Facebook is lucky it missed buying Twitter and now should eat Yelp

Poster inside a Facebook office

Twitter is getting a TON of hype right now. Even today, on ABC radio, I heard about a meter for your plants that tells you they need water via Twitter. Here’s a “Tweet a Watt” do-it-yourself kit that lets you build a power meter that will work with Facebook and Twitter.

Sorry, got distracted there by the hype. Remember when Facebook tried to buy Twitter and failed?

That might have been the best possible thing that would happen to Facebook (and Twitter, actually). Let’s be honest, much of Twitter’s functionality is already built into Facebook, Zuckerberg and team just need to turn on a few new features (Steve Gillmor calls them “track”) and then everyone will get why Facebook will do just fine without Twitter.

But Twitter isn’t where the real money is. Where is that?

Getting businesses onto the social graph.

“Scoble, you’re smoking some of that funky weed again, aren’t you?”

No, hear me out.

Go back and look at the phone books that we all used to use before the Internet came about. In my house we used to get two books: one that was white, which had listings for people, and one that was yellow, which had listings for businesses.

Which one made AT&T tons of money? Hint: the Yellow Pages. I paid thousands of dollars a month to have our camera store advertisement in there. It generally paid off by bringing us tons of customers. After all, when you needed a camera store, or a dentist, plumber, lawyer, or a variety of other things, you’d look in the yellow pages and the one with the best looking ad got our business.

Now, let’s go back to Facebook. What’s the equivilent of the “best looking ad?” The business who has the best reviews. That’s a shift. A major one. Up to today Facebook has built the equivilent of the white pages: a site of people, but not of businesses. Soon Facebook will have tons of businesses on the social graph, but it needs to grab as much of that space as absolutely possible before others, like Twitter, get into the game.

Here’s why: if you have a bar, like my brother, how do you get a lot of Facebook’ers to come into your bar and “like” your bar?

Well, how about you advertise an offer to everyone in your local area? Hint: Facebook is NOT going to let you do that for free. How about you give all Facebook’ers the first beer for free? Think that would get a lot of Facebook users into my brother’s bar? You bet it would. Then, how do I get you to “like” my brother’s bar? Well, I’ll bribe you once again: I’ll give you a free basket of chips if you click “like” on my brother’s bar when you’re there.

“That’s bribery.”

Yeah, yeah, but this stuff goes on every day in business. You think those celebrities on TV that sponsor Nike are doing it for free? No. So why shouldn’t businesses try to pay for you to like them?

UPDATE: a few people have noted that Yelp’s TOS says you aren’t allowed to do this to get good reviews. OK, but you are allowed to ask people to review you, I’ve had that happen, and tons of restaurants around the world have Yelp stickers in the front window, which signal the same thing. And of course restaurant owners ask their friends to help give them good reviews. Heck, speeding is against the rules, but try doing 65 on FWY 280 and see how many people pass you.

Think this doesn’t matter?

Ask Christina Tan. She’s Milan (our son)’s new doctor. I took a picture of her and wrote about her here. How did Maryam (my wife) find Christina?

Yelp.

See, on Yelp, Christina is the top rated pediatrician in San Mateo.

“Scoble, you’re smoking that wacky weed again, Yelp is for rating restaurants.”

Not any more. Yelp is building a list of all sorts of businesses and letting its users rate them.

I asked Christina yesterday how many new patients she’s gotten thanks to Yelp. She said “several.” What’s funny is that Christina has never even been to Yelp (at least as of yesterday, she said she’s very interested in checking it out now).

So, right now, it’s easy to be accidentally “best” on Yelp right now. That won’t last. You think there won’t be a pediatrician who won’t try to figure out how to get the #1 spot away from Christina? I know there will be several. The stakes for new business are too high (restaurants are already seeing the impact of Yelp).

So, that brings us to Facebook. Yelp will help Facebook get to the real money: business recommendations.

I would not be shocked to hear soon that Facebook is in negotiations with Yelp. It makes too much sense to me. I hope Facebook eats Yelp.

What do you think?

