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Charging Does Help Yahoo Make A Profit

Meshach writes "The globe and mail has an article about how yahoo is starting to charge for their email service. Payment is not mandatory but if you don't pay you have many restrictions on your accont. It says that while many are angry about the change enough people are paying that it is helping Yahoo rebound from their slump. This seems like a recent trend in e-business." The conventional wisdom around web stuff that's been free, but converts to pay is that "they die off, no one wants to use it anymore etc etc", but I think what people fail to realize is that for many businesses, less people is *just fine*, if those people are paying.

29 of 248 comments (clear)

  1. Privacy Policy? by Psx29 · · Score: 4, Interesting

    I hope that yahoo! does not have the same lax privacy policy for paying customers as for non-paying customers

    1. Re:Privacy Policy? by Twirlip+of+the+Mists · · Score: 5, Funny

      Why should you care about Yahoo's privacy policy? You didn't give them any real information, did you? I thought every Yahoo user lived on 1313 Mockingbird Lane in Beverly Hills, CA, 90210 and had the phone number 212-555-1212.

      --

      I write in my journal
    2. Re:Privacy Policy? by BrokenHalo · · Score: 4, Funny

      This Yahoo user is called Sir Mudge Pinkerton-Bottomley and lives at 42 Bonkalot Street, Didjabringabeer in Western Australia, and his phone number is 9221 1111 (which is coincidentally also that of the Western Australian Police).

    3. Re:Privacy Policy? by grumpygrodyguy · · Score: 5, Interesting

      I hope that yahoo! does not have the same lax privacy policy for paying customers as for non-paying customers


      The really interesting part of all of this is that when Yahoo first started, thier service was exemplary. They were effecient, thoughtful, smart, and they implemented a host of useful resources.

      Then, like the vast majority of the dot-com companies, the VCs and big-business types pulled the wool over the eyes of the original founders(people like Jerry Yang). Or, put another way, the original founders sold out. After that happened(about 1 year before the dot-com crash) Yahoo's service has continually degraded. That's about 2 years of constant monotonic degradation of service. Now they're insisting on customers paying for a service that was taken for granted 2 years ago?

      Understandably the dot-com business model has all but evaporated in the face of diminished advertising revenue. (Ad companies are paying 1/10th what they used to per ad). This coupled with the fact that the stock inflators have all left town or gone broke, pretty much means that Yahoo has very little to go on. This of course is true of almost all the .com's, as the majority of them relied on advertising for revenue. (except sites like e-bay, etc. who are doing fine in this kind of environment).

      It's very unlikely that any of this will change, as consumers are more and more fervently seeking out products that will block advertisments. The latest batch of "pop-up" style advertising techniques has pretty much buried any respect the advertising industry ever had in the mind of the consumer. Said another way, advertisers are paying less and less per ad because they percieve how ofter those ads are being avoided. In turn they insist on "eyeball time" and make even more hostile ads. This in turn increases the consumers anger, and the customer finds even more effective ways to block out all advertisements. It's a cycle that bears very little hope for the advertisement based web-business model.

      I would suggest that there is a light at the end of the tunnel. But it requires the vast majority of us to embrace 2 distinct technologies. Wireless broadband, and Peer-To-Peer file-sharing, HTTP, and computing.

      Those are big hurdles, but in conjunction they appear to be within our grasp:

      1) Wireless broadband means buying a dedicated commodity unit for ~$150(before prices drop) that will provide 10Mbps 24/7(does your telco/cable co offer this?). Most importantly, there is no monthly cost...goodbye $50/month to Bell X.

      2) P2P transfer of not only files, but also dynamic content like webpages. This would involve a dramatic paradigm shift away from the current client-server model. But with > 100 10Mbps nodes per square-mile in urban areas, and intelligent caching, there's every reason to suggest this is possible.

      The client-server model that the "old internet" has relied on is broken. The ad-revenue cycle is destroying quality of service, shutting down many good sites permanently, and we're losing vast quantities of content in the process.

