pantages Theatre in Hollywood was L.A.'s first, and dozens of business owners — including active advertisers on Yelp and those who knew little about the site — were invited to attend.

"I have one-star reviews for my diner from people that have never walked into the place. They've never stepped foot, they've never tried the food, but they give me one-star reviews. That's insane. Why would you let someone like that stay on the site?" demanded Craig Martin, owner of Cafe 50's in West Los Angeles. "I spoke to your office, I called your guys, I emailed, I talked to your salespeople."

Instead, many small-business owners at the company's town hall meeting in Hollywood on Tuesday slammed the site, venting their frustration at Yelp for aggressive advertising tactics and bogus reviews that they said hurt their businesses.

Yelp Inc. was hoping to debunk misconceptions and ease business owners' concerns about the popular review website.

Yelp spent most of the time touting its service and the benefits of advertising, and asked a panel of five people — two business owners and three frequent Yelp reviewers — to share their experiences with the audience.

"You can't run a small business without Yelp," said panelist Matt Berman, founder of the Bolt Barbers chain of barbershops in L.A.

But the glowing comments from the panel didn't sit well with the audience, and when the town hall opened up for a question-and-answer session, business owners were quick to air their grievances.

Many slammed the company for allowing reviewers to post inflammatory comments — one restaurant manager said she cried for three days after a Yelper wrote that her restaurant was filled with Nazis. Others said they had been subjected to aggressive advertising calls from Yelp.

Vintage clothing shop owner Reiko Roberts said the advertising pressure amounted to extortion. She said that when she declined to buy ads, "the lower reviews go to the top and the higher reviews go to the bottom."

"You've had this go on for an hour and a half.... What we're going to have is a great promotion for you guys, but we don't have time to go over subjects that I think concern a lot of people," she said, eliciting cheers from the crowd.

One of the biggest complaints centered on Yelp's review filter, which removes suspicious or unhelpful posts and puts them on a separate filter page. Business owners said many of their five-star reviews from legitimate customers had been filtered, leading to suspicions that they were being withheld because the owners didn't advertise with Yelp.

Yelp sought to dispel that notion, saying its filter was automatic and based on "several objective data points" that aren't tied to advertising, said Morgan Remmers, Yelp's manager of local business outreach.

"The first layer of this filter is trying to suppress any spammy, shill, malicious reviews that it can identify. The second layer that it's evaluating is the user's engagement with our site. So we're showcasing the most helpful, reliable reviews," Remmers told the audience.

Still, she conceded, "sometimes legitimate reviews from legitimate customers will get filtered."

Since launching nearly a decade ago, Yelp has been criticized by business owners who accuse the website of manipulating reviews based on whether the companies fork over advertising dollars.