Why Yahoo Is No Longer Good

In 1998, usability guru Jakob Nielsen wrote a refreshingly straightforward
column on " href="http://www.useit.com/alertbox/981101.html">Why Yahoo Is Good." His reasoning was that
Yahoo's original model - an easy-to-navigate directory of useful links - had maintained
its integrity even as Yahoo grew beyond its humble origins. Other web sites, and
particularly some portals, such as Excite, moved away from this simplicity, and
got mired in cluttered designs and a delusionally premature embrace of bandwidth-sucking
animation, even broadcast.

Yahoo was good in 1998. But for several reasons, it no longer is. Nielsen's column
title actually ended in "(But May Get Worse)." Some of his most important predictions
have come to pass, including growing clutter, low-clickthrough rates, and
an unsustainable business model. The latter two, sadly, have always been very
predictable outcomes of the clutter problem. Yahoo has added clutter bit by bit,
adding services and links to every page. But worse, it has assaulted users with
ever-more-annoying, ever-larger blinking ads that make it impossible to concentrate.

Lower clickthrough rates, some insiders might complain, are the reason that Yahoo
must resort to increasingly invasive and bold advertising. But it makes more sense
to see the pattern of causation as being the other way around. High CTR's do exist
out there in cyberspace. The decline in CTR's is not an inexorable law. On
clean, functional, non-banana-hiding pages, especially those associated with
search engines like Google, 0.5% CTR's are common, and 2% clickthru rates are
not uncommon. Google is currently testing the limits of the trade-off it has made
with its users (limited advertising content in exchange for continued goodwill
and user satisfaction). Yahoo blew through those limits long ago, and continues
to renege on its side of the "deal." Self-respecting users won't soon forget this.

But what about the debate over design simplicity? Surely it becomes more of a
challenge as you get more content, and surely it's boring to just stick with the
old drab Yahoo HTML links approach? Some of my colleagues have opined over the
years that Yahoo has fallen behind rivals from a design standpoint precisely
because its own inertia has held it back from sprucing up Yahoo's look. I
don't agree. Flashier, or even prettier, design won't help any portal win consumers'
allegiance for any length of time. Heinz Ketchup is better (for me) when it comes
out of a Heinz Ketchup bottle, with the same old label. It's fine if Heinz wants
to come out with purple and green ketchups for the kids, just as long as they
don't alienate all of us regular Heinz-loving consumers. Just make sure I can
find a regular Heinz ketchup bottle on the shelf.

When I use Yahoo these days, by the end of my session it's as if I'm walking
away spattered from head to toe in purple and green ketchup. (Yet, if I want to
customize my start page, they never seem to have the shade of taupe ketchup
I'm looking for.) As I scroll through Yahoo message board posts, I must
wait as enormous ads are served on every page. When I try to use my mailbox, I'm
hammered again with huge rectangles of low-CPM disrespect. Some days it seems
as if parts of Yahoo are entirely taken over by creepy ads for hidden cameras.
This hardly reflects well on Yahoo's relationships with advertisers if that's
the best they can do. Surely, if profit is the question, the more direct money
path is to get a willing customer (like me) in the mood to pay good money to shut
off all the ads on the message boards, to pay good money to get an ad-free
version of what is still my favorite web-based email service. I'll get in
that mood a lot faster if Yahoo simply stops serving the hidden camera ads. Just
stop it!

Yahoo is now, of course, taking Wall Street's advice to move from an ad-centric
business model to a fee-centric one. But Wall Street's priorities are what got
us into this mess in the first place. The ad-centric model was a stock market
creation. So it's not a huge surprise that Yahoo is bungling the transition
to a fee-based model. In a hurry to salvage "sensible business practices," it's
forgotten the most important business practice: don't irreparably damage your
relationships with loyal users.

Don't get me wrong: there is probably good reason for Yahoo to fire "freeloading"
clients in some of their verticals, like auctions. If it's just business,
you can and should fire 90% of your customers if that will be better for business.