      Currently 99% of the server load is on 1% of the connected machines. Leaving the other 99% of the client base Idle. A small investment of ~$150(about the price of a 2nd harddrive, or a new soundcard) could change all of this. Then those 99% idle client boxes could become very powerful P2P nodes.

      This is not the distant future folks, it just takes a catalytic moment to get everyone to buy that 802.11X card. It happened to CD-ROM drives, sound-cards, etc. sooner or later a new standard component is adopted. Then the folks at Dell etc. will include one in every standard box they sell. Hopefully this will happen sooner rather than later. Then the OSS/private sector can build HTTP over P2P(challenging, but not impossible within this infrastructure).

      I'm sincerely hoping all of this happens soon, because many great web-sites are going down, and we're losing a lot of good content. There's less and less in that Google cache every day, and we need to change that.

      --
      The government has a defect: it's potentially democratic. Corporations have no defect: they're pure tyrannies. -Chomsky
  2. Subtle. by saintlupus · · Score: 5, Funny


    I think what people fail to realize is that for many business, less people is *just fine*, if those people are paying.




    Hmm. Sounds like we're in for another harangue on the topic of Slashdot subscriptions in the near future.




    I'd happily pay, if you guys would promise to use the money to buy some English as a Second Language courses. Maybe a spell checker.



    --saint
    1. Re:Subtle. by Twirlip+of+the+Mists · · Score: 4, Funny

      I'd happily pay, if you guys would promise to use the money to buy some English as a Second Language courses. Maybe a spell checker.

      What you have to realize is that Slashdot isn't a service. When you pay for a subscription, you're not paying for a service. If that's the way you look at it, you'd be a fool to donate, because the quality of the reporting and the discussions on this site really, really stinks.

      You have to think of Slashdot as a charity, like the church or the homeless shelter. By giving to Slashdot, you're helping to keep a bunch of dot-com refugees off the streets and out of the gutters. That's all there is to it.

      Which is why nobody subscribes. Charity sucks.

      --

      I write in my journal
    2. Re:Subtle. by deander2 · · Score: 5, Insightful

      Yes, +5 funny, I know, and yes I can take a joke, but...

      I subscribe to slashdot because I read and use it every day, both for personal and professional reasons. As a (yes, employed) programmer, I appriciate the time and energy it takes to no only write and maintain this site, but also supply it with a constant source of usually interesting and relevent news.

      I really couldn't care less if there are typos in headlines - Slashdot (for 4+ years so far) provides me with an insanely inexpensive yet invaluable service. The charity here is not you giving to them, but them giving to you.

    3. Re:Subtle. by AntiFreeze · · Score: 4, Informative
      Check out Cliff's journal Even Professional Writers Mis-Spell.

      Aside from other things, Slashdot does have a spellchecker. It just isn't a grammar checker. It doesn't correct the wrong word spelled correctly (i.e. thing where you meant think). Spellcheckers are limited.

      My advice is, if you're reading slashdot for its literary merits, maybe you need to start browsing at -1. In lieu of that, lighten up. And I'm sorry if that sounded harsh, but seriously, if you want to judge slashdot, judge it by what types of stories get posted, by the ensuing conversations, but not by the occasional mistakes of the editors.

      --

      ---
      "Of course, that's just my opinion. I could be wrong." --Dennis Miller

  3. Thats right! by Anonymous Coward · · Score: 5, Interesting

    " but I think what people fail to realize is that for many business, less people is *just fine*, if those people are paying. "

    Yes, thats the number one thing the dot-com business men and women must understand. You need paying customers in the dot-com industry just like everyone else, volume doesn't help one bit if no one pays anyway.

  4. Doesn't seem worth it by 0x0d0a · · Score: 5, Insightful

    I was sure that this was going to happen for years. Email is perfect for this -- high barrier to change. Get 'em hooked, then milk 'em.

    However, I expected that Yahoo was going to offer better service. I would assume that IMAP support, Yahoo not selling your information, etc. would come with this.

    There are better email providers, if you're planning on paying money. Take a look at the links on this page, ofr instance.

    I expect MS will collect a lot more users on Hotmail from this...

