Having a good online reputation is important for everyone, but keeping up appearances on rating sites is particularly crucial for businesses in the Internet age.

Yelp is arguably the most significant of these reader review sites, often the first stop for people looking for anything from lunch spot to a new doctor.

As The Washington Post reported last month, positive and negative reviews on Yelp can have a big impact, particularly on smaller businesses whose Yelp write-ups pop up first in search engines. Business owners have raised complaints about negative reviews, including one instance last year when a construction contractor sued a Virginia woman for leaving a bad review on the site.

Advertising’s effect on Yelp’s review pages is another topic of debate among the business community. Last week, the Web site MuckRock posted a Federal Trade Commission response to a freedom of information request that showed the agency has received 685 complaints about Yelp. The FTC said it has not yet reviewed those complaints. Many of them accuse Yelp or purposely suppressing good reviews or listing better reviews for those who advertise with Yelp.

Yelp has denied those kinds of claims, but the mechanics of its algorithm remain a mystery. In a working paper, “Fake it until they make it: Reputation dynamics and review ma­nipu­la­tion on Yelp.com,”Harvard Business School professor Michael Luca found a number of factors at play in Yelp’s reviews, including the reviewers’ experience levels and whether a review seemed fake, that could land them behind the filter.

My Washington Post colleague Brook Silva-Braga looked into reports that Yelp displays more positive or negative reviews based whether a business advertises with the company. Watch his investigation here:

Yelp has posted a response to the allegations and other criticisms on its Web site, saying, among other things, that claims that the company removes positive reviews from non-advertisers and that advertisers or Yelp salespeople can manipulate reviews are simply “myths.”

Related stories:

Amy’s Baking Co. meltdown begs the question: Is Yelp bad for small business?

With few other outlets, inmates review prisons on Yelp

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