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. Scoble good thoughts.

    I’ve been thinking for sometime now how Twitter is about authentic, personal interactions, which I simply do not see fitting into this new ‘Facebook-page-like’ model that’s being suggested.

    Comparing to the two phone books is an excellent analogy which hits the nail on the head. Lets go back to basic branding – clarity, niche, specifics. A monetized, business focussed twitter is mixing the wrong markets.

  2. they inherently embody

    Who said anything about me? I was saying I like Zagat and Fodors over Yelp. Expert opinions, well-written and to the point, without all the massive noise. Just my preference, if you’d rather the loud-mouthed slandering New Yakkers, so be it.

    And I thought stabbing people who put their hand out, casing your employer (Microsoft sucks etc.) makes you not a shrill and more authentically human, or some social media blather like that. My full modus operandi is a complex and multilayered thing, many masters to serve, more akin to strategy, though I have always loved “strategery”, as when you really think about it, it’s so much deeper than plain old boring “strategy”, it kind of conveys having a strategy about a strategy. A goof that was brilliant, imho. :)

  3. they inherently embody

    Who said anything about me? I was saying I like Zagat and Fodors over Yelp. Expert opinions, well-written and to the point, without all the massive noise. Just my preference, if you’d rather the loud-mouthed slandering New Yakkers, so be it.

    And I thought stabbing people who put their hand out, casing your employer (Microsoft sucks etc.) makes you not a shrill and more authentically human, or some social media blather like that. My full modus operandi is a complex and multilayered thing, many masters to serve, more akin to strategy, though I have always loved “strategery”, as when you really think about it, it’s so much deeper than plain old boring “strategy”, it kind of conveys having a strategy about a strategy. A goof that was brilliant, imho. :)

  4. Twitter = mindless blabber.
    Yelp = Some seriously helpful and well-written content + some quasi-thought out content + some completely insipid and/or mindless blabber.

    I’m still going to give Yelp the win on this, and – since I use both (as do a good deal of my cohorts) – I’d be perfectly down with having them combined.

    ~a

  5. Twitter = mindless blabber.
    Yelp = Some seriously helpful and well-written content + some quasi-thought out content + some completely insipid and/or mindless blabber.

    I’m still going to give Yelp the win on this, and – since I use both (as do a good deal of my cohorts) – I’d be perfectly down with having them combined.

    ~a

  6. Excellent post Robert and great discussion. You folks have really given me some food for thought here… Our current project is called The Senior List.com. It is a consumer-opinion site focused on the senior-services sector. Our goal is to become the gateway to trusted resources for the 50+ demo online. We are also entirely peer-to-peer driven… (yes we are up and fully functional now)

    This thread has given me some great ideas to incorporate into our go-forward strategy- thx for that!!! One of our big challenges has been financing the growth of our platform and brand awareness. It’s a huge focus right now-

    Best to all

  7. Excellent post Robert and great discussion. You folks have really given me some food for thought here… Our current project is called The Senior List.com. It is a consumer-opinion site focused on the senior-services sector. Our goal is to become the gateway to trusted resources for the 50+ demo online. We are also entirely peer-to-peer driven… (yes we are up and fully functional now)

    This thread has given me some great ideas to incorporate into our go-forward strategy- thx for that!!! One of our big challenges has been financing the growth of our platform and brand awareness. It’s a huge focus right now-

    Best to all

  8. Facebook is determined to maintain real identity. This is one of its biggest strengths but it is also a weakness. The other day you gave an example of looking for sushi restaurants and using facebook on your iphone to find the ones your friends like. Clearly valuable but why not get reviews from everyone that cares to share.

    This is where twitter shines – its inclusive. Facebook is exclusive. Both have their place but when I’m looking for a review of a new movie/car/etc and my friends don’t have a clue, I’ll be looking somewhere other than Facebook.

  9. Facebook is determined to maintain real identity. This is one of its biggest strengths but it is also a weakness. The other day you gave an example of looking for sushi restaurants and using facebook on your iphone to find the ones your friends like. Clearly valuable but why not get reviews from everyone that cares to share.

    This is where twitter shines – its inclusive. Facebook is exclusive. Both have their place but when I’m looking for a review of a new movie/car/etc and my friends don’t have a clue, I’ll be looking somewhere other than Facebook.