  5. *sigh* by ArizonaBay · · Score: 5, Funny

    This sort of stuff makes you miss the good old days when .com's weren't concerned with such trivial things like "profit".

  6. Finally by m_chan · · Score: 5, Funny

    Well, I for one am relieved to finally have the answer to what goes in the number 2 slot of all of those

    1. do this
    2. ___________
    3. profit!


    multiple choice quizzes people keep posting on /. I never was able to get that answer and was starting to feel like I was being picked on.

  7. this just in... by peachboy · · Score: 5, Funny

    this just in from the associated press:
    a new study has confirmed that by charging people, you can get money. this revolutionary new business model is being adapted to other businesses around the world as we speak.

    --
    "I just want to thank my coach Eric a.k.a. Disco for shattering my reality..."
  8. I would pay as well by Tomcat666 · · Score: 5, Insightful

    My E-Mail address is far too important for me to lose it. The address didn't change the last 3 years, and I would be happy not to change it in the near future.

    My problem is that the address is from a Freemailer service (GMX). So if they start to charge for their mail service, and I want to keep my mail address, I will have to pay.

    I think that's true for most people using Yahoo's mail service.

    --
    Two Worlds - One Sun [Spirit]
  9. Misleading Post by brunes69 · · Score: 5, Informative

    Once again, another overreacting FUD piece on Slashdot. If you read the article you will see that all they are doing is raising the price of their ALREADY pay per use "Yahoo Mail Plus" service, or whatever the name, from 19.95 to 29.95. They are also adding some new features to it like the ability to send email for different domains. They are not "taking away" anything from the standard Yahoo mail service, even though the article tries to paint it that way, by saying that "customers are restricted to 4MB in their inbox", etc. There has always been that restriction on inbox size, and nearly ever WebMail provider has a simmilar restriction. If they didn't then they'd all just become free warez repositories!

  10. Re:Slightly Offtopic: What does a /. sub get you? by Tack · · Score: 5, Insightful

    Right now all a subscription gives you is ad-free pages. But, honestly, yes, I think for most people who have paid, myself included, the main motivation is some form of loyalty and desire to help out.

    Slashdot definitely has its annoying faults, but there isn't a single website I spend more time on than Slashdot. Sometimes I find myself reloading the front page only a minute after I last viewed it. I am probably the kind of user Slashdot normally hates (frequent reloader), so I am only too happy to pay my share. I'd rather lose $50 than Slashdot, even with all its faults. :)

    Jason.

  11. Email important? Just get your own domain. by RobertB-DC · · Score: 4, Interesting

    I was very concerned about my email address... I had robertb@geocities.com from way before Yahoo! bought out Geocities. But as the spam increased more and more, the geocities.com/yahoo.com address became more and more worthless. The kicker was when some b*stard used my email address as the reply-to on a spam message... first my inbox filled with bounce messages, then with angry messages from recipients and sysadmins.

    I changed my reply-to address to the email on my own domain, dixie-chicks.com, and after a few months, all mail from people I cared to hear from was coming to an email address I controlled. The economics are there:

    * 12 euros/year (< us$15 even on a bad day) for a domain name from Gandi.net. If all you need is email forwarding, stop here -- they have it.

    * 6 bucks/month for a web host like the one I use. Includes no-ad no-popup web space and unlimited web-based email addresses. Not meaning to plug, but they are reliable and cheap.

    All together, it's worth $15 a year + $6 a month for a better deal and better service than I'd ever get from Yahoo!.

    --
    Stressed? Me? Of course not. Stress is what a rubber band feels before it breaks, silly.
  12. As a longtime Yahoo Mail user... by teamhasnoi · · Score: 5, Insightful
    I get 6 megs of space for mail. My wife just signed up for it and she gets 4 megs. I believe when it first came out you could get 10.

    I wanter her to change for a several reasons.

    She was on Netscape mail. It sucks over there! No filters, no checking pop mailboxes, spam up the wazoo, and no customiztion. I could send her a message, and she couldn't find it, buried under all the other messages.

