Businesses and The Fake Review Phenomenon

At one point or another, we have all sought input from others to help us make a decision. It’s a common problem to struggle with finding a delicious restaurant to eat at, deciding which brand of an item to buy, or choosing a place to purchase your Christmas tree. The Internet has helped consumers make more informed choices, and a growing number of people are turning to online review sites to help them navigate a wide range of options. Per Kelli Grant of Marketwatch:

In December, visits to the popular local-business review site Yelp.com were up 15%, year-over-year, according to Web traffic analysis site Compete.com. Similarly, travel review site TripAdvisor.com saw an 8% increase in visitors, and traffic to local-services review site Angie’s List jumped a whopping 80%. What’s behind the rising demand? In a 2012 report from market research firm Nielsen, 70% of consumers said they trust online reviews, a 15% increase from 2009. That means online reviews are second only to personal recommendations from family and friends as the most trusted source of buying advice, researchers say.

As the online review industry explodes, it’s fair to question how reliable these sites are. Is consumer trust misguided? Bing Liu, a professor at the University of Illinois at Chicago, believes as many as 30% of online reviews are fake, and Gartner research expects that number to rise in the coming years. Scour the Internet, and you can find companies willing to pay consumers small sums of money to write fraudulent reviews of products or services they have never tried out.

The motive for such unethical behavior is financial gain and market share increases. On the one hand, some companies commission writers to post reviews lauding the specific entity. By the same token, loyal employees–hoping to help their organization out–take to the Internet posing as customers gushing about their experience. The logic is simple; positive reviews provide a tangible impact on a business’s financial performance.   A 2011 Harvard University study determined that a one-star-better difference increased sales anywhere between 5% and 9% for an independent restaurant. On the other hand, organizations commission negative feedback that can cripple a business. Nobody wants to eat at a restaurant that receives one star on Yelp. Knowing this, competitors find people to write scathing reviews and drive traffic away from the competition.

Despite the disturbing trend, consumers should continue to use these online review communities and follow a few common sense guidelines. First, put more stock in profiles with multiple reviews. It is easy for one or two fake posts to skew the entire perception of a restaurant. However, if you see a pattern of reviews underscoring the delicious carne asada at Danny’s Tacos in Los Angeles, chances are the food truck makes a tasty torta. Next, view overly positive or incredibly negative posts with a skeptic eye as they are prime candidates to be fake reviews. Finally, do not be afraid to ask a friend if they have had any experience with the subject in question. Online review sites can be a fantastic starting point for narrowing down possible options, but they do not need to be your only source for information.

Every once in a while, a product or service will fail to live up to the expectations generated by the online reviews. That’s just the cost of making decisions based on information provided by often anonymous sources. However, consumers face similar risks when they ask friends for help in making a purchasing decision. Who hasn’t seen an awful movie a friend raved about? A few bad experiences should not be a deterrent. On average, these sites provide a relatively comprehensive database that effectively and concisely aggregates insightful information about the restaurants, products, and other businesses vying for our disposable income.

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Marissa Mayer and The Remote Employee Fiasco

At the age of 37, Marissa Mayer left her post as a Google vice president on July 16, 2012, to take over as Yahoo!’s new CEO. The young executive was charged with the arduous task of reviving the struggling Internet company and focusing employee efforts on core competencies. So far, Wall Street has been impressed with her work, boosting the stock price up by $5.52 (35.39%) per share to a 52-week high of $21.16 since the announcement she would grab the reins.

Mayer continued to make waves earlier this week when she declared that full-time employees working remotely and telecommuting would have to physically come into the office starting in June. Previously, Yahoo! had a very liberal policy giving workers flexibility.  In a memo to employees, the human resources department declared:

“To become the absolute best place to work, communication and collaboration will be important, so we need to be working side-by-side. That is why it is critical that we are all present in our offices.”

Outside reaction has been overwhelmingly negative. People argue that these employees, some who took the position assuming they could work from home, have to pick up in a matter of months and move their families to the Bay Area. Furthermore, they propose that face time in the office does not directly correlate with productivity, and the only result will be lowered morale. Yahoo! employees as a whole aren’t coming out in support of the initiative, either. Many sources have sent tech reporter Kara Swisher snarky comments taking jabs at the new policy.

The company would not elaborate on the number of employees the move will affect. However, it is believed that many employees telecommute at least one day a week in addition to the hundreds of workers that work from home full time. Yahoo!’s old policies on telecommuting were very similar to other tech companies, allowing employees to use their discretion. But the practice is not exactly encouraged across the sector. Google CFO Patrick Pichette spoke about his company’s view recently: 

“The surprising question we get is: ‘How many people telecommute at Google?’ And our answer is: ‘As few as possible’ … There is something magical about sharing meals. There is something magical about spending the time together, about noodling on ideas, about asking at the computer ‘What do you think of this?’ These are [the] magical moments that we think at Google are immensely important in the development of your company, of your own personal development and [of] building much stronger communities.”

Though the policy change might seem drastic, Mayer needed to take swift action to help get Yahoo! back on track. The Internet company once stood as a market leader. In fact, Yahoo! was founded three years before current industry-leader Google. However, the company has remained stagnant as other players have shown tremendous growth. The lack of success can be attributed heavily to a shortage of innovation and a culture of disparate efforts. A few former Yahoo! employees have confirmed that many were taking advantage of the work-from-home policy. Managers could not be reached for guidance. Some were dedicating time to other ventures while on the clock.

When employees are not in the office consistently, it creates a whole host of problems. Because employees are not interacting face-to-face on a daily basis, there is not a sense of camaraderie. Workers do not feel part of a larger organization, and they are not as motivated to pour their heart and soul into value-creating activities. Furthermore, impromptu idea sharing does not take place in cubicles, cafeterias, or at the water cooler. The creative process is limited to scheduled meetings, which makes it difficult for Yahoo! to introduce and cultivate innovative new initiatives. Last but not least, productivity suffers. Workers stationed remotely are likely to begin their day later, be distracted by a variety of chores, and call it quits earlier than they would if they were in the office. Marissa Mayer has a duty to her employees to create an exciting place to work. Morale is an important component, but it can’t be the sole focus at the expense of productivity and efficiency. It’s obvious that the previous policies were being abused, and she deserves credit for trying to infuse accountability and cohesion into Yahoo’s fabric as they look to regain prominence.