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Yahoo edges out Google in customer satisfaction

By Jacqui Cheng | Published: August 14, 2007 – 10:21AM CT

Google no longer holds the gold metal in customer satisfaction—at least not according to the University of Michigan’s American Consumer Satisfaction Index. Instead, Yahoo has dethroned Google and taken first place. And while the difference in score may not be much between the two right now, the pattern over time for these companies and others is far more telling.

Yahoo scored a 79 (on a 100-point scale) this year, while Google scored 78: clearly, the two are neck-and-neck in consumer satisfaction. However, the ACSI report notes that Yahoo’s jump into first place was a 4 percent increase over its score from last year, while Google saw a 4 percent decrease during the same time period. ACSI says that to the untrained eye, Google’s home page today looks almost identical to the way it looked years ago. This is where Google’s simplicity is apparently hurting it in the long-term, as new users just aren’t seeing Google’s new offerings—such as increased storage options, additions to Google Maps, and tweaks to Google Image Search—right in front of their faces like they do with other sites. According to the report, “[S]ome users say it looks stale compared to Ask.com, which has a very different display of search results.”

Speaking of Ask.com, its ACSI score skyrocketed this year, increasing by 6 percent to a score of 75. While the search engine still sits behind Google and Yahoo, it is clearly making big gains in the eyes of consumers; the site launched with a new interface and new features in June and became the first search engine to offer completely anonymous web searching with AskEraser in July. On the other hand, AOL is starting to look “old and busted,” as it dropped by nearly 10 percent to a low score of 67.

This year’s scoring doesn’t mean that Google is in trouble—the report notes that Google is still the most popular search engine (Yahoo is apparently now considered an Internet portal). However, the president of ForeSee Results and sponsor of the ACSI report, Larry Freed, told the Wall Street Journal that the trends give more important information than the scores. “Even more important than Yahoo’s first lead over Google is the trend of their scores moving in opposite directions,” he said. “Since the ACSI is a leading indicator of financial performance on the macro scale and at the company level, we may see a real turnaround for Yahoo in the next year.”

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Great strides made in search engine privacy, says report

By Jacqui Cheng | Published: August 09, 2007 – 11:27AM CT

“Privacy” is the name of the game among US search engines these days, and the Center for Democracy and Technology (CDT) is pleased with the progress that has been made so far. In a report released yesterday, titled “Search Privacy Practices: A Work in Progress” (PDF), the CDT outlined some of the changes that the five major search engines have made in order to be more conscious of privacy concerns. The organization also pointed out that the major search engines are beginning to aggressively compete with each other in order to provide the “best” privacy protections for their users.

“We hope this signals the emergence of a new competitive marketplace for privacy,” said CDT president Leslie Harris in a statement. “By themselves, these recent changes represent only a small step toward providing users the full range of privacy protections they need and deserve, but if this competitive push continues it can only stand to benefit consumers.”

The report reiterated many of the recent search policy changes that have made headlines in the last several months. In June, Google agreed to anonymize its search records after 18 months instead of 24 (or previous to that, never). That announcement was followed by one from Ask.com in July, which also said that it would also anonymize its data after 18 months, and then Microsoft just days later—also 18 months. Both AOL and Yahoo! have also agreed to shorten the length of time they keep records around, undercutting the others by anonymizing records after just 13 months.

The report also cited Ask.com’s new AskEraser tool as offering a level of user control that the others do not. AskEraser is a preference that users can set on the site, ensuring that absolutely no search records will be retained for that user past a few hours. CDT praises Ask.com for AskEraser and points out that while the others offer options to their users to extend the length of time their search records are stored, no others currently allow users to choose not to have records retained. CDT recommends that other search engines “continue to work towards providing controls that allow users to not only extend but also limit the information stored about them.”

The CDT provides other recommendations as well. While the organization acknowledges that some search engines have legitimate reasons for keeping data around for advertising purposes, it says that those companies need to store the data securely (hello, AOL) and provide notice to their users about what is being stored and for how long. The CDT also says that the search engines should work together to promote privacy protections “across the board” with smaller partners.

Despite the progress that has been made, however, the CDT still feels that there is a need for stronger privacy legislation. “No amount of self-regulation in the search privacy space can replace the need for a comprehensive federal privacy law to protect consumers from bad actors,” the report says. “With consumers sharing more data than ever before online, the time has come to harmonize our nation’s privacy laws into a simple, flexible framework.”

