In the technology part of my life, I own and edit several technology sites including a large Microsoft oriented blog called EyeOnWindows.com.
I usually write about Microsoft (NASDAQ:MSFT), Windows and other technology topics here but today, I am drawing from the non high-tech part of my life where I run an online marketing startup called LearnAboutTheWeb.com.
I was talking to some LearnAboutTheWeb students the other day about Yahoo (NASDAQ:YHOO) and its new branding and a lot of really interesting things came up.
We talked about the branding, the company's web strategy and its new logo and while those topics were interesting, there are two major points that investors might be interested in.
Yahoo's Link colors are awful
The Yahoo portal uses a really awful shade of purple (#324fe1) for its link colors. Here's a sample image from the site.
From a web design perspective, there's a reason why you don't see a lot of web pages using those colors - they're unattractive.
Contrast that with the following tweaks I made to the same page.
With a couple of simple changes to a more usual and attractive color (#336699), the page looks more attractive and calmer.
What does this have to do with Yahoo's business?
Well, even though the company is making huge inroads in the web traffic department, I think that it could do a lot better if its search portal was a little more attractive.
Contrast their portals colors with Google's (NASDAQ:GOOG) search results (link font color#12c)
Better fonts = a longer and more fruitful user experience = higher rates of user conversions = more advertising revenue for Yahoo. These things matter.
But here was the really interesting idea.
It suddenly struck me one day - why doesn't Yahoo simply pay people to use their search engine?
OK, before you call me crazy - listen to how this would work.
Yahoo would simply say, every day, its algorithm will randomly and dynamically select users performing a search on Yahoo and offer them 50 US dollars. If the user accepted the offer, they would simply input their PayPal email address and Yahoo would send the money to that account.
If the user didn't have a PayPal account yet, an email would be sent to their email address walking them through the process of opening one.
Every day, 1000 people around the world would make 50 dollars simply just for using Yahoo for web search.
Here's my guess - this would change behavior. I would use Yahoo every day if there was a chance that I could make money every day just for doing a web search.
I love Google but.... last I checked, they don't pay me for searching. In the developing world, why would an African EVER use Google if they could search AND potentially make money EVERY day?
Now the annual cost of this promotion would be 50,000 x 365 = $18,250,000 dollars but that would probably pay for itself in less than the first week. The buzz from the promotion and the new traffic would be a huge boon for the search company and maybe it would force Google to respond.
Anyway, the main point of these two observations for investors is, Yahoo has a lot of potential to come back and seriously compete with Google in search. A slight tweak here and there sometimes can make a significant difference in revenue for internet-based businesses.
The company has significant assets and a viable search engine. I would advise investors to buy and hold this stock. Good things may yet happen.
I'd love to hear back from you all about the viability of these ideas.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: I am the CEO of Learn About The Web Inc. - learnabouttheweb.com. While I have no business relationship with Yahoo of any sort, I am the owner and editor of several technology sites that may mention Yahoo and Google from time to time including EyeOnWindows - eyeonwindows.com.