Should You Yahoo!?

Should You Yahoo!?

We are frequently asked by our mortgage company clients if they should spend the money to list their business in the Yahoo! Directory. This month’s article will examine a case study for spending $299 per year for what, at first glance, appears to be a dying Internet resource.

Yahoo! and Google: Two Giants

According to Media Metrix figures for the second quarter of 2005, Google responded to 5.65 billion U.S. search queries, or 37.6 percent of all queries. Yahoo! was second with 4.65 billion queries and 30.4 percent market share. After that MSN has approximately a 15.6 percent market share followed by AOL/Time Warner with 9.2 percent and Ask Jeeves with 6.1 percent of all search engine queries.

If you combine the market share numbers, Google and Yahoo! control just under 70% of all the searches on the Internet. It is important to have a presence in both major search engines if you expect to earn revenues from the net.

Receiving Traffic from Yahoo!

There are several ways to promote your business utilizing Yahoo! The first way is to become involved with their Pay Per Click (PPC) program called Yahoo! Sponsored Search. We’ve discussed various aspects of PPC advertising several times in recent articles, so we won’t go into detail here (you can visit our web site for all past magazine articles at The other prominent method to allow you to promote your business is to be included in the Yahoo! Directory. Additionally, you may receive traffic from “natural search rankings,” i.e. your site is top ranked for various terms, without paying for the ranking.

The Yahoo! Directory has been in place since the beginning of Yahoo! With the emergence of Google, coupled with the Yahoo!’s Pay Per Click program, fewer and fewer visitors are finding their way into the directory in order to being able to see your company’s directory listing. At first glance, it appears that the Yahoo! directory has outlived its business usefulness. Furthermore, the Yahoo! directory costs $299 to submit your site to Yahoo!, with no guarantee that you will be approved for inclusion, and then an additional $299 per year to stay within the directory once you are approved.

Case Study: Disappointing Results from The Yahoo! Directory

One of our clients recently shared with us their logs of visitors from Yahoo! This mortgage company examined a period of about four months and found approximately 12,000 visitors which were referred from Yahoo! Upon closer examination they discovered that less than one percent of their Yahoo! visitors actually came from the Yahoo! directory. The bulk of Yahoo! visitors were obtained from their PPC keyword listings and natural search results. The owner of the company was very disappointed and was ready to cancel the Yahoo! listing.

The owner was under the belief that the $299 annual fee no longer had value or merit. She further speculated that because this fee was so small, that for many companies it was under the radar; that companies just paid it. She speculated that Yahoo! knew it was dying but continued to bill it as it proved to be an ongoing source of revenue. She had concluded that she did not want to automatically pay this nominal fee.

In Search Of Links

We actually went and looked up exactly where this company was listed within the thousands and thousands of subdirectories that make up the Yahoo! listings. We experienced a little trouble finding her company’s link, which further convinced the owner to cease paying the $299 annual fee.

Part of her rationale was based on the fact that it was so hard to find her own company. How were people who didn’t know who he was going to find her company in the directory?

The Default Search Parameter Is Not fhe Directory

We went about performing typical searches for related keywords such as home loans and mortgages. The owner pointed out that the default search was not a directory search, but a web search, which further convinced her that it was futile to pay for the directory inclusion.

A representative directory category listing looks like this
as you can see, this is not something a typical user would type in. The owner was further exacerbated when I pointed out that the top listings on the directory page, were also paid for. In other words, the companies listed first were paying an additional fee per month to be ranked ahead of all of their alphabetical listings in the Yahoo! directory.

Based on all this information the mortgage site owner affirmed her conclusion to not renew her Yahoo! directory listing.

Wait… There Is More.

I pointed out that the seemingly expensive Yahoo! Directory listing has one, often unseen, major benefit for her website — linking. The Yahoo! Directory listing is the most valuable text link that an online company can acquire. The single Yahoo! Directory link can even influence your Google ranking due to the PageRank scoring system Google employs to determine who gets ranked first and who gets ranked last.

The Variable Value of Links

Not all links have the same value. Imagine comparing the amount of business you would receive from a link from your Aunt Betsy’s restaurant web site compared to having a link from the Fannie Mae web site. Google and Yahoo! recognize this fact that some links are just better than others and this greatly influences their rankings of your site.

Coupled with the fact that not everyone who applies to the Yahoo! Directory is approved, so this exclusiveness makes a Yahoo! link quite valuable.

$299 Is A Deal

After exploring the linking value of a Yahoo! Directory listing, the mortgage web site owner agreed that the tangential impact is worth the $299 annual fee, especially when considering the value of just one extra closed loan.

In short, while the obvious value to a Yahoo! Directory listing is the anticipation of direct traffic clicks, often the more valuable aspect is to provide a substantial and quality link to your site, with the result an increase in the ranking of your site.

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