Google Antitrust: Is It Enough for Yelp?
Photo by David Nicolai.
David: Hey, Mike. I hope you’re enjoying the unofficial start of summer. It’s been amazing to be able to have dinner outside the last few nights here.
Mike: It may be the start of summer for you, but it is 40 degrees here this morning and with the 15 mph winds, a chill factor of 35! Hardly summer. After the second rainiest May on record.
David: I guess I won’t complain about my usual 10-minute bike commute under 55-degree sunshine this morning.
As far as this week’s conversation, almost on cue, things got a little more interesting with respect to Google vs. Yelp last week. I’m sure you saw the scoop from the Wall Street Journal that Google is being investigated by the Department of Justice for possible antitrust behavior.
Mike: Yes, I guess with Yelp gaining silent allies in Microsoft, Apple, Oracle, and I am sure a few others, it was inevitable that this administration would take a look. Questions from my POV are:
- Is the consumer really being harmed?
- And is it possibly a day late and more than a dollar short?
David: I think you mean several billion dollars short. But those are both good questions. Let’s tackle them in order.
You and I had a surprisingly lively debate with LocalSEOGuide’s Dan Leibson recently, relative to the quality of Google’s results vs. Yelp’s. Dan is known for his hyperbole but contends that the (poor) quality of Google’s pack results creates some level of consumer harm.
Mike: Quality is in the eyes of the user. And they and the sites that they choose to visit ultimately define the outcome. I would contend that in some verticals Google’s results are better, in some they are worse, but if the user is choosing Google (whether by hook, crook, or choice), it is no longer an issue.
Do you think that the local results are qualitatively different between the two sites?
David: For me, it’s a little bit of a bimodal or even trimodal question. In “high-signal” categories—high-frequency-of-visit categories in urban markets like coffee, restaurants, breweries (Yelp‘s bread and butter)—I’d argue that Google does at least as good a job as Yelp at showing me three quality results near me. Are they “the best” results I could have gotten? As you say, that’s in the eye of the user. But they more than satisfactorily answer my question. If I’m skeptical, I’ll just perform a longer-tail query to dial in further.
In low-signal categories or even high-signal categories in suburban markets, Google doesn’t perform as well in my personal experience, partly because it doesn’t seem to have the “willingness-to-travel” coefficient dialed in nearly as well. I’d be willing to grant Dan that Yelp might have higher quality results than Google in those markets.
Frankly, in low-signal / rural markets, Google dramatically outperforms Yelp because no one uses Yelp in those markets—either business owners OR users.
Mike: I am of the position at this point, though, that listing quality is a moot point.
When I pull back to the 10,000-foot view, I see the story as already written. Yelp’s monthly unique user traffic, according to their reporting, is in steady decline; the mobile app is growing but not fast enough to make up for the desktop losses.
And more importantly, consumers are choosing to make Google their habit of choice for writing reviews. I have analyzed some data for restaurants over the past week that indicated that Yelp was getting more reviews per location than Google as recently as 2015, but for the past 18 months, even in California, Google is far outpacing Yelp in review count. This is important, not so much for the volume but because it portends a sea shift in user behaviors as to where they would rather spend their time.
David: As you highlighted this past week, the increased volume of reviews that Google is collecting enables them to answer searchers’ questions better than Yelp.
Should the government step in to protect Yelp from its own boneheaded product decisions to 1) dissuade businesses’ collection of feedback, and 2) stunt the formation of new users’ habits by minimizing the visibility of their reviews?
Seems to me like both consumers and the market punishing Yelp for bad decisions is the very essence of free-market capitalism.
Then again, this administration is wasting tens of billions of taxpayer dollars to protect itself from its own boneheaded decisions to upend the free market. So, maybe Yelp has a natural ally here.
Mike: I see Yelp as firmly occupying a niche of long-form review writers and urban, coastal users. And even that user base is eroding.
Here is some of the data that I received of a restaurant chain’s review data over time that I found interesting. Essentially, Yelp is generating as many reviews per location as they did in early 2015. When Google unshackled reviews and started doing a better job on local, their review volume really took off.
If Yelp’s user base is eroding, their advertising become less effective and effectively more expensive, leading to churn there. It appears to be a downward spiral to me.
David: I’m not averse to the idea of the government regulating Google’s practices in Maps or local search, but it feels like rewarding Yelp in particular is not going to bring consumers any particular benefit, nor will it meaningfully benefit small businesses, as Elizabeth Warren seems to indicate is a primary goal of her plan.
If anything, Google has gone out of its way to help small businesses compete in its search results with the introduction of the local pack and the Venice update, whereas small businesses continue to rate Yelp as poorly as any company in tech.
Mike: And government antitrust outcomes tend not to be crafted around Main-Street needs but rather the needs of the big business that has Congress’s ear.
But I think that any government action that favors Yelp might be too little and too late as far as Yelp is concerned. I fear that, at best, unless Yelp bucks the trend of users’ habit to now leave reviews at Google, Yelp will stay in the limited niche they are currently in.
David: Nonetheless, you’ve seen a few examples that Google may be preparing for an inevitable ruling against it. Care to share them with our readers?
Mike: That I have. It is a pretty startling test of giving Yelp an incredible degree of exposure in the SERPs.
David: Whoa, there’s a lot to unpack there. The scrolling Yelp Pack is what stands out to me the most as the biggest change. Obviously, there’s also the scrolling Google Pack, but that’s old news at this point 😉 Sure would be interesting to see the clickstream data on those!
Perhaps that’s part of Google’s goal in rolling out this test: to provide data for the antitrust investigators to mull over. If the clickthrough rate on businesses in Google’s scrolling pack results meaningfully exceeded those in Yelp’s scrolling pack, it’d be a slam-dunk case that users simply preferred Google to Yelp.
Mike: I am not sure that if Google throws them a few bones that will be enough to once again kickstart Yelp user growth. It is stalled or declining, and getting users back will be hard. It would need to be a pretty radical antitrust settlement to change that reality. At best, it would keep Yelp kicking and maintain a presence, even if not a major one.
After more than a decade in local search, David Mihm now serves as VP of Product Strategy at ThriveHive, leading the direction of the company’s search-related product offerings. He’s also the Founder & CEO of Tidings, an email newsletter platform for small businesses that leverages their everyday social media activity, and his own weekly newsletters, Minutive and the Agency Insider. He’s the former founder of GetListed.org, Director of Local Strategy at Moz, and along with Mike, he’s a co-founder of Local University.