146 thoughts on “Facebook is lucky it missed buying Twitter and now should eat Yelp

  1. Excellent post!! Twitter is like a breath of fresh air on the Social Media scene. I have been on it for just a few weeks now and I have met several interesting people. It is a platform to network with people you would like to meet in real life. Check me out!!

    http://twitter.com/spryka

  2. @Christopher Coulter

    “AUTHORITY.” – “PROFESSIONAL.” – “EXPERT.”

    Boooo…

    People that actually believe that they inherently embody any of the above characteristics, are usually very annoying people. People inwhich many of us common folk can’t stand to be around for too long, much less tolerate their obnoxious, superior (i.e. yuppie scum bags that are usually getting “paid to praise”.)

    I for one happen to cherish the loud-mouth New Yorker’s and punkass teenager’s raw emotion opinions. After all, they’re two of the most honest personality types left on our planet.

    So you don’t like Yelp – don’t use it. Better yet, go Yelp about Yelp…

    http://www.yelp.com/biz/yelp-san-francisco

  3. @Christopher Coulter

    “AUTHORITY.” – “PROFESSIONAL.” – “EXPERT.”

    Boooo…

    People that actually believe that they inherently embody any of the above characteristics, are usually very annoying people. People inwhich many of us common folk can’t stand to be around for too long, much less tolerate their obnoxious, superior (i.e. yuppie scum bags that are usually getting “paid to praise”.)

    I for one happen to cherish the loud-mouth New Yorker’s and punkass teenager’s raw emotion opinions. After all, they’re two of the most honest personality types left on our planet.

    So you don’t like Yelp – don’t use it. Better yet, go Yelp about Yelp…

    http://www.yelp.com/biz/yelp-san-francisco

  4. Robert, Excellent point. It’s something that we are trying to do with our facebook app – in India and Singapore. You can check it out here, http://www.locomi.com You absolutely echoed what we had in mind, when we started out!

  5. Robert, Excellent point. It’s something that we are trying to do with our facebook app – in India and Singapore. You can check it out here, http://www.locomi.com You absolutely echoed what we had in mind, when we started out!

  6. Christopher Coulter: I guess in your world it’s OK to take advantage of people who put their hand out and then stab them in the back over and over. I’d rather live in my little world.

  7. Christopher Coulter: I guess in your world it’s OK to take advantage of people who put their hand out and then stab them in the back over and over. I’d rather live in my little world.

  8. honestlysometimessurrondedbyallthesenetheadsifeellikeimtheonlysanepersonaliveabobnewhartmoment.

  9. honestlysometimessurrondedbyallthesenetheadsifeellikeimtheonlysanepersonaliveabobnewhartmoment.

  10. Do I really care one iota about what 30 people think of Jimmy John’s? No. And do I need to wade thru 660 reviews to know Chapeau! is French heaven? No. Do I really need to hear 10 people say a German Specialty Food store has “weird and strange” food? Gawd. Do I even need to bother, if going to Cafe L’Europe, Taboo or 264 Grill in Palm Beach? Never and no.

    The wisdom of the crowds is not, results in a mish-mash of fan boys vs. malcontents. Like, don’t like, like, don’t like, in some endless loop, and then add in all the, fakery gossip, slander and mush. Spare me. Get some real professionals, not YouTube/Digg commenters, I don’t want to trust my dining experience to potty-mouthed teenagers and loud-mouth New Yorker types. Bring on the REAL experts, please. I’ll stick with Zagat and Fodors, all the info I need, concise, convenient and well-written, with REAL authority.

  11. Do I really care one iota about what 30 people think of Jimmy John’s? No. And do I need to wade thru 660 reviews to know Chapeau! is French heaven? No. Do I really need to hear 10 people say a German Specialty Food store has “weird and strange” food? Gawd. Do I even need to bother, if going to Cafe L’Europe, Taboo or 264 Grill in Palm Beach? Never and no.