    Yahoo is good for people who like their own 'space'. You can change up the background, theme, and mail folders - Netscape had no options whatsoever. She now is changing settings all over, and customizing stuff like crazy. This is good, because she's getting less of a 'I hate computers' attitude, and more of a 'This is cool!' attitude. (Every little bit helps ;)

    With all the Klez and its ilk, nothing like having all that NOT on my local machine. I don't have to worry about if Norton got his coffee today. Outlook finally doesn't matter since I can check a couple of pop mailboxes too.

    Yahoo is making constant visible improvements to the mail system, making it easier to use, spam free, and nicer to look at.

    I recommend it highly. And I'm just using the free service!

    Now, the Yahoo Groups on the other hand, parcel info out like its methadone. It makes navigating to find a nugget of what you're looking for into a painful experience. I try to avoid YG and Geocities pages whenever possible.

    The mail is where its at.

  13. Why I actually pay for Yahoo! Mail by jaaron · · Score: 5, Informative
    Okay, I'll admit that I actually pay something like $19.99 a year to Yahoo! for POP3 access. Why? Glad you asked. Here's a summary:

    1. Yahoo! Mail can be access anywhere. (So can most mail, but this is still important.)
    2. I can use a browser or a regular email client application (like Mutt or Evolution). The advantages of having POP3 access are important to me. I can easily save my email and I can use the features I need and like from my mail application of choice.
    3. When I email via POP3, I have NO Yahoo! advertisements attached.
    4. Yahoo! isn't going away anytime soon.

    The last one is why I choose to go with Yahoo!. My college email account will one day go away. I don't want to use (can't really) my work email for personal correspondence. I'm likely to move around the next couple of years, so my ISP will probably change (so there goes my ISP email account). There are other free email services, but none are as established as Hotmail or Yahoo!. And that's what it came down to. I wanted an email address that I could give out and not worry about it changing in a couple months, or even a couple years. If I decided to move to anywhere in the world, I would still have my Yahoo! email account. None of my other accounts have that stability. Few other online email providers can guarentee that kind of stability. Of course, Yahoo! could go out of business, or could sell off the email business, but that's a risk regardless of what I choose.

    Additionally I find that Yahoo!'s spam filter works fairly well for me (better than Hotmail), it's interface is more lightweight than Hotmail, I can even access it via a links or lynx web browser. You can change your privacy policy settings so that you don't get spammed or sold out and the service is always up. I made the decision several months ago and I haven't been disappointed.
    --
    Who said Freedom was Fair?
  14. Don't confuse a service with something else... by Shivetya · · Score: 4, Insightful

    Yahoo is providing a service here in the form of email. That provides a logical reason for someone to want to pay them.

    They are not charging for content, that is what fails. Many places that gave it away do find themselves in a lurch when they think they can charge for it. The problem most of those sites have is that they don't offer a compelling reason to pay.

    --
    * Winners compare their achievements to their goals, losers compare theirs to that of others.
  15. Free as a bad business model... by FearUncertaintyDoubt · · Score: 4, Interesting
    People have remarked that changing the terms from free to pay will piss off their existing potential customers. While this comparison may not be perfect, it reminds me of a friend who owns a laundromat. Like any consumer retail-type business, you have to be very concerned about the store environment. One of the fads in the business was "free dry." The dryers are free, and you mark up the washers enough to compensate. The free dry is supposed to attract customers -- in retail marketing terms, a loss leader.

    However, the catch is that free dry attracts the lowlifes. What happens is that seriously selfish moocher-types come in and split up their wash among 10 dryers at once. Other people get pissed off, some possibly because they wanted to pull the same stunt. Sometimes people even get into fights over this. Now the average guy who just wants to do a wash and dry and go home is thinking, screw this place. And he's the customer that the laundromat wanted all along, but now it's left with the worst customers.

    So my friend, said, no way am I putting in free dry. The fact is, the lowlifes drive out the good customers. And businesses are very much concerned about keeping the lowlifes away while catering to the paying customers while staying friendly to the honest-but-not-yet-committed customer. It's a delicate balancing act, and businesses that try to extend themselves to attract customers (e.g., free e-mail) can get abused by the moochers, which can seriously affect costs and threaten the business. So when someone says, "you're going to piss off the people who are getting it for free," the answer will be, "if they were just trying to leech off me, then screw 'em. If they're a good customer, they will be willing to pay a reasonable price."

