For purpose of this answer, I am considering  (a) Websites with user-generated reviews (Think Yelp, IMDb) (b) Websites  expert/critic reviews (Think Zagat, Consumer reports) (c) Independent review blogs (d) Websites for which reviews are not the primary business (Think Facebook, Google). However, I have excluded businesses like Amazon and Expedia, which include reviews for products and businesses that they are selling.

Here are some popular monetization models for these sites.

  1. Advertising: This is the most popular form of monetization for review and rating websites. Usually, the “reviewed” side advertises to review-readers/writers, like restaurants advertising on Yelp, lawyers advertising on Avvo or movie studios advertising on IMdB. However, in some cases, businesses other than the ones from reviewed side of the platform may also target review-readers. For example: MTV shows their own ads on ratemyprofessors.com (You don’t expect professors to advertise to their students, do you? :)). Independent review bloggers also use advertising, usually through content ads through Google AdSense or similar means.
  2. Subscription services to customers: Some websites may charge a subscription fee for access to their content. Examples include: consumerreports.org and Angie’s List. With so much free content available on the internet, this model usually works only if the content is either premium (written by experts) or scarce.
  3. Affiliate marketing: Some  review websites get paid by reviewed business on a CPA (cost per action  basis). Examples of these include websites like nerdwallet and  creditkarma, which get paid by the credit card companies. Many  independent review bloggers also use this model.  There seems to be some  conflict of interest here, but most reputed websites manage to draw a  good line between the advertising side and review side of their  business.
  4. Licensing review data: User-reviews are very important criteria for consumers to make purchase decisions, and hence many businesses may be willing to pay for using review data from these platforms. Potential customers for this model include reviewed businesses (Example: Hospitals paying healthgrades.com to use ratings in their ads) and other advertising platforms (Example: Google licensing product rating data from TrustPilot, Bizrate and StellaService among others.)
  5. Selling premium account services to businesses: Another  possible source of monetization is selling premium account services to  businesses. The services may include enhanced listings, ability to  include curated content (instead of just user-generated content), and  opportunity to connect to reviewers among others. IMdB Pro and Yelp  Business account come to mind as some examples of these.

    (Last two are relatively less common monetization methods)

  6. Sale of review guides: With the decline of print media in general, this is not a very popular monetization method. Similar to (2), for this review model to succeed, the content needs to be premium. Zagat used to be a premium player in this field, but lately, they have gone primarily digital. Zomato in India also publishes print guides.
  7. Indirect monetization by keeping user on your properties: For businesses like Google+ and Facebook, the purpose of reviews is not really to monetize the reviews page directly. However, these review pages keep the users on their properties longer, and eventually, this may result in few additional ad-clicks.

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Answers by Amit Bhatnagar on Quora on May 14, 2015

Yelp is often categorized as just another website for restaurant reviews. Most of the existing answers reflect the same line of thought (To be fair,  the question was originally asked in 2012, and Yelp is definitely a bigger player in Local than what it was three years ago.) I see Yelp playing in at least the following categories, and in each category, it has different competitors:

  • Local Search engine: People do not think of Yelp as a search engine, but a good number of times they are using Yelp exactly for what they would have used a search engine a few years ago: “Indian restaurants in San Jose, CA”, “cheap hotels near me” etc. This is true for other “vertical search engines” like Amazon for retail.  Eric Schmidt recently identified Amazon as its biggest search competitor (See: Google’s Chairman Says Amazon — Not Bing — Is Its Biggest Search Competitor) Same logic applies to Yelp for local searches.
    Key competitors in this space: Mostly Google, and to a smaller extent, Bing and Yahoo.
  • Providing free digital presence to local businesses/ Local Advertising: Now these are two apparently different categories, but for online advertising players like Yelp, these are actually two steps in the same strategy: Make it easy for local businesses to own a basic presence on the Internet and then, provide enhanced presence through advertising.
    Yelp with its 2.2 MM claimed businesses is a sizable player here. However, Facebook with 30MM+ SMBs online (And this number is from June 2014) is a much larger player. In fact, majority of Facebook’s 2MM active advertisers are local/SMB advertisers. Finally, while Google does not disclose its SMB advertiser count and number of claimed Google+ pages, it is safe to assume that is is the largest player in this field.
  • Restaurant/hotel reviews: This is the obvious category that most people put Yelp into. Key competitors in this space: Zagat (Acquired by Google),  Google+, Urbanspoon (acquired by Zomato), TripAdvisor, etc. Out of these, Google+ is the most underrated player because of its perceived failure as a social network. However, with G+ reviews  integrated in Google search as well as Google maps, its content still gets a good number of eyeballs.
  • Other local reviews: While it’s true that restaurants account for the largest share of Yelp reviews, as high as 59% of reviews are from other verticals. In terms of share of reviewed businesses, non-restaurant businesses represent 79% of Yelp. (Source: Yelp’s last 10K filing : SEC Filings )

    Key competitors in non-restaurant reviews space: Google+ (again!), Angie’s list and HomeAdvisor (Home & Local services), healthgrades.com (Health), Groupon (Local Retail), Rent.com and apartmentrating.com (Apartments), etc.