But where does Yahoo get the idea that e-mail is "just business"? People
live and die by their e-mail. They were slowly lulled into relying on Yahoo e-mail,
and kept coming back because it is arguably the best web-based email service
around. But in keeping with their sudden need to fire cheapskates and
ingrates like us, they've torn up the social contract. (It was already
eroding, to be sure, due to the large, intrusive ads that mail users
were forced to look at.) First, they abruptly informed users
that the email forwarding feature would be terminated in short
order unless people paid a $19.95 per year subscription fee. Not only will that
be inconvenient for many users. It is going to harm legit independent email
newsletter publishers who will suddenly see an increase in bounces (or at least,
unopened messages) because their subscribers' Yahoo email doesn't forward
anymore. (Thanks Yahoo, we only spent the last four years and countless dollars building
up our subscriber lists.)

But then they really went overboard. They decided to target=_blank href="http://www.wired.com/news/privacy/0,1848,51461,00.html">make up their own
definition of "permission" in order to begin serving up targeted "offer" emails
from Yahoo's advertisers. If I'm a big advertiser, I suppose I'm pretty happy with
this new access. Big corporations get a chance to spam people while letting Yahoo
take the blame for it. Brilliant. Entire conferences are being organized around
the "email marketing challenge" facing big companies. Essentially, they are
desperate to satisfy the urge to spam and get away with it. They really don't
get it. They don't want to get it.

I know some will see this as a minor change. I happen to have found the
first couple of "Yahoo Delivers" ads sent to my inbox as relatively relevant to
my interests. But that's not the point.

The salient fact here is that many of Yahoo's loyal long-time supporters have
concluded that Yahoo is a spammer. Therefore, Yahoo is evil.

Evil?

Well, what kind of optics did Yahoo think it would create
by letting it be known that it's "loosening up" its definition of spam? Spam,
as Seth Godin writes in The Big
Red Fez: How to Make Any Website Better , is not "like
the plague, it is the plague." End of story.

Speaking of Godin, isn't this the company that once employed the
Yoyodyne founder as their VP of Permission Marketing? Did any of his tips on gaining
users' permission rub off on him? Or did he call them up last month and tell them
it was OK to skip a step?

No, it's evident that Yahoo has done this without Godin's blessing, so we can't
lay the blame even indirectly at his feet. Here's the word from
href="http://www.sethgodin.com/sg/blog/sethgodin.html">Seth's blog:

"Opt out = spam. Opt out takes advantage of laziness, inertia and infoglut
to inundate people with stuff they don't want. Opt out is no way to build a
great company. If you advertise, you should never buy opt out ads. They don't
work so well... and more important, you're going to annoy people.

"I'm ashamed of this. Most online businesses have news and offers that people
will willingly read. That's the path to go down. That's the way to build sustainable,
profitable businesses. This is a mistake. It's too bad, really."

Yahoo's increasing shortage of goodness now takes on a bigger meaning
to its diehard fans. It's gotten beyond narrow issues of usability and into
the realm of good and evil. Oops.

You know what it all means, of course. Yahoo's going to have to find itself
a crop of users who are accustomed to this kind of treatment. Like other big,
broadcast-model portal companies (AOL Time Warner, Microsoft), Yahoo is playing
a big media game that only monopolists can win. The problem is, they're
not quite big enough to pull it off. Neither was AOL, in its day. Financially,
in spite of its growth, AOL was in real trouble until it merged with Time Warner.
So you can see where I'm headed with this. Yahoo is being groomed for acquisition,
nothing more. Let's hope it doesn't die trying.

Andrew Goodman is Editor-in-Chief of Traffick.com and principal of Page Zero Media, a Toronto-based consulting firm which focuses on search engine optimization and related marketing services. To stay in touch with search engine and portal trends, be sure to sign up for Andrew's Traffick Monthly email newsletter.