*Yahoo Charges Fee to E-Commerce Sites, Does Not Guarantee Inclusion

Operators of small online stores are grumbling in reaction to a new $199 fee that Yahoo Inc. began charging for express consideration of whether e-commerce sites will be included in the Internet media giant's main directory.

Yahoo, Santa Clara, CA, announced the one-time fee this month as part of an expansion of its services for small businesses. Under the program, the company guarantees commerce sites a verdict on their inclusion status within seven business days. The portal at www.yahoo.com — and its reach of 47.3 percent of online users — is considered critical by many online businesses, especially start-ups.

“I don't like it, but I will probably pay it,” said Norman Miller, a Montpelier, VT, Web master. A review of his largest client's site statistics indicated that Yahoo accounted for 35 percent of its search engine traffic. “What bothers me is there is no guarantee that my $200 will get one of my sites listed,” he said.

Unlike other search engines, which use “spider” technology to automatically scour the Web and pick up URLs for their directories, Yahoo has staff members who review candidate sites and then make editorial decisions about whether to include them in the main directory. As a result, Yahoo incurs extra costs, and online businesses sometimes must wait months before they hear a decision from the company.

Yahoo's editorial staff scans the Web for the “best stuff” to list in its directory, but because the virtual landscape is always shifting, it's impossible for Yahoo to tell applicants when they can expect to hear a response from the company, said Yahoo vice president of production Tim Brady. He pointed out that the new service will relieve e-commerce sites from what can easily become a long wait in line.

“The lifeblood of a lot of these companies is through online sales. They need to get in as soon as possible and they'd be willing to pay for that expediting,” Brady said. “It's good for us because we're able to meet these guys' needs and make some money doing it, and it's good for them because it's a special queue just for merchants.”

Brady compared the service to paying for express delivery instead of regular mail, pointing out that sites will still be able to submit their inclusion requests for free and wait in line as they have before. And he stressed that payment of the fee will not affect how prominently a company's site is listed in the search directory or influence Yahoo's editorial judgment.

The issue of paying for placement took center-stage this month when it was disclosed that Amazon.com Inc. was letting book publishers pay to have their titles promoted in sections of its site called “What We're Reading” and “Destined for Greatness.” Amid a hail of criticism from consumers, the Internet bookseller said it will begin disclosing when publishers pay to feature their titles.

Other search engines generally do not offer faster decisions for a fee, though GoTo.com lists search results by how much advertisers agreed to pay for each click-through they receive. GoTo displays the amount companies paid beside each search result.

But business-related online message boards were buzzing this month with posts from Web store operators concerned that smaller engines might follow Yahoo's lead. The Yahoo portal is the second-most-visited site on the Web, behind America Online's www.aol.com.

Forrester Research senior analyst Jim Nail expects Yahoo's system to make life easier for users as it cuts down on the number of frivolous hits that often come up from online searches. In the end, Yahoo's program might just boil down to a “touchy public relations issue,” he said.

Jon Rittenberg, the founder and proprietor of www.simplymodern.com, a store that sells unique gifts and furnishings, said he understands why Yahoo is charging a fee but wishes the company had a separate fee scale for smaller businesses.

“They should move the decimal point over one place,” he said.

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