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Jan 31, 2002: Yahoo! Joins the Ranks of the Living Dead

WARNING: narcissism ahead

In SFGate, Hal Plotkin writes:

In a regrettable move, Internet pioneer Yahoo! recently joined competitors such as MSN.com, LookSmart and AltaVista in seeking payments from Web sites that want to be included in their online directories.

Regrettable because, as Plotkin points out, there remains only one major search or directory service (Google) that hasn't yet succumbed to payola. All the others, including Yahoo!, now seamlessly mix editorial content with paid advertising. Very sad that it's come to this.

Why did I prefix this posting with a hot dog icon, my warning to readers of impending narcissism? So I could point you to an article I wrote in the summer of 1995 called The Untimely Death of Yahoo. I predicted that Yahoo! would succumb to scaling problems that would eventually render its searching and browsing capabilities pretty near useless. In fact, I'd argue that if those are a measure of Yahoo!'s mortality, then the service actually died a few years ago. But by then Yahoo! had already redefined its business model, parlaying the investments it received for being a directory into all sorts of new services, ranging from free email to Yahoo! Life magazine, that had nothing to do with its original foundation.

Now times are tougher, and Yahoo!'s other revenue streams can no longer sustain this venerable old money pit. Dollars and cents, not searching and browsing, are the final nails in the coffin. So sadly we must bid adieu to Yet Another Hierarchical Officious Oracle. Like the exclamation mark at the end of Yahoo!, the directory's death in a way punctuates the end of the dot com era.

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Comment: Michael Angeles (Jan 31, 2002)

Google doesn't require payment for placement, but the do feature paid for placement advertising. See, for example, this search on books. Apparently they get enough revenue with this model. Or perhaps, as they said in this article in another context, "... while yes, they have to make money, they're not going to turn into a complete money-grubbing, grow-revenue-at-all-costs company."

Comment: Peter (Jan 31, 2002)


1. Yahoo charges businesses $299 per year to be considered for placement. They won't put you in if your site is useless brochureware, even after you have paid the fee.

2. Yahoo is still free for non-profit sites as long as you don't submit them to the Business to Business or Shopping & Services sections of Yahoo!.

Yahoo's usefulness doesn't lie in its search engine or directory, it's in the grouping of additional services: yahoo groups, my yahoo, email, ...

Comment: Lou (Jan 31, 2002)

My point exactly; the directory's value has been long surpassed by the other services.

How many people regularly use Yahoo!'s directory anymore?

Comment: Eric Scheid (Jan 31, 2002)

Quite a few, going by my various site referrer logs, although that data is tainted since Yahoo's search engine which sits on top of the Yahoo directory does a meta-search via Google.

I do have a couple of mainstream consumer ecomm sites which have luckily been indexed in the Yahoo Directory, and for them the listing is a gold mine of regular visitors.

Comment: darrel (Jan 31, 2002)

Let's not forget DMOZ.org as a still-free directory.

A great idea that always seems to be forgotten in conversation.

Comment: Lou (Jan 31, 2002)

Honestly, I think DMOZ is a disaster. Noble in intent, but predictably inconsistent, out of date, and incomplete. Exactly what you'd expect from an indexing effort performed by hundreds of non-professionals with varying levels of interest and commitment. That's not to say that it can't ever be useful. But to use this old approach for a comprehensive Web directory doesn't make sense and never has.

I apologize to everyone in advance who might be offended by my disregard for DMOZ, but I just don't think it's all that useful.

Comment: Eric Scheid (Feb 1, 2002)

another DMOZ complaint: I probably should investigate deeper before saying this, but nonetheless ... I can't help but sense some ego-tripping territoriality going on, with some categories being administered by only one volunteer that dissuades others from messing with "their" territory.

I live in hope that I'm wrong on this.

Comment: Peter Van Dijck (Feb 1, 2002)

So would we recommend Yahoo to take the focus of their homepage away from the directory/search and towards the services? That's scary, I would really need lots more data for a conclusion like that...

Mmmm... I'm thinking what kind of data would convince me to recommend that (in the hypothetical situation that I'd be working for them). It would have to be pretty solid. Usability testing? Naa. IA reasons? Naa. Business/market data (as in: the market is going this way, the competition is like this)? Maybe.

Maybe I'd end up recommending they keep it, purely for branding reasons. But if that's not their core usefulness, what am I saying then?

But I guess this whole original post wasn't about the homepage... Darn. I'll shut up now.