  16. It doesn't have to be this way! by FreeUser · · Score: 5, Interesting

    Yahoo is right to do this. They provide a service at some expense and have to recoup their costs.

    This is true of anyone offering a service. Now, perhaps the costs (e.g. for my own web page, http://expressivefreedom.org) is low enough that the cost is simply donated, but in that sense that cost is recouped from my day job.

    The current client server architecture of the web (which BTW stands in start contrast to the underlying peer-to-peer architecture of the internet itself) places almost all of the cost burden on the publisher. The more popular a web site (or email service, or IRC server, or IM servcie, or what have you) the more bandwidth they need to buy, the more servers they need to cluster together, etc. They have no choice but to recoup their costs or stop offering the service, and if advertising is no longer sufficient (costs have outstripped that line of revinue), then customers will start to have to pony up.

    But what is often ignored is that there are architectures where the costs are shared and distributed.

    USENET was an early implimentation of this (still costly, because ALL the data is copied to ALL of the distributed servers), where everyone doesn't go to ONE server, they go to ONE of THOUSANDS. USENET still carries more data than any single website (even groups.google.com, which is merely an archive, not a stream of information).

    FreeNet is a better implimentation, where data which is in demand is replicated to caches closer (in terms of routing metrics) to those wishing to see the data. The originating site bears only the cost of making the inforamtion available (and providing a small portion of their local drive and bandwidth to cache other unrelated data) ... the more popular the data becomes, the more widedly it is distributed, the more available it becomes, all the while adding no additional cost to the providor. The cost instead is shared in tiny increments by everyone, in a barter system of essentially perfect effeciency.

    Restructure the web on a P2P basis, as FreeNet is doing, and you don't just get the Anonymouty and Uncensorability it was originally designed for, you get the scalability and low cost (regardless of popularity) of participation which the web in its current, client server form, will never enjoy.

    FreeNet does dump old information no longer in demand (least popular, oldest first), a la USENET, but that is easily corrected by the one intersted in providing said information ... for there is nothing preventing a static copy being preserved on your own system, to be reloaded into the net when the old copy expires.

    Were Yahoo running on such an architecture, it is likely that their add revinues alone would be more than enough to cover all their costs, and there would be no need to begin charging for their other free services. They might choose to anyway ... greed seems to know no reasonable bounds these days, now that we've elevated it to diety status ... but the bar would be very low for hobbiests and enthusiasts to step in and offer a free alternative. Adopting such an architecture would go a long way in keeping the net free, in both senses of the word.

    Unfortunately, there are powerful media interests who do not want to see a world of peers exchanging information, they want to see a new channel by which they can dump their dreck into our minds, while keeping us placidly on the couch where we belong. So, if such a change is going to occur (and with the release of FreeNet 0.5 the software is certainly available and usable), it will have to be because people like us, at the grass roots level, prefer an even playing field to the centralized, "read what we tell you" architecture cable companies, media cartels, Microsoft, and large content providors are tryig to foist upon us instead.

    --
    The Future of Human Evolution: Autonomy
  17. As one who pays for this service... by reynolds_john · · Score: 4, Informative
    I'm pretty unimpressed for my $19 per year.

    Yahoo gives me only 6mb of email space, and constant ads asking me to 'upgrade' my service for *another* $9.99/yr for only 25mb more space!

    Everything else on that service is for pay. If I go log in right now (oh yes and turn off Privoxy) even though I am a paid member, I am still faced with a myriad of flash and java ads. Then there is the giant ad at the bottom when you log in telling you that for $29.99 a year you can get more space, and more this and that. Then finally there are two separate links for mail upgrades on the front of the email page.
    Worse yet, my wife also pays for an account, but we get no added benefit of having two paid for email addresses.

    The only reason I kept this mail address is the same reason you keep cell phones; we have no loyalty to the provider, but isn't it a pain to switch addresses? I've had this email account for years.