    The wisdom of the crowds is not, results in a mish-mash of fan boys vs. malcontents. Like, don’t like, like, don’t like, in some endless loop, and then add in all the, fakery gossip, slander and mush. Spare me. Get some real professionals, not YouTube/Digg commenters, I don’t want to trust my dining experience to potty-mouthed teenagers and loud-mouth New Yorker types. Bring on the REAL experts, please. I’ll stick with Zagat and Fodors, all the info I need, concise, convenient and well-written, with REAL authority.

  12. @Rick, I think your concerns and frustration are justified. The recent controversy over Yelp sales people offering to remove the negative reviews of their advertisers highlights the importance of accountability and transparency for Yelp and other rating sites. Without those two elements, these sites risk becoming irrelevant because users won’t trust the reviews and business owners like yourself will continue to get frustrated. That being said, I believe that in the long run good businesses will continue to shine despite short-term setbacks. Good luck!

  13. @Rick, I think your concerns and frustration are justified. The recent controversy over Yelp sales people offering to remove the negative reviews of their advertisers highlights the importance of accountability and transparency for Yelp and other rating sites. Without those two elements, these sites risk becoming irrelevant because users won’t trust the reviews and business owners like yourself will continue to get frustrated. That being said, I believe that in the long run good businesses will continue to shine despite short-term setbacks. Good luck!

  14. Two things.

    I think the idea that Facebook should integrate business recommendations through the social graph is definitely the next step for Facebook. Figuring out how to involve business (ie. how to better integrate advertisement capabilities) into this huge environment of people and their friends is something that has to be one the top of their priority list. I am not so sure how they draw the line between offering a full-scale review site for businesses and how to use that traffic for revenue. More ads is too lame. Featured results is intrusive and unfair. Some peaceful balance is the way to go I guess.

    With the enormous user base that Facebook has, I don’t see why they need to really buy Yelp anyways. First, the restaurant reviews on Yelp are getting old. I actually think starting from scratch is just a much better way to go and unfortunately for Yelp, Facebook could push a review site, integrate it into everything, and Yelp would go away in no time.

    Having reviews linked socially is great though. I don’t really have a vision though how Facebook would integrate a Yelp feature set that would make it more like a Facebook feature and less like just any old Facebook app.

  15. Two things.

    I think the idea that Facebook should integrate business recommendations through the social graph is definitely the next step for Facebook. Figuring out how to involve business (ie. how to better integrate advertisement capabilities) into this huge environment of people and their friends is something that has to be one the top of their priority list. I am not so sure how they draw the line between offering a full-scale review site for businesses and how to use that traffic for revenue. More ads is too lame. Featured results is intrusive and unfair. Some peaceful balance is the way to go I guess.

    With the enormous user base that Facebook has, I don’t see why they need to really buy Yelp anyways. First, the restaurant reviews on Yelp are getting old. I actually think starting from scratch is just a much better way to go and unfortunately for Yelp, Facebook could push a review site, integrate it into everything, and Yelp would go away in no time.

    Having reviews linked socially is great though. I don’t really have a vision though how Facebook would integrate a Yelp feature set that would make it more like a Facebook feature and less like just any old Facebook app.

  16. Yelp isn’t that popular outside of San Francisco in my experience. Facebook needs to think bigger than Yelp. And the company that goes after Twitter should be Google imo.

  17. Yelp isn’t that popular outside of San Francisco in my experience. Facebook needs to think bigger than Yelp. And the company that goes after Twitter should be Google imo.

  18. I’d like to like Yelp, I really would, especially given the power of online reviews to influence buying behavior. We even have one of those “People Love Us On Yelp” stickers outside our office and I have used it to check ratings myself.

    Our customers are worldwide and relatively fanatical in their loyalty. I find it amazing how much positive press we get that isn’t orchestrated.

    When we moved to our new location, none of our reviews followed which is frustrating but I can accept. Unfortunately going live at the new address coincided with some technical issues that resulted in two poor reviews (which we deserved). Things eventually righted themselves and positive reviews followed leaving us with a respectable score.

    Last week I checked our page and all but one positive review were removed. Their FAQ says it can happen and you have to live with it. Doesn’t exactly leave me with a good taste in my mouth form my business perspective but it undermines my faith as a user as well. As such, I don’t think I would consider them for advertising dollars moving forward.

