Yelp leaps into the underserviced consumer review space in Australia

Jeremy Stoppelman, CEO of Yelp, is in Australia for the launch of Yelp Australia. I was invited to interview him on Monday (embargoed until today) as part of a major media campaign to kick off the site.

Australia is the 13th country where Yelp has launched, with up until now all the action outside North America being in Europe. Stoppelman said that they are patient and take the time necessary to get quality data from the outset, so that users’ initial experience is positive.

In this case Yelp in July announced an exclusive deal with Sensis, the Telstra subsidiary that operates the Yellow Pages in Australia. This deal provides Yelp with the initial data to launch, plus a partner for monetization, with Sensis’ sales staff offering customers Yelp advertising options. Local search is a highly sales-intensive business, so the Sensis deal means Yelp can effectively build presence and monetize with limited local staff. It is in the process of hiring community managers in Melbourne and Sydney, where it is initially focusing.

In interviewing Stoppelman I was most interested in asking about Yelp’s reputation mechanisms, however unfortunately I drew a blank on that. “The first rule of review filtering is not to talk about review filtering,” he said. The don’t talk about the mechanisms because “it’s ultimately a cat and mouse game.” (As an alternative description I’ve said before that information filtering and reputation will be evolutionary battlefields.)

As I’ve noted before, for example in this interview I did on SkyNews, the shift to more visible reputations is a major trend, with two of the more prominent participants in Australia Word Of Mouth Online (which has recently changed its name from Word Of Mouth On the Web), which was founded in 2007, and Customer Underground, which is a bit over a year old. While WOMOW gets some half-decent traffic, it is still barely known among non-geek Australian consumers.

When I’ve discussed Yelp’s pending arrival in Australia with industry folks here, I have reflected that the lack of significant success of the home-grown sites is certainly not a fault of intrinsic lack of consumer interest. It is simply that the existing ventures have not seized the opportunity.

My guess is that Yelp will do extremely well, and soon become the de-facto business review site in Australia by applying what they have learned in many other markets, combined with the clout of their Sensis relationship. This was not an inevitable outcome. If it happens, it will be because Yelp is moving into a relative void. Given we are now in late 2011, local players have had many years to build critical mass in a space that pretty obviously will be massive in years to come.

At least it seems likely that Australian consumers will soon have a solid consumer review site.

Saying that, I should add a final word on the Yelp controversies including the recently dismissed class-action suit. I really can’t imagine Yelp’s managers would destroy a great business by doing anything other than trying to provide a genuine reflection of customers’ views. If any malicious review tweaking was uncovered, there would be an instant void that would quickly be filled by other players.