On the occasion of its 10th anniversary, our friends at Eater have published a long history of how Yelp turned into the recommendation behemoth it is today. It's all worth a read, but the best part is the description from the I, Cringely blog of the way Yelp's first iteration helped you find the best places and services:
Here's how Yelp! works. Go to the web site (it's in this week's links, but I'll just bet you can guess the URL without even looking) and sign up for the service. Tell it what you are looking for (a plumber), put the need in some context (for my broken Jacuzzi bathtub) and give it a location (Charleston, SC). Then Yelp! expects you to tell it the e-mail addresses of a couple people whom you would contact with the question yourself if this service didn't exist. That's all. Then Yelp! sends e-mails to the folks you have listed along with any other people in its database who are in the same geographical area and/or have expressed opinions on similar queries. Part of what Yelp! does, too, is to ask these people if they can recommend yet another person who might better know the answer. Then Yelp! monitors and compiles the responses and makes some effort to get back to those who don't reply. Eventually, a list of resources is sent back to the original questioner along with information gleaned from other databases about how to reach these people and maybe even how to be a better-informed consumer.
Basically you email three friends who email three friends and Yelp also emails three friends and then nags everyone into responding. Yelp was a pyramid scheme of helpfulness. Luckily, a year after this post was written, it revamped and allowed people to share reviews on the site itself. That's the way Yelp works today, and it's... well it's a lot better.