    Going to stick my neck out and provide the url to our Yelp page despite how poorly we fare.
    http://www.yelp.com/biz/tiny-prints-mountain-view-2
    Here’s our old location page which no longer shows up in their search:
    http://www.yelp.com/biz/tiny-prints-mountain-view

    I know we have a very good overall reputation if all reviews were displayed.
    Do I take down the sticker I mention above if I’m the only one who knows it?

    Curious to know if anyone feels that I’m out of line with my frustration.

  19. I’d like to like Yelp, I really would, especially given the power of online reviews to influence buying behavior. We even have one of those “People Love Us On Yelp” stickers outside our office and I have used it to check ratings myself.

    Our customers are worldwide and relatively fanatical in their loyalty. I find it amazing how much positive press we get that isn’t orchestrated.

    When we moved to our new location, none of our reviews followed which is frustrating but I can accept. Unfortunately going live at the new address coincided with some technical issues that resulted in two poor reviews (which we deserved). Things eventually righted themselves and positive reviews followed leaving us with a respectable score.

    Last week I checked our page and all but one positive review were removed. Their FAQ says it can happen and you have to live with it. Doesn’t exactly leave me with a good taste in my mouth form my business perspective but it undermines my faith as a user as well. As such, I don’t think I would consider them for advertising dollars moving forward.

    Going to stick my neck out and provide the url to our Yelp page despite how poorly we fare.
    http://www.yelp.com/biz/tiny-prints-mountain-view-2
    Here’s our old location page which no longer shows up in their search:
    http://www.yelp.com/biz/tiny-prints-mountain-view

    I know we have a very good overall reputation if all reviews were displayed.
    Do I take down the sticker I mention above if I’m the only one who knows it?

    Curious to know if anyone feels that I’m out of line with my frustration.

  20. Great post! Yelp is more than just a restaurant-rating site. I move frequently and recently found my new doctor via Yelp! I asked the doc whether she knew that she was being rated on Yelp, she had no idea that the site existed but said that she would check it out.

    Thanks to you, Robert, their other rating services are getting some well-deserved publicity, but they also need to do some work to rebrand themselves.

  21. Great post! Yelp is more than just a restaurant-rating site. I move frequently and recently found my new doctor via Yelp! I asked the doc whether she knew that she was being rated on Yelp, she had no idea that the site existed but said that she would check it out.

    Thanks to you, Robert, their other rating services are getting some well-deserved publicity, but they also need to do some work to rebrand themselves.

  22. I can’t agree more. Yelp can rate pretty much anything and a Facebook/Yelp combination could be a very interesting competitor to TripAdvisor/Expedia and make it a bit more challenging for Google to diversify from a pure ad play in the travel space – especially via the ratings path.

    Remember Microsoft had originally planned Sidewalk for location-centric services while they were building Expedia – it was a bit more local event oriented, but location-centric services linked with travel transactions is a huge segment that can help monitize all those users.

  23. I can’t agree more. Yelp can rate pretty much anything and a Facebook/Yelp combination could be a very interesting competitor to TripAdvisor/Expedia and make it a bit more challenging for Google to diversify from a pure ad play in the travel space – especially via the ratings path.

    Remember Microsoft had originally planned Sidewalk for location-centric services while they were building Expedia – it was a bit more local event oriented, but location-centric services linked with travel transactions is a huge segment that can help monitize all those users.

  24. Agree w/Drew. I like Yelp, and if Facebook created the simplest implementation of the same functionality that was public-facing, it would take off. But some acquisitions can happen for reasons like gathering intellectual capital/staff/talent, or blocking the competition.

  25. Agree w/Drew. I like Yelp, and if Facebook created the simplest implementation of the same functionality that was public-facing, it would take off. But some acquisitions can happen for reasons like gathering intellectual capital/staff/talent, or blocking the competition.

  26. Sustainability demands that you provide a product or service that people want or need and that you do it as good as or hopefully better than your competitors.

    Therefore, the identities of the advertising originators and the marjeting “propagaters” eventually become secondary in importance to the quality product or service.

