Forum Moderators: open
Try a 70% discount for all the agony you've caused me and bring the directory back the way it was. Something is definately brewing behind closed doors for them to care enough to create a survey regarding the matter of submissions and the likelyhood of renewal rates. Wonder what it could be. Duhh.
Their searches were pathetic, now they are very good. Great move. And I've got almost the exact same directory rank as I do in Google, and I am getting a lot more Yahoo referals, which makes me think the public likes the change a lot.
But if yahoo were to change it's directory back tomorrow - your free yahoo traffic would cease.
I'd be curious to know if anyone else went from an old #7 result to a new #7 result (or whatever) and are seeing a similarly large increase in visits.
That's totally subjective.
In truth, the previous results were simply different. Their quality was actually perfectly OK, although limited on some niche searches. This latter factor could easily be addressed by auto-appending the Google results on the end, which would have kept everyone happy.
At this point in time the change looks to be a very bad decision in business terms... although of course we are not privy to whether there is something else around the corner that actually drove the change.
And if you think this is a bad busines decision you obviously haven't been reading the various news stories, particularly the role Overture plays in Yahoo's profit scheme. Great business move by Yahoo, and one they can proudly tout to their customers too. People who happened to lose the random top rankings they got in the directory need to look at the bigger picture.
"you obviously haven't been reading"... "need to look at the bigger picture"... etc.
I obviously don't have a clue what I am talking about then.
I'd do a little more reading if I were you.
I think that's what it is.
Google results do nothing for Yahoo's bottom line, Inktomi, FAST, Directory and maybe others will.
They COULD have combined the two sources and aligned them in a number of ways, many of which would have retained the level of interest in the directory. They chose not to... and the question this raised from the day one of the new SERPS was WHY?
It seems very likely that we will learn the answer in the short term.
I absolutely agree, even though it was a devastating change for me!
Positioning used to be very easy to manipulate for anyone with more than one brain cell.
The only downside is total reliance on google, but at the end of the day, Yahoo WAS rubbish and google is the best SE which is why so many users are choosing to use it over the competition. Not an opinion, a matter of fact. If google ever turns to "mush", it will disappear!
their income from the current situation MUST be lower than it was previously by virtue of lower directory payments.
If you track their new additions you may be surprised to find that there has not been nearly as dramatic a decline in Business Express submissions as many predicted. BizEx submission revenue is still incredibly strong.
They have not overtly added a new income stream by ditching the directory and replacing it with Google
What they've done is further anchor the importance of their single largest revenue stream... paid search listings.
Even if they did lose all of their BizEx income (which they haven't) their sponsored listings generate far more revenue with far less manpower than their directory business ever could.
Enhanching this revenue stream even further means doing two things...
1) Adding more sponsored listings, which they've done, moving from three to four overture links at the top of each page.
2) Insuring that their users are happy with their search results, which they've done. Yahoo tested this new SERP display for months before rolling it out across their whole site. You can be sure that this change was more than just a blind stab in the dark... it was planned, tested, calculated, and implemented with great precision.
the question this raised from the day one of the new SERPS was WHY?
Hmmmm... let's see. Revenues are up, stock's up, Overture revenue is up, they've moved their emphasis from an incredibly high touch customer service nightmare (directory submissions) to an incredibly automated revenue stream (Overture).
Their stock holders are happy, Their accountant is happy, Their most important business partner is happy, and the end users that depend on Yahoo search are happy.
The only moaning I've heard has been from a small section of the SEO community that was dependent upon easily ranking keyword laden domain names in their former SERP displays.
And there, for every webmaster that is unhappy about the change, there is another that has increased their traffic by sitting pretty in the Google fed results.
It seems very likely that we will learn the answer in the short term.
Certainly there are many more changes to come... but if they didn't change a single thing in the next 12 months, from where I sit, (and their shareholders) they appear to have made some very sound business decisions.
Sure, if I had my way... things might have been done a little differently, but for all those out there scratching your heads and wondering why... dig a bit deeper, read the financial news, and the interviews with Yahoo itself, and their reasoning will not remain a mystery any longer.
It's a win-win-win for Yahoo. Very seldom do you run across something so clearly right for a business to do.
