It has everything to do with customer satisfaction, friend...
Don't have the link anymore, but the 5% renewal figure came from Steve Gelsi at CBSMarketWatch on their 4/6/99 report, under heading "E-commerce value of Web portals to wane? Fewer than 5% of online retailers plan to renew deals." The story focused on client satisfaction, and revealed (thru an independent survey by Jupiter Communications) that advertisers on portals like YHOO weren't too thrilled with response rates. Go check it out.
Stories about the dubious value of banner advertising have been published in virtually all major media, from the WSJ to FORBES (they did a big feature on this subject sometime in late December, if memory serves me correctly) to The Industry Standard etc. etc.
When will people ever get it, i.e. YHOO and the other portals do NOT have a viable business model, at least not until they get into enough other businesses that they can (perhaps) get $$$ for doing things other than by running banner ads. Because banner ads are worthless; nobody clicks on them (except on highly content-specific sites, e.g. wine stores on wine.chat sites, etc.); nobody wants to pay real money for them, as a result.
Follow the money, Deep Throat advised. In TulipLand today, no one obviously is. Some day some one will. When? Who knows? But it's inevitable. |