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Should Yahoo buy AOL, sell out to Microsoft, or go it alone?

By Anders Bylund | Published: October 30, 2006 – 03:11PM CT

Fortune magazine is running a bit of speculation on Yahoo’s fate, with a number of tantalizing options outlined for CEO Terry Semel to pursue. The article mentions conflicting insider reports on what’s going on, which might in itself be a hint of the turmoil at the online giant these days. With rivals like Google and eBay snapping up hot Internet properties left and right—and the occasional tasty nugget falling to dark horses like News Corp—Yahoo management might be getting antsy at the prospects of being left behind in this arms race.

Fortune’s top option for Yahoo would be to go ahead and wrangle out a deal with Time Warner to take over the AOL unit. It would provide “increased traffic and a shot in the arm” for the search advertising business at big Y, particularly since it would effectively override Google’s exclusive advertising contract with AOL from last year. But Time Warner says the unit is not for sale, and this would be an expensive way to go, with price estimates starting at $13 billion and no real ceiling. Yahoo currently has about $2.5 billion of cash on hand and $750 million of long-term debt, and a stock-swap deal isn’t particularly attractive with Yahoo shares trading near two-year lows today.

If AOL isn’t for sale, how about selling Yahoo to Microsoft? That would give Redmond a much stronger Web presence than the ailing MSN division alone, and the combination would rival Google in online revenue generation power. But the two companies have very different corporate cultures, and this smells like a repeat of the failed AOL/Time Warner synergies. Still, Microsoft could certainly afford the deal. It has cash equivalents of $32 billion, nearly equal to Yahoo’s $35 billion enterprise value, and unlike Yahoo, its stock has been on the rise for months and could be used for additional capital. Or, Microsoft could abandon its no-debt policy for a while. It would be a chewy nugget, but this deal could actually happen, if the management teams could agree to terms.

If not, Yahoo and eBay could merge, bringing together two companies with very different and still related areas of online expertise and clout. They have a history of discussing such a deal in the past, according to Fortune, and are already substantial advertising partners. But sources say the companies may just be too different to make this work, and the resulting entity would still be much smaller than mutual arch-rival Google. Let’s file this one under maybe, but not very likely.

Finally, the magazine concedes that Yahoo’s official stance is the real deal, and that the company intends to stay independent. “With the landscape changing, I am very, very excited about the opportunities for Yahoo,” said Semel two weeks ago, when Yahoo reported earnings. It is still the biggest destination on the Web, and just rolled out the beginnings of a new advertising platform that looks akin to the proven AdSense model in many ways. Can Yahoo stay hungry and on the move? If not, any of the more ambitious options could resurface as a Plan B.

For now, Yahoo is keeping busy with its own site, adding features and redesigning to meet the needs of an audience hooked on Web 2.0 features. There’s the oft-rumored acquisition of Facebook to work out, and there are still many independent, smaller services available to snap up before they get too pricey. If Yahoo wants a social networking presence beyond its chatrooms and discussion boards, there are plenty of options on the table.

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Yahoo Messenger and Windows Live Messenger get together

By Jeremy Reimer | Published: September 27, 2006 – 01:53PM CT

The battle for supremacy in instant messaging has been a lively and hard-fought contest in the past few years. Pioneers such as ICQ found themselves dwarfed by AOL Instant Messenger, and more recently MSN Messenger has battled its way into serious contention. Now, a detente between Microsoft and Yahoo is set to allow users of their respective instant messaging services to communicate with each other.

The collaboration effort, which has been going on since late last year with limited-release beta software, allows users of either Yahoo Instant Messenger or Windows Live Messenger (the product formerly known as MSN Messenger) to share friends lists and communicate with people on either service. Both Yahoo and Microsoft plan to release updates to their software to the general public. The announcement was made yesterday, with software updates expected to follow shortly (Messenger 6.0 for Mac OS X, which was released today, supports the Yahoo network).

According to a joint press release, the combination will create the world’s largest combined IM network, reaching nearly 350 million total users. (Apparently, software such as Trillian and GAIM that combine all the major IM networks into one does not count in this case.) This represents a serious challenge to AOL. According to a Nielsen/Netratings survey conducted in March 2006, AOL still has a commanding lead in the IM market, with 53 million active users worldwide, compared to MSN/Windows Live Messenger with 27 million and Yahoo with 22 million. Back in 2002, the distribution was similar: AOL with 22 million MSN with 16 million, Yahoo with 12 million, and ICQ still hanging in there with 4 million active subscribers.

