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If its an algorithm that makes the choices - why would businesses get phone calls asking for money to put them back up?

They've only really addressed half the story.

Kind of upsets me too, I have friends that work at Yelp.

He's merely speculating based on the WIRED article, he hasn't actually gotten the call. I see nothing wrong with removing some reviews that appeared algorithmically fraudulent, so Greenspun isn't really adding any evidence against Yelp.
As described, there's no actual extortion going on, just a bunch of positive reviews disappearing off of a page, and a bunch of hearsay. Is this sarcasm? Trolling?
I think Phillip Greenspun has probably earned enough reputation in the hacker community that we can assume he isn't trolling, especially considering the update he posted. The fact that a bunch of legitimate positive reviews vanished shortly after they were posted certainly looks suspicious from the point of view of a business.

Yelp's sales calls are known to include offers to restore hidden positive reviews and hide negative ones in exchange for a fee. That sounds an awful lot like extortion to me. Furthermore, as a user, I know I can't trust the information that appears on Yelp.

The title of this blog post is sensationalistic. As described by the author himself, Yelp's actions seem completely justified. A burst of 15 positive reviews from new users in a short period would make a user like me suspicious.

And assuming that the 15 reviews garnered an average score of 4.5 stars, it would have placed the business in the top 3-5 ranked business in all of Bedford, MA (its hometown). If Yelp allowed such rankings, it'd be a slippery slope into spamville.

I would assume that when a new user is excited enough to join, they would in fact rate and review many of their favorite places. I agree that its a difficult subject but removing reviews does not seem like a good approach.

I would like to see them show all the reviews and separate the ones that are not approved/flushed out. Have the reviews/rankings grayed out and require the user to hit certain publicly known goals to get their reviews to be approved status. I think this approach would also help with spam as those companies that are placing and encouraging shill reviews are easily spotted.

I agree that the title is sensationalistic. That being said, I think it's a poor product decision on the part of Yelp. Showing and then removing reviews is a lot more suspicious than not showing them at all for a period of time (until a user has made a second review, or some other criterion), or showing them but not counting their rating toward the overall business rating (until the criterion are met).
Not showing the review would put users off. Users need instant feedback. "I wrote something -- it got posted in a second" If they had to wait a day or two, they would not use the site. The second idea of showing reviews but not counting the rating is better, but then after a while it seem these reviews should be garbage collected, which is apparently what happened.

On the vendor's side, telling your users to post good reviews for discounts or for promotions is a bit like spamming I think. There is no good way to 100% detect spam like this, so there is always going to be controversy.

Also, hopefully Yelp has enough lawyers if it operates in a country with loose libel/slander laws.

I've personally spoken to a restaurant owner that told me that a Yelp salesperson told him that negative reviews would be removed if he signed up.

Nothing they do will really surprise me anymore.

I once did some market research for a project in which I tried to get in contact with a Yelp sales rep for a real business. After waiting a full month, they finally called me. It was the most unprofessional sales call I've ever encountered. Girl was making jokes with her friends in the background, couldn't explain to me what they give you for $400/mo, kept trying to get off the call. Sounded like a bored intern, told me to 'uh call back or something' when I wanted to buy the plan. I could tell she sure as hell wasn't a trained salesperson.

I also talked to Citysearch. Called me back within 24hrs, had a ton of talking points, offered to come to my office the next day with a presentation, gave me her personal cell number. World of difference and professionalism.

I almost got the sense that the Yelp girl didn't know how to sell Yelp's plan without offering to cure bad reviews. Since there weren't any there, she didn't know how to sell it...

If this is a widely practiced tactic and not just a few renegade sales reps, then it's going to get ugly. Someone is going to record these phone calls and release them. Whether it's legal to do that or not, it won't matter. Once they're on the net everyone will hear them and they will be permanent.
And Yelp will just claim they were by interns or renegade sales people and carry on.
Should Yelp just tell people how it decides what is spam?

This would alleviate some of its reputation problems but, then adversaries would know exactly how to game the system.