Yelping for Dollars

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Yelp's not alone in paying users to generate content—though it may be more successful. Netscape.com's Jason Calacanis offered to pay top contributors to social-bookmarking sites like Digg and Reddit if they would quit and do the same work for his site. Few made the jump. "It isn't a money thing," says Karim Yergaliyev, a sophomore at the University of Maryland, whom Calacanis tried to lure away. "I like my friends there, I know what to look for," he says. "I like the Digg community." Calacanis didn't respond to requests for comment.

Yelp's Simmons says that all employees are expected to be transparent about their relationship with Yelp. He adds that the main emphasis for marketing assistants isn't generating activity on the site, but rather offline promotions.

Building Buzz

That's something Yelp, founded in July, 2004, has down to a social science. Like Tom Sawyer convincing pals that it's fun to paint a fence, the founders and Yelp Community Manager Nish Nadaraja used charm and trendy friends to make writing reviews for Yelp feel like a big party for San Francisco locals. Already influential in Silicon Valley, the PayPal alums persuaded trendsetting friends with a deep knowledge of the city to write for them to get off the ground. Then the team began throwing parties for "elite squad" users, those members who had written numerous high-quality reviews. The network effect took over, and now more than 4,500 restaurants and 2,600 shops are up on Yelp, and most locations have more than one review. More than a handful of users have written more than a thousand reviews apiece.

Building buzz is a lot harder when Yelp enters new cities. Last year the team grappled with how to take off in markets such as Chicago, New York, Boston, and Seattle. At first they tried a simple approach: For the first few weeks they would pay people $1 per review, in order to stock those areas with reviews. That filled the site with content, but not all of it was good. And it failed to give the community legs. "It didn't do anything to build an initial community," says Yelp's Donaker. "These weren't passionate users."

The job was a lot easier in nearby Los Angeles. Even without goading by Yelp management, dedicated users from San Francisco had begun writing reviews of places they had visited while on trips to the city, and San Francisco transplants to L.A. began to take an active interest in building up the site and encouraging fellow Angelenos to do the same. "We had a burgeoning little community on our hands," says Donaker. To keep the growth going in that city, the team hired a Community Manager for Los Angeles, who would throw "elite" parties like the ones in San Francisco, send out weekly newsletters with events in the city, and "keep the site warm" says Donaker, by complimenting new users' reviews and starting conversations on the talk boards.

Fostering Communities

For the cities that don't yet have communities to manage, Yelp is hiring go-getter marketing assistants to stoke the fire both on and offline. This fall it advertised the jobs in Austin, San Diego, Washington, D.C., and Atlanta. "Could Yelp.com be the next YouTube?," asked a Nov. 9 ad on Craigslist in Atlanta. "According to Time magazine we could be. This critical role includes: writing witty and insightful reviews…getting your well-written friends (and their friends) to join Yelp…moderating Talk Boards, creating Lists, sending Compliments…[and] spreading the word about Yelp to the broader community."

If Yelp can attract such loyal users in every market and keep them involved, it can grow into a valuable resource for users and a lucrative ad magnet. But it has a lot riding on identifying cool, influential people and inducing them to spark interest—even if it has to use money to do it.

Helm is marketing editor for BusinessWeek in New York .