    Facebook and Twitter are current pop culture fads whose long-term survivability depends solely on their situational awareness. They must adapt quickly and effectively to rapidly changing technology and an oft fickle cyber-culture.

  27. Sustainability demands that you provide a product or service that people want or need and that you do it as good as or hopefully better than your competitors.

    Therefore, the identities of the advertising originators and the marjeting “propagaters” eventually become secondary in importance to the quality product or service.

    Facebook and Twitter are current pop culture fads whose long-term survivability depends solely on their situational awareness. They must adapt quickly and effectively to rapidly changing technology and an oft fickle cyber-culture.

  28. Great post. This would be a very interesting strategic move on FBs part, instant population of “yellow pages” directly onto the social graph of its existing user base. It would cause a massive infusion of the “everyday” person onto the Yelp functionality, Yelp is popular but you can bet most of Facebook are not active users of it.

    Restaurant recommendations (and other things now) would be rampant into the news feeds (hopefully in some un-annoying way). And businesses would have to pay FB for advanced pages and functionality (possibly promotions and location-based advertising models as well). Of course, as the mobile web takes even further shape, location based services like Yelp are going to be huge.

  29. Great post. This would be a very interesting strategic move on FBs part, instant population of “yellow pages” directly onto the social graph of its existing user base. It would cause a massive infusion of the “everyday” person onto the Yelp functionality, Yelp is popular but you can bet most of Facebook are not active users of it.

    Restaurant recommendations (and other things now) would be rampant into the news feeds (hopefully in some un-annoying way). And businesses would have to pay FB for advanced pages and functionality (possibly promotions and location-based advertising models as well). Of course, as the mobile web takes even further shape, location based services like Yelp are going to be huge.

  30. Matt: you need to back that up. Explain what you mean.

    Drew: you sound like those Microsoft engineers who used to tell me that they could build Facebook or Digg in a week. Bullshit. Yelp stickers are on businesses all over town. They are also all over Google, which is how Maryam found that Yelp had doctor reviews. Facebook can’t gain that territory easily. It’s easier to buy those.

  31. Matt: you need to back that up. Explain what you mean.

    Drew: you sound like those Microsoft engineers who used to tell me that they could build Facebook or Digg in a week. Bullshit. Yelp stickers are on businesses all over town. They are also all over Google, which is how Maryam found that Yelp had doctor reviews. Facebook can’t gain that territory easily. It’s easier to buy those.

  32. I’ve randomly bitched and moaned about your posts, and generally I’ll defend what I say. This one is actually smart. The fact that I work for tripadvisor.com has nothing (nothing I say.. please believe me). to do with it.

  33. I’ve randomly bitched and moaned about your posts, and generally I’ll defend what I say. This one is actually smart. The fact that I work for tripadvisor.com has nothing (nothing I say.. please believe me). to do with it.

  34. Scobleizer, you hit this one on the head. Here in Philly I run a plumbing service company with my father and we spend around $8K/month to advertise in two yellow page books that cover the city. Eventually this medium will not exist and will move totally on the internet. I dont like the “yellow page” people and can see Yelp getting larger as non-restaurant businesses get listed on their site. If after every plumbing job we complete we offer a coupon to have them “like” us on Yelp that would be huge. To be the one of the first plumbing companies to do this will give us a heads up. For the most part, plumbers and technology dont coexist.

  35. Scobleizer, you hit this one on the head. Here in Philly I run a plumbing service company with my father and we spend around $8K/month to advertise in two yellow page books that cover the city. Eventually this medium will not exist and will move totally on the internet. I dont like the “yellow page” people and can see Yelp getting larger as non-restaurant businesses get listed on their site. If after every plumbing job we complete we offer a coupon to have them “like” us on Yelp that would be huge. To be the one of the first plumbing companies to do this will give us a heads up. For the most part, plumbers and technology dont coexist.

  36. So if Facebook acquired Yelp, you think they just integrate it into Facebook? Or keep Yelp as a separate entity?

  37. So if Facebook acquired Yelp, you think they just integrate it into Facebook? Or keep Yelp as a separate entity?

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