Theres been a lot of buzz lately about how social networking services hold dangers for small and midsize businesses. Yelp in particular continues to come under fire from SMBs who say the company has promised to hide bad reviews  if they advertise with the service.As I noted in a Web 2.0 post last week, the coverage has been especially intense here in the Bay Area, with exposes printing in the San Francisco Chronicle and East Bay Express.

Yelp has been very aggressive in rebutting these kinds of allegations  heres a blog post responding to the East Bay Express article from Yelp CEO Jeremy Stoppelman.

But now the tech press is starting to weigh in, too. For example, ZDNet senior editor Sam Diaz felt the need to fire back at what he saw as Stoppelmans unfair attack on the East Bay Express writer!

In many cases, Yelp says that changes in reviews that businesses complain about are the just the result of the automated operation of a complex algorithm that sorts and sometimes removes reviews according to a variety of factors  and any relationship to a business advertising or not is purely coincidental. CNETs Elinor Mills likens the situation to the fallout that often occurs when Google tweaks its ranking algorithms.

NOTE: Google has its own issues with small businesses. For instance, a post on Web Guild says small business owners are finding their companies listed as Place closed on Google Maps unless they buy Google Adwords.

Like Google, Yelp wont reveal much detail on the algorithm for fear that users will game the system. That makes it very difficult to assess whats really going on here. For my money, though, the fact that these allegations keep coming back should be a warning sign to Yelp and merchants alike. Businesses will definitely want to stay aware of how they appear on Yelp and other services. There may not be all that much they can do about any problems they see, and Yelp isnt going away, but knowing theres a problem is the first step to dealing with it. (As noted in my last post, Yelp does offer tools and FAQ for business owners.)

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