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It’s been a rough year for Yahoo! (YHOO). But according to the results of a customer satisfaction survey released Tuesday, the Yahooligans have reason to celebrate. The University of Michigan, which did a study of search engines as well as Web news outfits as part of its American Customer Satisfaction Index, reported that Yahoo surpassed Google (GOOG) in customer satisfaction for the first time, albeit by a narrow margin. Google had topped the University of Michigan’s ACSI ranking since Google was first included in the survey in 2002. Yahoo’s customer satisfaction score rose nearly 4 percent from a year ago, while Google’s rating fell almost 4 percent. Yahoo’s ascension to the top spot is a shock since it comes at a time when many on Wall Street and Silicon Valley wonder what’s next for the company. New CEO Jerry Yang has said that he’s looking to unveil a new strategy for the firm in the coming months and investors have shunned the stock after the company’s latest disappointing earnings results. And when I asked readers last week to chime in about what they would do to fix Yahoo, many were extremely critical of the company. Nonetheless, Larry Freed, the president and CEO of ForeSee Results, an online satisfaction measurement firm that is a partner and sponsor of the University of Michigan study, said that the re-design of Yahoo’s home page appears to be paying dividends with users. “I was surprised a bit to hear that Yahoo was on top but they have rebounded and relaunched their home page,” said Freed. “Yahoo seems to have turned the tide and I expect better things from them.” As for Google, Freed said that the company may need to jazz up its home page a bit. He said the biggest problem Google faces is that many of its newer features, while engaging, are not easy to find for the average Web user. “Google is evolving and adding great capabilities,” Freed said. “But the average consumer doesn’t know about iGoogle, Gmail and Google Maps. The Google home page looks almost like it always has. The biggest challenge for Google is that it seems like it did three years ago at a time when consumers expect things to move forward.” Looking at the other top search sites, Microsoft’s (MSFT) MSN enjoyed a slight increase in its user satisfaction score while IAC (IACI)-owned Ask.com saw its user satisfaction score increase by nearly 6 percent. But then there’s AOL, the search engine and portal owned by my parent company, Time Warner (TWX). User satisfaction at AOL plunged 9.5 percent from a year ago. Freed attributes the decline to marketplace confusion as AOL transforms from more of a subscriber-based Internet access provider to a site where its content is free and supported by advertising. “The good news is the problems AOL are having are less about the site’s capabilities and more about customer service during the site’s transformation. The redesign looks good but the challenge here is the transformation. Once that is behind them, AOL will be ready to compete more effectively.” Turning to news sites, the bad news for big media is that, for the most part, users are becoming increasingly dissatisfied with the large national media sites. Disney (DIS)-owned ABCNews.com and the Microsoft/GE co-owned MSNBC.com finished in a tie for first among the largest media sites. Time Warner’s CNN.com and Gannett’s (GCI) USAToday.com both saw their user satisfaction scores fall from a year ago. Freed said one problem for the big media sites is that more readers appear content to get their news from the likes of Yahoo and Google, which offer an aggregate of stories from multiple sources. Freed also said it was worth noting that the “other” category for online news had a higher average satisfaction score than any of the major national sites. He attributed this to the fact that many the sites of many regional newspapers are doing a good job of bringing a lot of local stories online. And often, stories about a person’s favorite local sports team or happenings in their hometown are of more interest than what’s going on in say, the 2008 presidential race. “The regional players have outperformed the top national sites. And when you think about it, regional media companies have done a better job of creating reader loyalty while the national sites have a harder time differentiating themselves,” he said. With that in mind, it will be very interesting to see if more big media companies, as well as the search giants, seek to cash in on the hyper-local trend that I wrote about last month. Increasingly, it seems that the battle for Internet readers and advertisers begins and ends with the companies that are able to provide the most comprehensive and relevant coverage of everyone’s individual backyard.
Posted by Paul R. La Monica 5:48 am 3 Comments
 | Add a comment good news for Y! on the same line GOOGLE is doing all the same stuff BUT WITH UPGRADED TECHNOLOGY …… which Y! Posted By r00t_expl0it, India, delhi : August 14, 2007 4:20 pm
I am very happy after hearing good such a good news.I use both yohoo and google but i prefer yahoo.Yahoo is my favourable search engine. Posted By Avijit sinharoy,Kolkata,West bengal,India : August 14, 2007 9:52 am
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Hi Paul,
It used to be that folks looked at insider stock sales activity very closely to get a hunch of what the future might hold. I don’t see too much of that sort of analysis these days … not in the tech sector.