Comment: Andrew (Feb 4, 2002)

Yahoo's only good for free stuff like web-based email and Groups anyway. When they start charging for those (soon probably), that will be the real death knell for them.

eGreetings and Hallmark now charge for e-cards (or whatever they call them), a service that is worth maybe 5-cents for me to use per card. I think Yahoo still has these for free?

Comment: Scott Brylow (Feb 4, 2002)

Hey Lou!

Yes, I am somewhat saddened by Yahoo's current state,
but then again, I doubt that the world really does need more than one google - and google is performing admirably.

I am curious what you think of goto.com - I actually think it's a quite cool approach to the problem - people do, indeed, buy position in the listing, but it's so explicit and transparent, I acutally think it may be useful.

Having said that, I never use it for search, but it is popular, with users from the traffic info I've heard, and with investors.



Comment: Dan Kapusta (Feb 5, 2002)

I never really used Yahoo, and still don't. AltaVista was my search engine of choice back in the 90's and Google is the obvious favorite now. Yahoo's 'Groups' is an utter pain in the butt to use (imho of course) and I don't need any more email accounts.

Yahoo is DOA imho :)

As for paid ads in search results, I like the way google does it with the ad space on the right, where it tells me that these results are from paid advertisers. In fact, I like knowing who's paying and who's not. It lets me know who has money and who doesn't, which speaks volumes in today's New Economy.

To recap, Yahoo was never good and paid ads (when labeled as such) implicitly carry more info than just a tag line and URL.

Comment: Lou (Feb 7, 2002)

Dan, I think you're being just a little harsh. The Yahoo! directory was great back in the good old days, when it was able to keep up with the scale of the Internet's growth. In other words, for a couple months back in 1994. ;-) Seriously, I'm sure the directory still has good value today. I'm just hard-pressed to see it personally.

Scott, I assume you mean overture.com, not go2.com? (There has been a name change recently.) I took a look at overture.com, and I don't know... I just don't see how valuable this is. I guess using fees paid as a ranking scheme is not entirely unreasonable *if* your result set isn't that large--the user can scan through the results quickly. But if the overture.com directory grows much larger, I doubt this would work. It would become a victim of its own success.

Comment: mick (Feb 7, 2002)

The google ads, knowing that a company paid for that specific keyword and was cool enough to give google money (so I don't have to) is enough reason for me to always turn my head to the right to read them.

Comment: Dan Kapusta (Feb 7, 2002)

Lou, I'll admit I might be taking a harsh tone, but like you said... "the directory was great when it was able to keep up with the scale of the Internet's growth. In other words, for a couple months back in 1994".

I think the Google effect is real, and has been for a while. Also, I'm getting a majority of my trafic from Google now, so I have to like them, and bash everyone else, right? j/k

Comment: Maribeth Sullivan (Feb 11, 2002)

I think Yahoo!ís directory still has tremendous appeal for the masses. Keep in mind that most people using the Internet are not very sophisticated searchers. They donít know how to evaluate information or where else to go. And Yahoo has tremendous brand recognition. WE may think itís dreck, but I donít see users giving up on it anytime soon.

As for Yahoo! the business, I donít think they even pretend that they are a directory anymore. Yahoo! is a money making machine revolving around their huge database of demographic information and very sophisticated tracking technology.

The more portal features they add, the more information they collect about people (people volunteer this information!). People return because so many features are available (free) all from one page with one password and the same basic interface - convenience personified. And every time they use any of these features, from email to stock quotes to personal photo albums, they are bombarded with targeted ads.

Yahoo! even has a full sub-directory called Yahoo! Shopping which operates independently from the main directory. Itís sole purpose is to provide people with as many ďpurchasedĒ results and ads as possible. And it works. Shoppers are intrigued by all this and click like crazy.

Not only that, but businesses can set up ecommerce sites right on Yahoo!ís servers, taking advantage of Yahoo!ís site-wide shopping cart services and some pretty impressive back-end reporting for a relatively low price (plus a cut of the action for Yahoo!).

So donít get too tweaked about Yahoo!ís directory. It doesnít pretend to be an impartial Ferrari (or even an impartial Chevy). Itís a bus with huge advertising panels on its sides and a sandwich board on its roof. And its conductor keeps track of everyone who gets on and gets off and where. And believe it or not, many people are OK with that.

As for paid listings, see Danny Sullivanís collection of articles at. http://www.searchenginewatch.com/resources/paid-listings.html.
Also please note the prominent notice on the homepage of Search Engine Watch: ďSponsored by Overture.Ē

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