The prior ranking system invited such an easy opportunity for manipulation that abuse was inevitable.
The only thing I can see that could have achieved all of the above benefits, while still encouraging more directory submissions, would be to give some additional boost beyond the red arrow to the sites included in the directory.
From what I can see, this is already happening in the adult sector so we may yet see this approach propagate to the rest of their search results.
Yes, I was just speaking from Yahoo's perspective. Clearly many people who depended on a good directory ranking lost. Still, many people who got nearly zip in competitive categories (pay $300, get a search rank of #60 behind others who paid the same) relatively benefit in that the directory listings are more of a level playing field now.
If you track their new additions you may be surprised to find that there has not been nearly as dramatic a decline in Business Express submissions as many predicted. BizEx submission revenue is still incredibly strong.
True, but that's because people submitting new sites to Yahoo may not be aware that the search function is powered by Google and not Yahoo. If Yahoo made it clear that your site would be listed on Yahoo at the next Google update for free, Business Express submissions would fall dramatically.
for every webmaster that is unhappy about the change, there is another that has increased their traffic by sitting pretty in the Google fed results.
You're missing the point. If you submitted your site to Yahoo for $299 and you now find that 90% of your traffic that comes from Yahoo is from Google search results and only 10% is from your paid listing in the directory, you wouldn't be happy either.
Almost all sites listed in Yahoo directory will be in this position and many webmasters won't bother renewing their Business Express accounts after a year. This is where Yahoo will loose out.
Overture listings may increase Yahoos revenue short term, but in the long term Overture revenue will cancel out lost Business Express renewals.
steveb: Google has google, Yahoo has Google plus more. How can that possibly be bad?
It's bad because the two sites are almost identical when you're searching for something. This means less choice for users:
Google = Google Search Results + DMOZ + Adwords Select
Yahoo! = Google Search Results + Y! Dir + Overture
You're missing the point.
My apologies Kerrin, but there's a difference between "missing a point" and disagreeing on it.
We'll just need to agree to disagree, and let's do our best to do so amicably. :)
These points have been covered in many other threads, so rather than revisit them here, a quick search through the Yahoo Forum's archives of the last 12 weeks will yield the full spectrum of perspectives. (and you'll find ample support for your views there)
Overture listings may increase Yahoos revenue short term, but in the long term Overture revenue will cancel out lost Business Express renewals.
I believe you may have a vast misunderstanding about the economies of scale here. Yahoo's directory submissions are a pittance when weighed against their paid listing revenues.
Of course no one but Yahoo is privvy to the exact figures, but you do the math...
A few figures you'll want to research before making such financial assessments:
Number of searches conducted daily at Yahoo
Average top four bids at Overture
Number of BizEx listings added daily
With these base figures to work with, factoring in even the most conservative guesses on the variables at play, you might begin to understand why their paid submissions are anything but their #1 priority in the big picture.
If you take a look here [searchenginewatch.com] and here [searchenginewatch.com] you can work out based on "Total Search Hours" that Yahoo gets about 50 Million searches a day (about 1/3 the number of searches Google gets).
If you assume that about 1/3 of these searches produce actual PPC results (16.67 Million) and that 20% of users click on a PPC search result, Yahoo will send about 3.33 million clicks a day to Overture.
Average bids for Yahoo search results based on Yahoo Buzz [buzz.yahoo.com] and Overture Bid Tool [uv.bidtool.overture.com] is $0.183. If you bump that figure up to $0.30 and give Yahoo 50% rev share that's an average of $0.15 per click or $499,950 in revenue a day.
If you take into account Business Express renewals from last year, new Business Express accounts set up this year and Yahoo directory sponsor [ecom.yahoo.com] listings ($50-$300 per month), they should easily be earning more than $499,950 a day in revenue from the directory. This revenue should increase every year if new sites continue to sign up and existing customers are kept happy so they renew their accounts. I don't think that will happen now though.
I'm not trying to say that the above calculations will be brilliantly accurate (I know they won't be), I just think it's a mistake for Yahoo to wreck a stable growth revenue stream in favour of a short term cash boost to keep shareholders happy :o
All of the following is complete conjecture of course, though I'd like to think of it as "somewhat sound" conjecture. ;)
If you assume that about 1/3 of these searches produce actual PPC results...