  10. I don’t think it’s as synergistic as you say it is. Yelp has a totally different community, based on shared interests and neighborhoods. Yelp, using a well-aligned community of strangers will do a much better job of gathering reviews than a loose-knit set of friends that Facebook provides. Do I really care what coffee shop my third grade classmate prefers? No.

    Honestly, Yelp + MySpace makes a lot more sense. They already have many businesses with pages and the entire experience is much more aligned around content as opposed to communication.

  11. I don’t think it’s as synergistic as you say it is. Yelp has a totally different community, based on shared interests and neighborhoods. Yelp, using a well-aligned community of strangers will do a much better job of gathering reviews than a loose-knit set of friends that Facebook provides. Do I really care what coffee shop my third grade classmate prefers? No.

    Honestly, Yelp + MySpace makes a lot more sense. They already have many businesses with pages and the entire experience is much more aligned around content as opposed to communication.

  12. Robert,
    I could never understand why Facebook should buy Twitter – it never made any sense to me. Adding a true blogging platform to FB – YESSS! but Twitter? They got 90% of that functionality as you say, already.

    As for Yelp, from an european perspective, it reminds me of Craigslist: wildly popular in California, but almost unknown everywhere else (I know, I know, I’m being superficial…)

    True, they got stickers on businesses, but Facebook has 160+ million users across the world, just waiting to be “leveraged” somehow, so yes, replicating the functionality seems faster/cheaper than buying a (large) niche user base.

  13. Robert,
    I could never understand why Facebook should buy Twitter – it never made any sense to me. Adding a true blogging platform to FB – YESSS! but Twitter? They got 90% of that functionality as you say, already.

    As for Yelp, from an european perspective, it reminds me of Craigslist: wildly popular in California, but almost unknown everywhere else (I know, I know, I’m being superficial…)

    True, they got stickers on businesses, but Facebook has 160+ million users across the world, just waiting to be “leveraged” somehow, so yes, replicating the functionality seems faster/cheaper than buying a (large) niche user base.

  14. Even if Facebook doesn’t acquire Yelp, the exact case study you outlined for your brother’s bar WILL happen on FB. If FB doesn’t hop on this and essentially kill the Yellow Pages, they are fools!

  15. Even if Facebook doesn’t acquire Yelp, the exact case study you outlined for your brother’s bar WILL happen on FB. If FB doesn’t hop on this and essentially kill the Yellow Pages, they are fools!

  16. Robert,

    I’m glad you’re continuing to think about the way that Facebook, Twitter and other social platforms can monetize all of that traffic and interactions. This struck me as a particularly useful metaphor:

    “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. When you needed a ___ 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 equivalent of the “best looking ad?” The business who has the best reviews.”

    You nail it. The social proof of good or bad reviews, customer experience and rating systems based on the collective “wisdom of the crowds” has been one of the most powerful uses for the Internet throughout its history. The tools are much more advanced now, of course, but we could see it back in the early days with IMDB.com & Amazon’s book reviews. Now everything and everyone can be reviewed and rated on FB, Twitter and LinkedIn.

    And, just as MA Bell was a gatekeeper for local businesses, now Yelp, Facebook and other platforms can manipulate or edit reviews they deem unacceptable to the community, just as you can edit your comments here if you wish — though you generally do not, I think, because of your long experience online in forums.

    The issue with Yelp may be in its role as both gatekeeper and private for-profit entity. I suspect you may have read the piece in San Francisco’s East Bay Express entitled “Yelp and Extortion 2.0.” A local alternative paper here in Boston just ran this:
    http://weeklydig.com/%5Bcatpath%5D/200903/they-yelp-me-they-yelp-me-not

    In both articles, the issue of “church & state” in editorial/community and sales/advertising was repeatedly raised. Of course, Yelp has denied any such practice repeatedly.

    I’m not convinced that either platform is the right answer for communities to use for rating systems of businesses or professional services, much less essential services like healthcare, education and emergency services — some kind of third-party without a profit motive would be preferable. The leverage that these private entities hold over a business through elevating negative reviews or removing positive ones is substantial.

    I’m glad you’re spending time blogging again, Robert, despite the allure of Friendfeed, Twitter and other online forums.

  17. Robert,

    I’m glad you’re continuing to think about the way that Facebook, Twitter and other social platforms can monetize all of that traffic and interactions. This struck me as a particularly useful metaphor:

    “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. When you needed a ___ 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 equivalent of the “best looking ad?” The business who has the best reviews.”

