Something to Yelp About

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But Yelp has gotten off to a strong start, painstakingly building legitimacy market by market. It encourages locals to write reviews so other locals will consider Yelp an authority, and then rewards active users with its infamous open-bar parties. So you're more likely to read about Yelp in the style and culture sections of a local newspaper or the Village Voice than in the business section, or BusinessWeek. All of which is fine with Stoppelman: "We just want to be part of local culture, and if the Village Voice is talking about us, we're probably legit in New York."

A PayPal Pedigree

Another reason Yelp is off the business-press radar is that unlike a lot of Web 2.0 experiments of the early 2000s, Yelp doesn't see itself selling any time soon. Stoppelman and Simmons were both part of what's come to be known as the PayPal Mafia, the group that famously helped launch the successful online payment service that later sold to eBay (EBAY)—a rare handful of entrepreneurs who didn't get burned when the Nasdaq crashed.

In the wake of the bust, Simmons went to Hawaii and Stoppelman went to Harvard. But separately lured by PayPal co-founders Max Levchin and Peter Thiel, they each came back to the Valley to build something big. Unlike Digg or Flickr, which was later sold to Yahoo, Yelp was more than a hobby that turned into a success.

Doing Business the Old-Fashioned Way

Another contrast between Yelp and other consumer-Web startups: Stoppelman insisted on building his own ad sales force from day one. That lifted Yelp's costs dramatically, compared with peers that outsource ad sales to the likes of Google, Microsoft (MSFT), or Federated Media. But Stoppelman knew he couldn't sell to local businesses using computers and mathematical models à la Google. He'd have to do it the old-fashioned way, manning the phones, calling one local business at a time.

That's not glamorous work, no matter how many parties Yelp throws. And despite its success, Yelp still has a long slog ahead. It won't get any easier as the economy slumps into a recession. But if the company continues on its current trajectory, it could become one of the very few billion-dollar names to come out of the Web 2.0 generation.

If Yelp does, it won't be a fluke; the company will have earned it. Until then, Stoppelman & crew have come to terms with getting no love and say with a pout that they're O.K. with being under the radar. "Real business is happening but no one seems to care," Stoppelman says. "Honestly, I don't want the hype. I don't need people thinking we're awesome. We'll just keep doing it."

Sarah Lacy has been a business reporter for 10 years, most recently covering technology for BusinessWeek. Her book, Once You're Lucky, Twice You're Good: The Rebirth of Silicon Valley and the Rise of Web 2.0, will be published by Gotham Books in May, 2008. She is also Silicon Valley host of Yahoo Finance's Tech Ticker.