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Free Is Bad

“Free is a magic word,” said Dick Benson. Uh-uh.

March 4, 2014 By Denny Hatch
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Yahoo has 196.6 million unique visitors each month.

Yet Yahoo generated zero new revenue in 2013.

My opinion: Yahoo CEO No. 6 (in as many years), Marissa Mayer, is hanging on by her fingernails.

Any person with 196.6 million names unable to generate new revenue should seek some other line of work.

What triggered this column was a Feb. 17, 2014 Time magazine story, "THE MAYER EVENT: It's crunch time for Yahoo's turnaround strategy." [See the first image in the media player at right]

The Time MBAs came up with five pronouncements for Yahoo's Road to Recovery:

  • Getting Newsier
  • Launching a Network
  • Powering Your Apps
  • Streamlining Its Ads
  • Reinventing Search

Not one of these programs asks for money from the 196.6 million users. The business model is all about getting advertising dollars.

Alas, Yahoo Ad Sales Have Been Tanking for a Year
The company's closely watched display-ad revenue, which makes up about 41 percent of the company's total
, fell another 5.6 percent even as the overall market grows quickly.Douglas MacMillan, The Wall Street Journal

It's clear Mayer knows nothing about marketing. Neither she—nor the smartypants MBA writers at Time—have a clue about the technique of making offers, asking for orders, making it easy to order and delighting happy customers.

"People love to be sold stuff," said my first employer Frank Watts.

A Quick History of Paid to Free
When the Internet started to take off in the mid-1990s, the mantra of the kids who started it was "Everything should be free."

I switched from AOL to Yahoo as my email provider in 2005.

When AOL offered free service to its paid members, it lost 12 million paid subscribers and $1 billion revenue a year

In the past 8 years, I have never paid Yahoo a penny. I have never responded to a Yahoo advertiser. I have never used Yahoo for search. I don't read Yahoo News, Sports, Finance, Weather, Games, Groups, Food, Tech, Answers, Screen, Shopping, Travel or ♥♥ Dating.

 
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