Will the collaboration between Microsoft and Yahoo tilt the balance of power in the IM wars? It seems more likely that instead, more interoperability between networks will rule the day. Earlier this year, Microsoft announced that Vodaphone customers in Europe would be able to send telephone text messages to each other using Windows Live Messenger. Other phone companies are offering MSN and Yahoo integration in North America. In the end, instead of a struggle for dominance between different networks all using their own software, users may be able to pick any instant messaging software they like and communicate with anyone they choose to.

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Do you AOL-Yahoo? Maybe you will, if they merge

By Ken Fisher | Published: December 26, 2006 – 06:08PM CT

AOL and Yahoo are destined to merge, or so said Merrill Lynch analyst Jessica Reif Cohen in a note entitled “Is 2007 the year AOL and Yahoo are in play?” that was sent to investors shortly before the Christmas holiday. Both companies have itches in need of much scratching. Yahoo’s problems have been quite visible as of late, as noted in the now infamous Peanut Butter Manifesto. To boil it down to an oversimplification that’s still technically true, Yahoo is feeling the heat from Google.

AOL, on the other hand, is feeling the heat from, well, the Internet. The marriage of Time Warner and AOL has always been tough to understand (unless you’re Steve Case), and Time Warner has flirted with the idea of selling AOL more than once (they’re reportedly thinking about it again, after deciding “no” last year). As of late, the company has been plagued by declining revenues from its search program, which makes sense given that the number of users heading to that portal appears to be dropping off. In the wild world of mergers and acquisitions, this means that AOL needs to toughen up or jump ship, and toughening up is often done with a few reps on the Acquisition Trainer 3000.

Why would either AOL or Yahoo consider a merger? AOL’s move away from its subscription business (which miraculously is not already dead) has resulted in the company putting far more emphasis on Internet advertising. And what better way to boost advertising than to add a giant cache of eyeballs to your portfolio? On most days, Yahoo is the top destination online, with eyeballs aplenty. And if Yahoo is in trouble (which I don’t think it is, yet), AOL may be on the other end of the phone: “You’ve got salvation!” Or it could swing the other way, with Yahoo taking AOL off Time Warner’s hands. Only one thing is really clear: both companies are encountering doubtful investors, and both companies overlap enough in technology and operating costs that a merger should potentially mean more profit. The note suggests that a Yahoo purchase of AOL could bring a positive upswing for Yahoo in as few as two years, even if the acquisition price was $18 billion and only covered AOL’s advertising business.

For its part, the Merrill Lynch note only concludes that this is a strong possibility for 2007, not a foregone conclusion. I bet that’s good news for Microsoft. The company’s attempt to ramp up its search to compete with either Yahoo or Google looks to have stalled. A Microsoft-Yahoo merger isn’t totally out of the realm of possibility, and the Merrill Lynch note even acknowledges this. Microsoft could make another pass at AOL, but that strikes me as a fantastically bad idea, given the “Power of Greyskull” effect of combining the two company’s troubled public images (I can see the headlines now: Match made in h ell: Microsoft buys AOL).

The full list of “possible” suitors for AOL includes eBay (considered “not likely” according to the note), Google, Interactive, Microsoft, Comcast (not likely), News Corp. (not likely), Mr. Magoo (just kidding), and NBCU (not likely). Most curious thing about the research note? In running down a list of “cons” relating to the possible merger, “AOL Stigma” is listed for almost all possible suitors except for notably Google, Yahoo and Microsoft.

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Should Yahoo buy AOL, sell out to Microsoft, or go it alone?

By Anders Bylund | Published: October 30, 2006 – 03:11PM CT

Fortune magazine is running a bit of speculation on Yahoo’s fate, with a number of tantalizing options outlined for CEO Terry Semel to pursue. The article mentions conflicting insider reports on what’s going on, which might in itself be a hint of the turmoil at the online giant these days. With rivals like Google and eBay snapping up hot Internet properties left and right—and the occasional tasty nugget falling to dark horses like News Corp—Yahoo management might be getting antsy at the prospects of being left behind in this arms race.