    You nail it. The social proof of good or bad reviews, customer experience and rating systems based on the collective “wisdom of the crowds” has been one of the most powerful uses for the Internet throughout its history. The tools are much more advanced now, of course, but we could see it back in the early days with IMDB.com & Amazon’s book reviews. Now everything and everyone can be reviewed and rated on FB, Twitter and LinkedIn.

    And, just as MA Bell was a gatekeeper for local businesses, now Yelp, Facebook and other platforms can manipulate or edit reviews they deem unacceptable to the community, just as you can edit your comments here if you wish — though you generally do not, I think, because of your long experience online in forums.

    The issue with Yelp may be in its role as both gatekeeper and private for-profit entity. I suspect you may have read the piece in San Francisco’s East Bay Express entitled “Yelp and Extortion 2.0.” A local alternative paper here in Boston just ran this:
    http://weeklydig.com/%5Bcatpath%5D/200903/they-yelp-me-they-yelp-me-not

    In both articles, the issue of “church & state” in editorial/community and sales/advertising was repeatedly raised. Of course, Yelp has denied any such practice repeatedly.

    I’m not convinced that either platform is the right answer for communities to use for rating systems of businesses or professional services, much less essential services like healthcare, education and emergency services — some kind of third-party without a profit motive would be preferable. The leverage that these private entities hold over a business through elevating negative reviews or removing positive ones is substantial.

    I’m glad you’re spending time blogging again, Robert, despite the allure of Friendfeed, Twitter and other online forums.

  18. Yelp is good for restaurants and retail stores but I wish it had more of the functionality of Angie’s List, with reviews of service people and companies. Unfortunately you have to pay to read Angie’s List.

  19. Yelp is good for restaurants and retail stores but I wish it had more of the functionality of Angie’s List, with reviews of service people and companies. Unfortunately you have to pay to read Angie’s List.

  20. Robert,

    You’ve just helped me further conceptualize my business. Thanks!!

    I develop K-12 curriculum. I’ve typically worked with major publishers like Scholastic. But, now I want to do consulting work for Web 2.0 companies. I’m going to help these companies get on the K-12 social graph. Just think about the benefits of getting on this graph: The market is huge and highly influential. Get students hooked on your product now and they’ll want to stay on your product later, as long as it continues to meet their purposes.

    I haven’t been to Yelp. But, I’m going to go and check it out. But, I’m not sure that Yelp will help me that much. After all, I’m not a bar.

  21. Robert,

    You’ve just helped me further conceptualize my business. Thanks!!

    I develop K-12 curriculum. I’ve typically worked with major publishers like Scholastic. But, now I want to do consulting work for Web 2.0 companies. I’m going to help these companies get on the K-12 social graph. Just think about the benefits of getting on this graph: The market is huge and highly influential. Get students hooked on your product now and they’ll want to stay on your product later, as long as it continues to meet their purposes.

    I haven’t been to Yelp. But, I’m going to go and check it out. But, I’m not sure that Yelp will help me that much. After all, I’m not a bar.

  22. @Christopher Coulter:

    You do need to read user comments with a critical eye, but the insights they bring are far more relevant to most people than a review, taken on a single visit, possibly two years ago, by a so-called professional.

  23. @Christopher Coulter:

    You do need to read user comments with a critical eye, but the insights they bring are far more relevant to most people than a review, taken on a single visit, possibly two years ago, by a so-called professional.

  24. Robert, what’s your analysis of simply integrating Facebook Connect with Yelp, as Citysearch has done successfully since November?

    “In the four months the site has been testing Facebook Connect, 94 percent of reviewers have published their reviews to Facebook, where an average of 40 people see them and 70 percent click back to Citysearch. That has translated into new members: daily registrations on Citysearch have tripled.”
    –NY Times

  25. Robert, what’s your analysis of simply integrating Facebook Connect with Yelp, as Citysearch has done successfully since November?

    “In the four months the site has been testing Facebook Connect, 94 percent of reviewers have published their reviews to Facebook, where an average of 40 people see them and 70 percent click back to Citysearch. That has translated into new members: daily registrations on Citysearch have tripled.”
    –NY Times

  26. Offering people incentives to write a positive review skews the system and makes the system untrustable, the top few entries in a category get filled be people gaming the system, not the real best few.
    (bad Scoble for encouraging this :) )
    However, combine it with facebook and you can now see who of your friends have rated a business and can double check that rating.
    The more popular and influential yelp becomes the more people will try to game it, just like some publishers and manufacturers (like Belkin) do on Amazon.

