The odds were against Yelp when it entered the local search/directory market just under two years ago. (As an aside, I am using a the label "social directory" for sites like Yelp, InsiderPages and Judysbook because they layer community on top of a traditional directory advertising model.) Two years ago the market was already relatively mature with sites like the venerable Citysearch, the search engines and portals offering local search and/or online yellow pages. In addition, all the yellow pages publishers had sites themselves. Then there were online communities like Craigslist, not to mention newspaper sites with their local content.
So if one were to have handicapped Yelp in the beginning, one would have said it's a long shot (including this one) to achieve usage, visibility and scale. Cut to two years later and Yelp is doing it. The site started out in the San Francisco Bay Area and is now rolling out nationally. While not the most heavily trafficked local search/directory site, it arguably has one of the most engaged audiences of any of the companies in its space.
The site looks like a party. It's got lots of personality compared to some of its competitors, which seem "cold" by comparison. And it's not uncommon to find 10, 20, 30 even 40 or more reviews of numerous businesses vs. the typical one, two or five reviews on many of Yelp's competitors.
Sitting with executives from one of the big search sites several years ago, we discussed the challenge of getting user reviews from a base of zero. It's been proven that if a site has lots of community content or reviews, more will follow ? people are more inclined to go into a crowded restaurant than an empty one. But building that base of content and developing that momentum is the challenge.
Yelp has found a "formula" that appears to have worked. The site has MySpace-like profiles (its users are somewhat older on average) that offer a fairly wide range of personal expression, including photo sharing. In that way it resembles a blogging site. But that profile content sits on top of local business and entertainment content, built on a conventional directory advertising model. The "culture" and subject matter of Yelp is "directed." Thus one could describe it ? and they do internally ? as a "directed blogging" site.
In addition, Yelp has held local parties to build offline community and awareness. I've not attended any of those but my understanding is that they've been popular and quite successful for the site. And apparently these "Yelp parties" continue in some cases without the active involvement of the site.
In addition, Yelp has one of the best map-based local search tools. There's no "flyover" or zoom from space capability, but the user experience is generally very good.
If you want more information on these social directory sites, including how to gain access as an advertiser, read Phil Stelter's Local Search column this week in ClickZ.