Yahoo's Online Services Continue to Deteriorate

Apr.27.08 | About: Yahoo! Inc. (YHOO)

By Kris Tuttle

It’s a small point but it’s one in a large pattern for Yahoo (NASDAQ:YHOO).

We still used them for domain registration which is a fairly innocuous administrative function. We knew we were overpaying a little at $9.95/year per domain but even with 100 domains it’s small change. But when they increased the renewal price 30% to $12.95/year we decided to take a look around. It turns out that there are services that are much more robust than Yahoo and the best news is that they charge less than half the new Yahoo price.

So we get vastly improved administration and control at half the cost of Yahoo (again). Now it’s true we will be paying some students to move everything over but it’s a wash the first year and we save money after that. More importantly, the functionality is improved and every new domain we register is only a third of the Yahoo price.

We know Yahoo can turn their existing traffic into more money using Google (NASDAQ:GOOG), which is perhaps the best indicator of their failure. They are lucky to be getting what they are being offered for their deteriorating online assets.

Basically their investment and innovation in building their online services has been far below the market. So their offerings have deteriorated relative to other firms.