Yelp has obviously always wanted the spot of top dog in the general review world, moving out of their niche in restaurants and large markets several years ago. Google recognized Yelp’s strong position and made a play for them in late 2009. Obviously Yelp felt that their independent position was defensible. At the time, Google’s review efforts were lagging and Yelp was expanding across many fronts.

In their effort to buttress the public and market perception of themselves as the front runner in the general review world, Yelp has often touted both the quality and quantity of their review corpus. They proclaimed in March of 2010 of having reached 10 million reviews and again last December they stated that they would have 15 million reviews by the end of 2010. Last week the publicly offered number had now reached 17 million. Talk big and the markets perceive you as big. It’s what I call the Peacock Method of marketing.

Google on the other hand never would make a comment as to how many reviews that they had accumulated since rolling out reviews in 2007. It was understandable why Google never made a public comment. My back of the napkin calculations indicate that Google had only managed to accumulate a million or so reviews prior to the mid November rollout of Hotpot.

But things started to change after the rollout of Hotpot. Google essentially democratized the review process and made providing a rating much easier. It became obvious to me that they were making huge strides in gathering these ratings as well. By January, ratings were showing up in rural areas and mid major markets where Yelp has had little traction as well as in technically savvy and larger markets that had been Yelp’s strong hold. The ratings were also showing up in industires that were not traditionally review honey pots outside of Yelp’s central strength in restaurants. My calculations in mid January were that Google was managing to suck the air out of the general review world and moving towards parity with Yelp. The dominance that they crave and need, was even becoming conceivable.

When Marissa Meyer announced at SXSW conference that Google had garnered 3 million ratings and were achieving a greater than a 1 million a month run rate (Yelp’s run rate is in the 700,000 range), it was clear that the game for Google had changed. Traditionally Google has highlighted traffic or quantities of a given product when and only when they sensed that they were in the hunt for their objective. If you remember the many times Carter Maslan refused to answer the question of how many businesses had claimed their listing in Places. That was until they surpassed 4 million and now we hear the statistic on a regular basis.

Why is this important?

It reflects a watershed moment in the review marketplace. The opportunities going forward to be a dominant player with a general review site are greatly diminished. Markets, like the review market, will typically evolve towards an oligopoly and away from broad competition. Like desktop OSes and Search it will tend towards monopoly because of the huge benefits of scale and the network affects. It also means that Yelp is now in a much more critical battle, to not just be one of the players but to be the player.

The danger to Yelp in this battle is on several fronts but particularly so on the PR one. If you live by the sword you often die by the sword. Yelp’s long adherence to the review count as an indicator of who is king, while long postioning them as the leader, may now come to haunt them as Google accumulates an ever greater number of ratings. The reality of who has the most reviews/ratings is in actuality irrelevant but Yelp’s long reliance on the metric could well be their undoing as the market perceives Google as catching up.

But wait, Yelp notes that reviews are better than ratings. See, they say, we have long form content from dedicated reviewers offering up subtle details that ratings can’t capture. That may be true but perception is everything.  I have a sense that the market and users won’t care.

In many ways, ratings are the new reviews and while not as substantial, the fact that so many more people are likely to create them, dramatically increases their value to both the search and social sides of the equation. It also minimizes the ability of businesses to game them. Yelp has long relied on a small, dedicated community of avid, perhaps rabid, reviewers. Not very welcoming to the novice.

But once again, like on review count, these are PR battles that Yelp is not likely to win. Steve Jobs long ago realized that it was hard to value add if you were competing on techs and specs. In many ways review counts and the distinctions between reviews and ratings are like that. Jobs, in switching over to Intel, decided to no longer fight that battle on the desktop. Now, in the new phone and tablet markets of Apple’s creation, he has assiduously kept the conversation on benefits real and imagined not speeds and feeds.

It may be too late for Yelp to change the conversation away from total reviews and towards the benefits that they do offer. Working to increase the accessibility of their reviewer community rather than going mano a mano with Google on review/rating volume might be a better strategy. Touting the benefits to the reader of their site and system and reaching out more aggressively in smaller markets to counter Google’s recent city by city push might also work. Otherwise, long haul, they run the risk of not just of coming in second in the review total race but ending up in a rarely visited cul de sac populated with weirdos like DMOZ.org.

That Yelp will be a strong contender in the general review/rating space is obvious. Now the race is on to see who can be top dog in that market as the bulk of the benefits in a oligopoly go to the the market dominant player. But the winner may just be defined by the PR battle rather than the reality and Yelp may have fostered a conversation in which there is no winner.

Will Yelp win the public relations battle? Do you think that they will retain their position of the leading review site? If so for how long?

Welcome to the next round of My Review Corpus is Bigger than Your Review Corpus! May the company with the biggest corpus dominate.