  27. Offering people incentives to write a positive review skews the system and makes the system untrustable, the top few entries in a category get filled be people gaming the system, not the real best few.
    (bad Scoble for encouraging this :) )
    However, combine it with facebook and you can now see who of your friends have rated a business and can double check that rating.
    The more popular and influential yelp becomes the more people will try to game it, just like some publishers and manufacturers (like Belkin) do on Amazon.

  28. On this one Robert I think you are spot on. The next 5 years or so will bring any business that wants to survive past those 5 years into the social graph. And you’re right, recommendations will be huge. I’m sure you probably saw Winer’s post on Amazon recommendations and how he relies on them.

  29. On this one Robert I think you are spot on. The next 5 years or so will bring any business that wants to survive past those 5 years into the social graph. And you’re right, recommendations will be huge. I’m sure you probably saw Winer’s post on Amazon recommendations and how he relies on them.

  30. If we’re going to see this hooked up to our social networks, this only emphasises the need for easy ways to group friends by various categories. Much as I value the opinion of my friends in the USA, I don’t see how their plumber ratings are going to be anything more than frustrating, when I need a good plumber in SE London thousands of miles away. In this instance, I want suddenly to become “friends” with the people in my immediate square mile or so, something that looks a bit tricky unless I start knocking on doors: “Hi, are you on Facebook? Wanna be friends?” is likely to work only with people I probably don’t want to know!

    I’m sure Facebook folks are thinking about this; I look forward to seeing their first attempt at a solution.

  31. If we’re going to see this hooked up to our social networks, this only emphasises the need for easy ways to group friends by various categories. Much as I value the opinion of my friends in the USA, I don’t see how their plumber ratings are going to be anything more than frustrating, when I need a good plumber in SE London thousands of miles away. In this instance, I want suddenly to become “friends” with the people in my immediate square mile or so, something that looks a bit tricky unless I start knocking on doors: “Hi, are you on Facebook? Wanna be friends?” is likely to work only with people I probably don’t want to know!

    I’m sure Facebook folks are thinking about this; I look forward to seeing their first attempt at a solution.

  32. Great Post.

    While it is true that Microblogs and Social Networks like Twitter and Facebook are popular tools
    for people to connect they have thus far not been very strong in search.

    This is why to date social networks have not been very successful in there ad efforts compared to search engines like Google.

    I think the reason for this is that the main objective for most advertising spend is to achieve two things:

    1) Attract new customers.
    2) Retain existing customers.

    Social Networks and Microblogs primary use is to exchange messages between people (both actual and more importantly perceived) and as such do not generally have an intent to successfully partner with an advertisement.

    This means that as it stands they will never be as good as search engines for attracting new customers.

    Microblogs and Social Networks are however very good for communication and therefore excellent tools for retaining existing customers. This area is where search engines are not very strong.

    The solution appears to be a hybrid Search & Social service.

    You Might want to take a look at YouPage.com where we are trying to do just that.

    Any feedback more than welcome.

    YouPage Ltd
    Real-Time Local Search

  33. Great Post.

    While it is true that Microblogs and Social Networks like Twitter and Facebook are popular tools
    for people to connect they have thus far not been very strong in search.

    This is why to date social networks have not been very successful in there ad efforts compared to search engines like Google.

    I think the reason for this is that the main objective for most advertising spend is to achieve two things:

    1) Attract new customers.
    2) Retain existing customers.

    Social Networks and Microblogs primary use is to exchange messages between people (both actual and more importantly perceived) and as such do not generally have an intent to successfully partner with an advertisement.

    This means that as it stands they will never be as good as search engines for attracting new customers.

    Microblogs and Social Networks are however very good for communication and therefore excellent tools for retaining existing customers. This area is where search engines are not very strong.

    The solution appears to be a hybrid Search & Social service.

    You Might want to take a look at YouPage.com where we are trying to do just that.

    Any feedback more than welcome.

    YouPage Ltd
    Real-Time Local Search

  34. Robert – great post, thanks. The most interesting part is that your son’s name is Milan, so is mine. (Short for Termilan, he’s from Kazakhstan).
    I’ll keep reading.

  35. Robert – great post, thanks. The most interesting part is that your son’s name is Milan, so is mine. (Short for Termilan, he’s from Kazakhstan).
    I’ll keep reading.

  36. 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

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