If you look at the top 1000 most frequently searched terms you'll find that about 90% produce PPC results. Even by conservative calculations it's likely that as many as 3/4 of the total searches done will produce a PPC listing, especially with the newly updated Match Driver system which was designed to drive up bid prices and capture more obscure keyphrase combinations.
If this estimation is even close, you can double your estimation of daily paid searches and the relative revenue associated with it.
If you take into account Business Express renewals from last year, new Business Express accounts set up this year and Yahoo directory sponsor listings ($50-$300 per month), they should easily be earning more than $499,950 a day in revenue from the directory.
First, I don't believe that Sponsored Listings should be factored into the equation. Being an ongoing monthly advertising expenditure, I would say it's not unfair to assume that anyone with the budget and desire to have their site come up first in the listings is more than likely still spending that money to achieve the same thing with Overture, and most are probably getting a better ROI to boot. (Based on every test that I've done and studied on the Cost vs. CTR of their Sponsored Listings program)
So, that leaves us with the actual directory listing fees.
Back in the "Golden Days" of instant high ranked directory listings with www.keyword-optimized-domains.com, I observed an average of about 125-150 new BizEx listings per day.
Even if we bump that up to 200 per day to account for sites that were declined, and multiply that by the double fee for Adult listings, and double it again to factor in renewals (which wouldn't be nearly 100% even if they hadn't changed the SERPS)... with all of these extremely generous over-compensations you're still not up to even half of your original estimation of daily PPC revenue.
Now factor in the following...
Additional expenditure for directory management:
-Annual Salary for over 150 editors
-Customer Service and Support
-Merchant Fees for processing the payment of each listing
PPC? None of the above.
I just think it's a mistake for Yahoo to wreck a stable growth revenue stream in favour of a short term cash boost to keep shareholders happy
Personally, I don't see where their very efficient and economical decision to focus on their single largest revenue stream is a "short term cash boost" at the expense of long term profits.
The end-user is happier, and the shift in emphasis is far more scalable for long term growth. The PPC revenue model scales almost effortlessly with exponential growth while a human edited directory becomes increasingly harder to manage and more costly.
While I can appreciate the points you're making, I'm no more convinced that what Yahoo's done is anything less than a sound and very profitable long term business move.
Kerrin, regardless of how close or far off the mark our estimations have been, I've certainly enjoyed the exercise. Thanks for playing. :)
[edited by: Dante_Maure at 4:01 pm (utc) on Nov. 18, 2002]
Let's way over estimate 200 paid submissions per day. (not including Sundays when they add almost no sites) On average 10% or less are Adult. (check the new sites pages to confirm)
This yields roughly 20 Million per year in new submissions. (make it 30 if you feel that %50 would have been likely to renew)
This with an enormous overhead expenditure.
Now compare that with roughly 93 Million in Overture revenue and virtually no overhead.
Pretty clear where the chips lay in this regard.
as YAHOO stock is now selling for $15 and change, i really doubt that any share holder who bought YAHOO in 2000 at $250 a share is very happy.
Please.
You're using the pre-bust stock prices as a point of reference for this discussion?
We're discussing the impact of the recent site updates.
As of 7 weeks ago before the changes, YHOO was trading at $9 a share.
Today it's up to $17.45
Are the share holders pleased?
You betcha.
I think Yahoo will opt to have its cake and eat it, too. I.e., they are going to find a way to make the directory relevant again - mix directory results into the SERPs, somehow combine the Google and directory search, or display a separate box of directory results. $30 million a year isn't peanuts, and if they came up with a way to encourage or force renewals on grandfathered sites (e.g., preferred display for "subscribers"), it could break $100 million.
fees & listings is a cash cow for YAHOO
Indeed, and directory submissions is an undisclosed fraction of the revenue generated under their fees and listings header.
and they are not likely to toss it out.
I haven't seen anyone suggest that they will, quite the contrary in fact.
This entire debate has been about whether their de-emphasizing the directory listings was a bad fiscal business move... and based on much of what we have covered it seems clear that, if anything, Yahoo's financial outlook is stonger than it has been in quite some time.
