Yahoo Drops Fee For Placing Personal Ads

By: Peter Loftus, Dow Jones Newswires

(AP) Citing customer complaints, Yahoo Inc. will soon drop a fee it began charging in October to people who want to place enhanced personal advertisements on its online dating service.

The Sunnyvale, Calif., Web portal will continue to charge a separate $19.95 monthly fee to people who want to respond to ads.

Yahoo’s decision to drop the $4.95 fee counters the trend among Internet firms of charging for services that used to be free. Yahoo has unveiled paid services in the last year to try to reduce its dependence on revenue from banner advertising, a market that’s in a severe slump.

Yahoo’s fee allows those in search of soulmates to add enhanced features, such as multiple photos, to their personals. The fee also gives these ads priority over regular ads, which are free.

But people browsing Yahoo’s personals didn’t like the fact that the same enhanced ads were at the top of the list, often for days at a time, according to Katie Burke Mitic, general manager of Yahoo Personals. Users found it annoying to have to scroll through the enhanced ads to get to the regular ads.

So now Yahoo plans to drop the $4.95 fee, probably within the next two months, Mitic told Dow Jones/AP Tuesday. It will abandon priority listings and incorporate other enhanced features, like multiple photos, into the regular ads, which will continue to be free. Browsing the ads also will remain free.

“We put a service out there that users said they wanted,” Mitic said. “In the end, users decided that wasn’t what they wanted. We’ll listen to our users.”

Yahoo’s action hardly represents a rollback of its overall strategy. Indeed, the bigger personals fee that was introduced last October will remain: it still costs $19.95 a month to be able to respond to a Yahoo Personals ad, among other options. Before October, both posting and responding to Yahoo Personals ads were free.

But the move shows that Web sites must engage in a bit of trial-and-error as they try to persuade people to pay for services that were once free.

Mitic declined to say how many people are paying fees for Yahoo Personals. The company recently said it has about 500,000 subscribers to all of its paid services. Other paid services include auto listings and certain e-mail features.

Despite the fees, Yahoo has seen strong growth in its personals business in the last six months, Mitic said. Monthly visitors to Yahoo Personals has risen to about 3.3 million in April from about 2 million in October, Mitic said, citing measurements supplied by Nielsen/NetRatings, a research firm.

Yahoo was the second most-visited online dating service in April. The leader was Match.com, a unit of Ticketmaster, which had more than 4 million visitors. Match.com’s traffic is bolstered by its alliances with online networks operated by AOL Time Warner Inc. and Microsoft Corp.

Mitic attributed Yahoo’s own growth to heavier promotion and the improved quality of its personals listings. She expects Yahoo Personals to continue to see strong subscriber growth.

Mitic also predicted that the online personals industry would experience consolidation in the next year. “We firmly believe at the end of the year, there’s going to be two or three big players dominating the market,” she said, adding that Yahoo would be one of them.

Besides Yahoo and Match.com, other popular services include UDate.com Inc.; Matchmaker.com, a unit of Terra Lycos SA; MatchNet PLC; and Lavalife Inc.

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