  • “Closing the loop“: This refers to Yelp’s focus on being the transaction platform in addition to being the discovery platform for local businesses. Yelp identifies this as one of its three strategic priorities (other two being Mobile and International). With the launch of Yelp platform and acquisitions of SeatMe and eat24, Yelp now plays in field of online food delivery, table-reservation, booking appointments, etc.
    Key competitors in this space: OpenTable (acquired by Priceline), GrubHub, MyTime, etc. Not surprising, now Google is experimenting with this too. (News from last week: Whether you’re craving deep dish pizza or pad thai, starting today you can… ) Facebook is a relatively smaller player in this with its Partnership with OpenTable, but because of its penetration of the local market, it has the potential to go big in closing the loop.
  • Social: Yelp is not your traditional social network, but it does compete in the specific case of social check-ins. However, unlike other categories above, where Yelp is a leading or at least a significant player, in this category, it is at best a challenger. Foursquare is the original category defining leader for social check-ins, but I believe now Facebook is the more popular option especially with photo check-ins and group check-ins getting very popular.

Overall, considering its strong presence across almost all the categories noted above, Google is Yelp’s biggest competitor. Facebook with its significant penetration in local advertisers can be considered the second most significant competitor.

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Answers by Amit Bhatnagar on Quora on February 1, 2015

No. Facebook does not charge publishers for a share/post to Facebook button. Here is the official link: Share Button. On clicking on “Get code”, you will get a code snippet that you can include for free in your website. If a user decides to use a “Share/like” button, that is a win-win for both Facebook and the publisher, and it does not make any business sense for Facebook to charge for this feature. 
 
In fact, on Allrecipes, if you wait for the full page to load  (The page load time is definitely more than usual.) , you will see the FB icon appearing in the list of social plugins.

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I am a tech-geek, who would happily pay 99 cents (Sometimes even more) for an app that I like, or sometimes even to try a cool idea. But most of the times, even I think twice whether I really need an app if I have to pay for it. And i know many of my friends, who would not buy any app, unless they are totally convinced that they need it.

Here are some things that may be affecting consumers’ behavior:

  • Anchoring: People are used to have free apps, but not free desserts. An on-the-house dessert at a restaurant always feels like a generous offer. But keep this offer on for about 25 days, and on 26th day, you will hardly find any customers ordering desserts. You have anchored them into believing that desserts should be complimentary with the dinner.
    Similarly, a good number of apps are free, and this has anchored consumers to believe that apps should be free. I find it funny when I see adjectives like “greedy”, “not cool” and “unfair” being used in reviews and forum-discussions for app-makers, who try to monetize the efforts that they have put into their app. 🙂
  • Problem of plenty: Gone are the days of “There’s an app for that!”. Today, it is “There are (many) apps for that!” For free apps, most users won’t mind if they have multiple apps serving similar purposes on their smartphone (Example: I have both Shazam and SoundHound). But between multiple paid apps serving the same purpose, the users sometimes need to put some thought to decide which one would you buy. And a good number of times, the comparison never completes, and the purchase never happens!
  • Possibility of substitution:A dessert is a dessert, and perhaps can be substituted only by another dessert. Not so with apps. There are lots of substitution options available. Other apps on the same phone or sometimes their PC equivalents too! For example: Do I really need to pay $1.99 for “Craigslist mobile” for my iPhone when I know that I hunt for rental apartments only in the night, when I can search for it on my PC? And if it is really needed, I can simply go to my iPhone browser and search the listings.
  • Consumption pattern: If you pay $8 for a dessert, you consume it right then: all of it! Now, take out your iPhone and start going through the apps (Both free and paid) that you have used more than 5 times. I bet less than one-third of your apps would fall under this category. This guilt trap of having purchased some apps in past, but never using it, may deter users from spending another dollar for another app, which they know would perhaps never be used beyond the first 2-3 days.
  • Lack of knowledge about legal sharing: This will perhaps affect very few of the users, but the perceived value of an app may increase, and hence, the number of purchases may increase, if people are aware (And I know that many are not)that they can legally share the apps that they have purchased across different devices. Apple allows you to authorize up to five computers to share your iTunes purchases. I guess Android has similar conditions, as long as you are signing in with the same account.

Yes, many of the above would not look sensible (especially considering that we are talking about less than a dollar here) to a totally rational mind. But when it comes to consumers’ reaction to pricing, you will always find irrational behavior. (On a totally different note, see this: http://m.theatlantic.com/busines…)

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