Epinions, The Path-Breaking Website, Is Dead. Some Lessons It Taught Us (Forbes Cross-Post)

Before Yelp and TripAdvisor, before blogs or social media, there was Epinions.com. Founded in 1999, Epinions was a consumer review website before we fully appreciated how much we needed consumer reviews. It made several advances over other websites of its era: (1) it had a massive catalog of goods/services that consumers could review, (2) it paid consumers cold, hard cash for their reviews, and (3) all submitted reviews were published, but other users voted to determine how visible each review would be. Epinions was at the leading edge of the “Web 2.0” phenomenon, which heralded the transition from online publishers following traditional publication processes to websites principally powered by user-generated content (UGC). Epinions also had the distinction of being one of the most heavily hyped start-up companies of its generation. Its launch was heralded by a New York Times Magazine article, “Instant Company,” that breathlessly touted the company’s speed and pedigree.

Epinions’ hype was never fully realized. Recently, Epinions’ owner, eBay, pulled the plug on it after many years of decline. Users’ reviews still will be published, but Epinions won’t accept new reviews or permit authors to modify or delete their reviews (and, naturally, eBay won’t pay authors any more). As we lament Epinions’ ascension to dot com heaven, it’s worth considering some of the lessons Epinions helped teach us over the past 15 years.

[Disclosure notes: I was Epinions’ general counsel from 2000-02. I own stock in eBay and TripAdvisor.]

Web 2.0 and the Rise of UGC. Throughout the 1990s, there was a vigorous debate over who would dominate the emerging electronic network. Was it going to be the old-line traditional publishers like newspapers or broadcasters, or was it going to be new online-only intermediaries like AOL or Yahoo that would replicate the traditional publication model of aggregating and distributing professionally-created content?

We know now the answer: none of the above. Instead, start-ups like Epinions showed us that the most successful Internet players would build their businesses on user-generated content. Take a look at Alexa’s top US websites by traffic. All of them depend substantially or exclusively on third-party or user-generated content.

Professional v. Amateur Reviews. In the 1990s, there was also a vigorous debate over whether consumer-authored reviews were trustworthy. After all, the entire phenomenon of consumer reviews was entirely new. Prior to Epinions and the other groundbreaking consumer review services, product reviews had been almost exclusively written by professionals. With no experience with consumer reviews, many folks were skeptical that they would be useful and credible.

We know now that consumer reviews are a vital part of the information ecosystem. When built properly, consumer review websites benefit from the “wisdom of the crowds”–i.e., even if any single review (professional or amateur) isn’t accurate, a large enough collection of reviews can be highly reliable. Epinions contributed to showing that the crowds were wise, years before James Surowiecki’s book popularized the concept.

Consumer Review Authors Don’t Need to Be Paid. In the 1990s, many skeptics believed that no one would contribute useful product reviews to a website unless they were paid for it. Indeed, by paying variable amounts for reviews, Epinions implemented the philosophy that the best/most valuable content should be rewarded with the most money.

We now know that cash compensation isn’t required to build massive databases of online consumer reviews, as demonstrated by the hundreds of millions of user contributions to Yelp, TripAdvisor and many other consumer review websites. Users will make those contributions for a variety of non-cash reasons: the social recognition the site can provide (what Wired once called “egoboo”), to develop a personal reputation, to give back to the community, or for the sheer joy of writing. Even though Epinions would have paid them for their reviews, users freely provided millions of reviews to other review websites–providing convincing evidence that users don’t simply flock to the site that pays them the most cash. UGC websites can’t just “build it and they will come,” but we can say confidently that cash compensation isn’t mandatory to obtain high-value content from users.

Review Websites Flourish With Limited Legal Liability. In 1996, Congress enacted a law (47 USC 230, or Section 230) that eliminated review websites’ liability for most users’ reviews. This law has provided a crucial foundation for the entire review website industry. Section 230 ensures that review websites won’t simply remove negative consumer reviews when challenged, nor will the review websites be sued out of existence for rejecting these complaints. (As far as I know, Epinions was never sued over a consumer review. Yelp and TripAdvisor are sued occasionally but, as far as I know, have never lost a case over liability for consumer reviews).

Furthermore, Section 230 has allowed review websites to experiment with different ways of gathering, sorting and presenting consumer reviews. Epinions’ web of trust, which sorted reviews based on how other users graded them, was an innovative solution; while TripAdvisor sorts based on submission date and Yelp uses a proprietary sorting algorithm. Without Section 230, review websites probably would all follow the same protocol for organizing consumer reviews, i.e., the approach that minimized their legal risk. Instead, Section 230 facilitates the kind of innovation that will, over time, lead to even better consumer review databases; and it helps leave open the door for innovative new marketplace entrants.