    And.. what's the alternative? Hotmail? No thanks. One of the reasons I pay Yahoo is because it's cheaper than running my own email, and it's much more reliable than many others. However, I think that their price points for $9.99 are 1999 customer expectations. Everything is obviously throttled and tiered for marketing, and it sucks.

  18. Yahoo is just fine by xZAQx · · Score: 5, Insightful

    In a world full of companies like Microsoft, yahoo isn't really that bad. When I first moved out of my parent's house, I needed a new e-mail address, and one that would stick with me whenever I changed ISP's. I found out that yahoo provided free POP3 access (this was 1999 or 2000, btw) so I went with them. I was able to get a short, easy-to-remember e-mail address, with free POP3.

    So I was happy.

    Whenever it was that yahoo first announced they were no longer offering free POP3 access, I wasn't put off. I know many people were, but really, it was like 10 bucks per year; even my broke-ass can afford that.

    True, yahoo mail has a SLEW of spam. But they also add a header XYahooFiltered Bulk to each message with their proprietary filter deems as spam. I've been able (quite easily) to configure Mozilla mail and Evolution to filter based on this header, and dump all the spam in the trash. It works like a charm.

    --

    We dance to all the wrong songs.
    --Refused.
  19. Re:I pay by GordoSlasher · · Score: 4, Informative

    One word: Proxomitron

    When web ads started getting too obnoxious, I started running ad blockers. I don't mind ads that stick to the margins where I can notice them or ignore them. I do mind when they make noise just by moving the mouse over them, pop-up over other content, pop-under and force me to click, distract me with animations, or distract me with boobies (in the workplace especially!!!!).

    I am amazed that Yahoo would force ads at paying customers. I would never pay for a service that displays disruptive advertising to its subscribers.

    Go back to simple magazine-style advertising and I will stop running ad blocking software.

  20. HOw much of Yahoo's "sales" are tie-ins? by Animats · · Score: 4, Informative

    SBC is now bundling Yahoo's so-called "services" with DSL. They install adware and spyware, then insist on an EULA that doesn't let you remove the stuff. How much of Yahoo's "sales" are actually based on that?

  21. Yahoo personal address by claes · · Score: 4, Informative

    Does anyone here use Yahoo personal address service? It allows you to connect a personal domain that you own with your yahoo email account. You can easily choose what address you want to send from when you compose your email, and you get both email to foo@yahoo.com and foo@bar.com to your email account at Yahoo.

    I use it and it is a pretty convenient way to get your _own_ email address and be independent of the email provider. If Yahoo email start to suck, I can host my email myself, but so far it is far more convenient to let Yahoo do it.

    What I wonder is how this new pay service works with the personal address service.

  22. Paying is easy, cancelling is hard by tuffy · · Score: 4, Informative
    I've spent the last five months trying to cancel Yahoo's premium service, but they still keep charging me their fee every single month. You can't send a message to their online help system without some sort of Yahoo account (which I no longer have) and the only phone number is long distance (and typically with a 1+ hour wait on hold). Disputing the charges with my credit card company every month is getting more than a little tedious, also.

    In short, don't buy any sort of Yahoo premium service. There are plenty of great services out there with better tech support; I recommend using one of those instead.

    --

    Ita erat quando hic adveni.

  23. Customers by buss_error · · Score: 4, Interesting
    but I think what people fail to realize is that for many businesses, less people is *just fine*, if those people are paying.

    I once fired 7 customers... and my billable hours went up 35%. Now I was doing about the same amount of work, but was getting 1/3 more money.

    Some customers are too expensive to keep if they keep getting a free ride. The 7 in question here kept turning in call backs on things outside the scope of work, and demanding that these items be "fixed" before they would pay for the previous work. Since it's my policy not to bill for work the customer doesn't accept, it was getting too expenseive to let these keep sucking on the tit. So it was Bubh bye for them.

    One kept calling back, wanting more work done, and I finally told him that I felt that my competitor could better serve their needs. "But they won't come out to us anymore!" they said. "I won't anymore myself", I said.

    --
    Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.