A chiropractor is suing Yelp and a poster for disparaging comments.  You’d think that the First Amendment would provide cover for such free speech, right?  Well, it all depends where opinion ends and facts begin.  This is at the heart of a dispute affecting local review site Yelp.

2008 was not a kind year for social networking:

- Facebook reduced its revenue projections,
- eMarketer slashed its forecasts for the segment,
- even MySpace experienced a slowdown in the second half of the year,
- By year’s end, the economic meltdown affected advertising and all of a sudden, hopes for ad-supported business models evaporated.

Regardless of how this lawsuit fares, I think this is one of those “ah ha moment” for social media where any doubt fades away: social media won’t - and can’t - be ad-supported, period.

Sure, you would think that selling paid listings and generating e-commerce will be easier, but even then, when you consider the following:

“Biegel, who was a “sponsored” advertiser on Yelp and encouraged customers to write reviews on the site, received about as many referrals per month from Yelp while the review was up as before, but fewer after the lawsuit was filed, Blacksburg said, citing Yelp documents.”

You realize once again that while social media is powerful… so what?   Ultimately, you’d think that the chiropractor in question would want to advertise next to this user-generated content… but instead, all Yelp got was a lawyer’s letter.

This one will be interesting to watch.