Has anyone noticed the tech industry sell-off recently? I mean the tech “insiders”. Folks like Eric Schmidt, John Doerr, and Bill Gates … as well as a slew of other investment bankers, Chairmen, directors, CEO’s, and VPs within some our supposedly strongest technology companies?
I have, especially in and around Google.
I am not a financial analyst. Far from it. But I do know a thing or two about the stock market and advertising. I have been in or around the advertising business for over fifty years now. I’ve also watched a lot of tech companies rise and fall. I have a vested interest in the technology industries in that I own several companies who participate in the domain name branding and graphic arts content development sectors, both of which are affected by changes in the public perception of, and confidence in, some of the larger companies in our industry. I’m usually the eternal optimist, but I’m worried.
I’ve watched a handful of publicly traded Internet, software, entertainment, and telecom companies over the past 120 days very closely. Here’s a list in descending market cap order as of last Monday, August 6, 2007:
- GE/NBC Universal ($399.40B)
- Microsoft ($277.09B)
- Google ($158.59B)
- IBM ($154.82B)
- Apple ($117.4
- Comcast ($80.29B)
- Time Warner ($72.30B)
- Disney ($68.43B)
- eBay ($45.83B)
- Yahoo ($31.19B)
- Amazon ($32.49B)
- Adobe ($23.24B)
- WPP Group ($17.82B)
- IAC/Ask.com ($8.08B)
- Baidu ($6.93B)
- Getty Images ($2.07B)
- CNET Networks ($1.11B)
- Jupitermedia ($242.00M)
Of these, only GE, Apple, eBay, Amazon, and Baidu had an increase in value over the last three months. Amazon gained the most market value (roughly $4.5 billion) compared to second place Apple at just under $3 billion, while Google leads the losers with a drop in market value of just over $10 billion, with Microsoft a close second at around $9 billion. Any wonder why one of Google’s lead investors, its CEO, and other key executives are selling off shares?
In all, the six major U.S. search engine companies in our analysis (Google, Yahoo, Microsoft, IAC/Ask, Time Warner/AOL, and CNET) have lost a whopping $34+ billion. I thought profitable search advertising was growing like wildfire? On the other side of the world, China’s leading search engine company, Baidu, gained almost a billion dollars in value, among the strongest we’ve studied on a percentage basis.
I must be wrong. I also thought we had been in a strong bull market until the adjustments a few weeks back. Wasn’t the 14,000 breakthrough this summer a sign of good news for all industries, including “tech”? Better think again.
The money these tech companies are now paying for relatively small advertising companies is astronomical. Is it possible that all these online advertising companies, and some of their major clients, have been able to “hype” these tech oriented companies and their executives? Now wouldn’t that be the ultimate “spin”? Don’t you just love the ingenuity of these Madison Avenue types … especially the newer generation that focuses on the online world.
With all of these players (technology, communications, entertainment and advertising) now singing from the same song book, and working together on development, effectiveness, measurements, promotions, PR and content delivery, do any us lay people really stand a chance? Open your checkbooks.
“Vaporware in advertising”… don’t you just love it?
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Is it possible Yahoo has had this right all along? Although their market value has slipped substantially, their executives seem to be buying Yahoo shares, not selling. They are able to test new graphic advertising techniques without making a multi-billion dollar outside investment, like Google and Microsoft have chosen to do. Wouldn’t that be a “kick” if Yahoo has indeed spent this time of industry turmoil and chaos to strengthen its relationships with its advertisers, business partners, and customers while Microsoft and Google concentrate on destroying each other at all costs.
I am a little biased because I’ve stuck with Yahoo for the past ten years through thick and thin. But this does make for a compelling alternative to all the negatives I’ve read about the company from investment bankers, select journalists, and others over the past six months.
George P. Riddick, III
Chairman/CEO
Imageline, Inc.
griddick@imageline2.com