Fortune’s top option for Yahoo would be to go ahead and wrangle out a deal with Time Warner to take over the AOL unit. It would provide “increased traffic and a shot in the arm” for the search advertising business at big Y, particularly since it would effectively override Google’s exclusive advertising contract with AOL from last year. But Time Warner says the unit is not for sale, and this would be an expensive way to go, with price estimates starting at $13 billion and no real ceiling. Yahoo currently has about $2.5 billion of cash on hand and $750 million of long-term debt, and a stock-swap deal isn’t particularly attractive with Yahoo shares trading near two-year lows today.

If AOL isn’t for sale, how about selling Yahoo to Microsoft? That would give Redmond a much stronger Web presence than the ailing MSN division alone, and the combination would rival Google in online revenue generation power. But the two companies have very different corporate cultures, and this smells like a repeat of the failed AOL/Time Warner synergies. Still, Microsoft could certainly afford the deal. It has cash equivalents of $32 billion, nearly equal to Yahoo’s $35 billion enterprise value, and unlike Yahoo, its stock has been on the rise for months and could be used for additional capital. Or, Microsoft could abandon its no-debt policy for a while. It would be a chewy nugget, but this deal could actually happen, if the management teams could agree to terms.

If not, Yahoo and eBay could merge, bringing together two companies with very different and still related areas of online expertise and clout. They have a history of discussing such a deal in the past, according to Fortune, and are already substantial advertising partners. But sources say the companies may just be too different to make this work, and the resulting entity would still be much smaller than mutual arch-rival Google. Let’s file this one under maybe, but not very likely.

Finally, the magazine concedes that Yahoo’s official stance is the real deal, and that the company intends to stay independent. “With the landscape changing, I am very, very excited about the opportunities for Yahoo,” said Semel two weeks ago, when Yahoo reported earnings. It is still the biggest destination on the Web, and just rolled out the beginnings of a new advertising platform that looks akin to the proven AdSense model in many ways. Can Yahoo stay hungry and on the move? If not, any of the more ambitious options could resurface as a Plan B.

For now, Yahoo is keeping busy with its own site, adding features and redesigning to meet the needs of an audience hooked on Web 2.0 features. There’s the oft-rumored acquisition of Facebook to work out, and there are still many independent, smaller services available to snap up before they get too pricey. If Yahoo wants a social networking presence beyond its chatrooms and discussion boards, there are plenty of options on the table.

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Yahoo edges out Google in customer satisfaction

By Jacqui Cheng | Published: August 14, 2007 – 10:21AM CT

Google no longer holds the gold metal in customer satisfaction—at least not according to the University of Michigan’s American Consumer Satisfaction Index. Instead, Yahoo has dethroned Google and taken first place. And while the difference in score may not be much between the two right now, the pattern over time for these companies and others is far more telling.

Yahoo scored a 79 (on a 100-point scale) this year, while Google scored 78: clearly, the two are neck-and-neck in consumer satisfaction. However, the ACSI report notes that Yahoo’s jump into first place was a 4 percent increase over its score from last year, while Google saw a 4 percent decrease during the same time period. ACSI says that to the untrained eye, Google’s home page today looks almost identical to the way it looked years ago. This is where Google’s simplicity is apparently hurting it in the long-term, as new users just aren’t seeing Google’s new offerings—such as increased storage options, additions to Google Maps, and tweaks to Google Image Search—right in front of their faces like they do with other sites. According to the report, “[S]ome users say it looks stale compared to Ask.com, which has a very different display of search results.”

Speaking of Ask.com, its ACSI score skyrocketed this year, increasing by 6 percent to a score of 75. While the search engine still sits behind Google and Yahoo, it is clearly making big gains in the eyes of consumers; the site launched with a new interface and new features in June and became the first search engine to offer completely anonymous web searching with AskEraser in July. On the other hand, AOL is starting to look “old and busted,” as it dropped by nearly 10 percent to a low score of 67.

This year’s scoring doesn’t mean that Google is in trouble—the report notes that Google is still the most popular search engine (Yahoo is apparently now considered an Internet portal). However, the president of ForeSee Results and sponsor of the ACSI report, Larry Freed, told the Wall Street Journal that the trends give more important information than the scores. “Even more important than Yahoo’s first lead over Google is the trend of their scores moving in opposite directions,” he said. “Since the ACSI is a leading indicator of financial performance on the macro scale and at the company level, we may see a real turnaround for Yahoo in the next year.”

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