“We’re Yahoo – May We Gouge You?”

I’ve been using Yahoo’s web services pretty heavily since starting my business a couple years ago. I have a premium small business account for their e-mail service, and I’ve reserved a number of web domains through Yahoo (a number being actively used, others held in reserve), because at $9.95/year/domain, I couldn’t afford not to.

However, Yahoo sent out notice earlier this year that the cost of domain name renewal was going up to $12.95/year, starting in March 2008. Oooookay, I guess that’s not too big a leap, even though I seriously doubt that their costs for administering those domains has jumped by 25%, but I’m not going to quibble.

All of a sudden, now, another renewal notice comes that, starting in July 2008, the cost has gone up to $34.95/domain/year! Why? Or should I say, Y?

That, my friends, is gouging. Other companies are offering domain registration for way less, and at last check, digital storage of domain names wasn’t on the short list of inflationary pressures. Yahoo is obviously counting on the relative pain of changing providers as a strategy for extracting maximum dollars from current users.

Way to alienate your customer base, folks. I’ll be looking elsewhere…

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About Steve Woodruff
Steve Woodruff is a blogger, a Connection Agent, and a consultant in the pharma/healthcare industry. He specializes in helping people and companies make mutually beneficial connections.

5 Responses to “We’re Yahoo – May We Gouge You?”

  1. Doug Meacham says:

    That seems like an odd way to operate. If they has some sort of lock on domain registration (like cell providers have on wireless service), I could see them being able to do this with minimal impact to their business. But they are in a commodity business and the marketplace should set the pricing. I’m sure that a team of analysts have crunched the numbers and determined that they will lose a certain percentage of people like you, but those who stay will make up the difference and then some. Of course, those analysts usually don’t factor in the impact of negative publicity. This would be a good time for GoDaddy or some other low cost leader to step forward with a strong offer.

  2. Zing!

    I’ve never been a huge fan of Yahoo! (I’m a Google man myself), but this still seems a little silly. With all the negative publicity going on around them right now, don’t you think they’d be going out of their way to take care of their customers? Instead they keep telling shareholders that they’re creating value, what they’re not telling them is that they’re doing it through manhandling their current customers.

  3. Karen Swim says:

    Steve, incredible! I agree with Matt, particularly given the current environment one would think Yahoo would be trying to polish its image not tarnish it further. Granted the price is still not a lot of money but it is much higher than others in the market. What a dumb move!

  4. Martin Coles says:

    That is beyond ridiculous! I’ll be sticking with godaddy.com, until I hear that they are doing something similar of course…or Dana stops driving hehe

  5. Brett says:

    I’m sure they can find some way of blaming the increase on oil prices. Everyone else is. Maybe they’re covering the cost of Jerry Yang’s trip to the most recent board meeting to find out who wants to buy Yahoo next.

    It’s sad, since their store feature is something that still gives them a competitive advantage.

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