Yahoo Looking To Sell Off Yahoo Small Business

Yahoo is going through a lot of changes under the new leadership of CEO Carol Bartz. Yesterday alone they launched a new version of the highly trafficked Yahoo home page and let it be known that they’re looking to sell off two of their big “non core assets” – job portal HotJobs and Yahoo Small Business, which helps SMB owners get their sites online. According to Reuters, peHUB, and a host of others, Yahoo has been proactively trying to sell off the two properties for months to no avail.

peHUB noted:

“They’ve been approached by [major buyout firms] but they’re proactively looking to sell to a strategic investor like a Careerbuilder or Monster.com,” says one source familiar with the situation, adding that the company may be looking to avoid a future embarrassment. “If a Warburg [Pincus] or a Spectrum [Equity Investors] buys HotJobs for $300 million and resells it for $500 million in two years, that’s going to look pretty bad [for Yahoo],” says this person.

If you’ve never used it, Yahoo Small Business is the hosting arm of Yahoo. It includes Yahoo Web Hosting, Yahoo Store, Yahoo Merchant Solutions, Yahoo Domains, and Yahoo Business Email. Basically, it holds the tools that many business owners have relied on to build, market and get their sites started on the Web. It’s also presents many small business owners with their first introduction to Yahoo Sponsored Search and has a small business resource center similar to the one offered by Dell.

I was surprised when reports surfaced that Yahoo may be selling the property. Earlier this week during the Yahoo Q2 earnings call, Yahoo CEO Carol Bartz commented that local relevance of both content and advertising was becoming increasingly more important to users and that capturing that market was “a big focus” to Yahoo. She then even went on to talk about Yahoo’s new partnership with Bank of America that aims to promote a small business answers center. She gave every indication that small business was a major component of Yahoo’s bright new future.

If Yahoo is so committed to focusing on local relevance and advertising, it seems odd to me that Yahoo Small Business would be on the chopping block. What better way to “capture” the local market than to give small business owners the tools they need to take advantage of what local has to offer them? Doing so educates new business owners to budding opportunities and puts Yahoo’s host of services in their line of sight when they’re making purchasing decisions.

It’s hard to say what would become of Yahoo Small Business were Yahoo to sell it. Obviously, one of the reasons it’s been so successful is because of the huge levels of traffic it sees simply by being tied to Yahoo. Without the Yahoo name behind it, much of that luster will quickly fall off. And because of that, they’ll have a very hard time selling it unless the deal accounts for it still holding on to the Yahoo name.

It’s worth noting that should Yahoo sell Yahoo Small Business, that won’t affect Yahoo Local or their local search capabilities. The two divisions are separate, it just seems odd that they wouldn’t use them to strengthen one another. If Yahoo is looking to increase local ad prominence, then throwing away the resources and tools that make it easier and less intimidating for SMB owners to get involved seems counter intuitive.

But only time will show whether or not Yahoo is able to unload both HotJobs and Yahoo Small Business onto another entity. I’ll definitely be watching to find out. If you haven’t checked out the Yahoo Business Center, you may want to take a look at some of the small business resources and guides it provides. There’s a lot of great information to be found.

19 Comments ▼

Lisa Barone


Lisa Barone Lisa Barone is Vice President of Strategy at Overit, an Albany Web design and development firm where she serves on the senior staff overseeing the company’s marketing consulting, social media, and content divisions.

19 Reactions

  1. Interesting. The rising unemployment rates is going to trigger a lot of growth in the small business sector. The trick is to find a way to profit from service this sector.

  2. Wow, that’s surprising. Hopefully someone will see the value in them and snatch them up soon.

  3. Yet another example of why Yahoo just keeps falling behind. From Yahoo’s perspective they probably just want to focus on the “big dogs” and cash out on the low-margin, small business market. It’s easier to work with a few really big companies rather than a lot of little ones (from a service and support perspective). The problem is that they’ll lose out on all the potential “big dogs” that would have come from their small business market (like a minor league system feeding the big league team).

    Ebay took a similar angle when they upped the fees on smaller sellers and I think it is killing them. If your listening Carol, this is a bad move.

  4. Martin Lindeskog

    Robert,

    Another example that Yahoo is missing the “long tail” of plenty of small business that compiled together is a great source of revenue. What’s Yahoo’s core business nowadays? Is is a home page portal, a resource site with different categories, or what?

  5. If someone offers enough money they’ll sell it, they wont care if they resell it for a higher price, that is just the way things go sometimes.

  6. Yahoo is already charging over $30 for a domain and some services thrown in when Go Daddy and DirectNIC are charging $8-$15. If they can’t make more charging twice as much as the competition, they must be doing something wrong and need to get out…. This looks like an opertunity to me.

  7. wow, Yahoo management are truly crazy. The “synergies” (big corporate buzzword) they could develop between Yahoo Local, Yahoo Small Biz and Yahoo Sponsored Search should be a massive profit center, on top of partnerships with IYP’s etc, etc…

    I think the fall out of the potential takeover by MS, and now MS Bing eating away their search market share, has the whole corporation running around with their heads cut off.

  8. This is fascinating, during down times small business gets hit hard on the front end and tends to come back with a roar as things get better. I wonder if the don’t think the economy will improve any time soon?

  9. Intriguing. I’m not surprised they have this though. With the economy and everything, this is sure to be a hit!

  10. TJ McCue

    Lisa,
    I’ve read your post several times trying to figure out what they could be thinking. At a time when American Express OPEN is changing to accommodate the small biz market. Intuit is building its small biz community. The list goes on.

    The only thing that makes this make sense is the comment by Rex. If they are charging more than twice for the simple domain reg service, they may simply be upside down. It might be better for a more savvy large player to buy them and grow it. GoDaddy would actually be a prime candidate or another large host. I agree with you, though, Lisa — if Yahoo sells it, many will leave. The Yahoo brand is what keeps people there. There’s a lot of trust and equity in the Yahoo name and given that people are not leaving in droves at the sound of this change says something, too.

  11. Joel Libava

    Hi Lisa,

    Yahoo just made a smart move.

    The Small Business Suite was a FAIL.

    Move on, right.

    The Franchise King
    Joel Libava

  12. Very interesting article. Like Curt, I too would think that with rising unemployment that small business would be pushed more to the limelight thus the need for more exposure. Curious to see the results.

  13. TJ McCue

    @Joel
    How do you think they could do it better and make use of it. I see the failure, but there are so many trying to build just a portion of what Yahoo has done. They have some of it right.
    Buy them, Joel and make a franchise out of it.
    TJ

  14. Seems that Yahoo is also facing the money cries these days due to long going recession, so now has to stop providing free services and switch to generate some income.

  15. Yahoo is the worst ever found crap body in the innternet world. On the name of small business web hosting its not only charging people higher than the prices but scamming people around.Its services are really disgusting. I amage why people are still mad about Yahoo- the heck. Go to hell Yahoo !

  16. Last year yahoo was charging domain registration + hosting fee of Rs 2204 (including taxes). Now its charging Rs 3304 for the same. If yahoo doesn’t have the other source to forfeit its loses why not small business from Indians.

  17. Yahoo Small Business is a strong piece for many users trying to break into the online space. Selling this off would be a big mistake – instead Yahoo Small Business should focus on adding a ton of more features

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