The Yahoo Dossier
Last month, Peggy and I went to Europe at the behest of a former client. The challenge: to head up an internal workshop on how to monetize the 800,000 readers of his free online publication.
In the past several years he introduced several paid publications with fairly high subscription rates. These pay the bills.
But as I pointed out, if one or more of the editors of these pricy communiqués were hit by a bus, his business could be seriously hurt.
"Eight hundred thousand readers," Peggy muttered when I gave her the outline of the challenge. "How can we get 1 euro a month out of these people?"
Only two elements were off the table: advertising and list rental.
Okay. So how does a publisher monetize 800,000 freeloaders—without resorting to advertising or list rental?
[See the first image in the media player above right for the tacky frontispiece I designed for our workshop agenda.]
Quite simply, I went through my private business and marketing archives (plus Google) searching out publishers who out of necessity turned themselves into marketers.
I looked at what others had done to 1) monetize their existing material and 2) come up with line extensions—relevant new products and services that should delight their existing readers.
I found 24 possibilities—versions of new products and services that were being offered to readers by U.S. publishers.
Following the conference, I did not send a long summary or my usual series of takeaways.
Instead I wrote direct marketing letter offering a number of the agreed upon products and services, piling goodie on top of goodie on top of goodie. The price: just 1 euro a month (or 9 euros annually).
My two lodestars:
"See what others are doing successfully and then STEAL SMART." —Dorothy Kerr, Former circulation director of U.S. News & World Report
"The right offer should be so attractive, only a lunatic would say no." —Claude Hopkins
Excerpts from our final exchange:
CLIENT TO DH:
The letter is very good. With your permission I would like to incorporate much of it into a letter of my own.
DH TO CLIENT:
You don't have to ask permission.
You own it.
What Triggered This Column—the Continuing Saga of the Ditzy Blonde Goddess
DISCLAIMER: On Dec. 11, 2005, I switched from AOL to Yahoo, where I have been ever since.
In 2012, Marissa Mayer became the sixth CEO of Yahoo in five years.
It was hoped by all that wunderkind would take an amorphous collection of services and give it a positive new—and profitable—identity.
Mayer has failed—totally.
As I write this (Oct. 2, 2014, 8:36 AM) the following notice is in my Yahoo inbox:
! We're experiencing some technical difficulties...
We're sorry, but Yahoo Mail can't load due to a temporary error. You can try back again shortly, or visit our help pages for ways to troubleshoot the issue. Temporary error 14.
- The elegant Yahoo email system was summarily revamped and customers (including me) are berserk.
- Mayer's work ethic is an oxymoron. She missed a key dinner meeting with top advertising prospects (MillerCoors, Chobani yogurt, IPG) because she "fell asleep."
- As well as sleeping on the job, Mayer has become a publicity hound, posing as a glamorous blonde goddess for Vanity Fair, Fortune and Vogue. [See the second image in the media player at upper right.]
- Yahoo said its email service recently fell victim to a coordinated cyberattack that resulted in the compromise of an undisclosed number of user accounts. —Los Angeles Times, Jan. 30, 2014
- Wall Street has persuaded Mayer to become a manipulator of stock. In 2013, she spent $1.1 billion to buy Tumblr—a company whose revenue was a laughable $13 million in 2012.
- Mayer's acquisition spree included getting in on the ground floor of the Alibaba craze prior to the IPO. Currently Yahoo owns a $36 billion stake in the Chinese company.
According to the Times' Michael J. de la Merced and David Gelles:
Still, the remaining Alibaba stake is by far the single most valuable asset that Ms. Mayer oversees. The second most valuable one is the company's 35 percent stake in its Japanese affiliate, Yahoo Japan, which is valued at about $8 billion.
Takeaways to Consider
- Alibaba is emphatically NOT Yahoo's most valuable asset.
- For starters, Yahoo is sitting on a $36 billion nut entirely dependent on the whims of the wackadoodle Chinese government, which has a pernicious distrust of the Internet.
- Apart from the dependence on China’s hoped-for good will, is the Alibaba asset a slam-dunk benefit for Yahoo stockholders? Forbes’ Gene Marcial thinks yes. Forbes’ Eric Jackson believes it’s dicey.
- From a direct marketing geezer's perspective, Yahoo's most valuable asset is 273 million mail users worldwide (including 81 million in the U.S).
- Mayer has not come up with myriad ways to monetize this huge database by creating spectacular offers that could make our lives better, easier and more fun.
- Rather, she is fixated on trying to get more advertising in order to go head-to-head with everybody else on the Web.
- Check out the amazon.com business model. Jeff Bezos is engaged in putting every retailer in the world out of business so that Amazon, UPS and DHL are the last men standing.
- If you can't sell stuff to your customers, you don't have a business.
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