by Mike Masnick

Yahoo Ditches Premium Service Package; Did Anyone Notice?

from the hello?--anyone-in-here? dept

A few years ago, when Yahoo was still struggling a bit to figure out what its business model was, it decided to try to be a bit more like AOL, by offering a "premium package" of services that people could layer on top of whatever broadband package they already offered. It was like AOL's "bring your own" program -- except that Yahoo never really did much to explain what the actual benefits were to paying. Instead of just recognizing that they could attract more users (and more ad revenue) by making better services available to users, they hoped that some higher tier would attract some paying users. It would appear they were wrong. The company has now ditched the service, noting that it "was not an essential service for Yahoo users." In other words, there were very few people using it. Of course, if Yahoo had simply offered these higher level of services for free, and continued to sell ads, they might have been able to keep more users away from the competition. When you set up a tiered service like this, the incentives are rarely good. You want to keep the "really good" stuff in the premium package. That's great... except if you have competitors who are focusing only on offering free versions. Then, hiding your best features behind a pay package means that your users simply go to the free competition, which is likely to be better than your free-but-not-too-good version. There are cases where a tiered version makes sense -- but only when it's obvious why the tiers cost more money (i.e., the customers can see the additional cost associated with the tiers). Simply charging more for extra "features" will almost always backfire -- often driving the customers you want to your competition.

Reader Comments (rss)

(Flattened / Threaded)

  1. identicon
    Marshall, Mar 23rd, 2006 @ 5:45pm


    I've never even heard of Yahoo's premium package... That just goes to show you how well it worked ;-)

    reply to this | link to this | view in thread ]

  2. identicon
    Sean, Mar 23rd, 2006 @ 6:36pm


    I also had no idea. Nor would I purchase anything "premium" from Yahoo.

    reply to this | link to this | view in thread ]

  3. identicon
    Mike, Mar 23rd, 2006 @ 6:41pm


    I susbscribed to a premium package, it included their launch music service, and their all-star yahoo game service, for 5.95 extra to my dsl bill.

    I actually enjoyed the premium services. ho hum.

    reply to this | link to this | view in thread ]

  4. identicon
    Jeremy, Mar 23rd, 2006 @ 7:12pm


    So true i saw the Premium package looked at its features and it never made me say Oh i want to pay for that, when the free stuff is better

    reply to this | link to this | view in thread ]

  5. identicon
    Ed West, Mar 23rd, 2006 @ 7:27pm

    Yahoo Service - Not

    Why would anyone pay Yahoo for a product when their service/support is almost non-existent.

    reply to this | link to this | view in thread ]

  6. identicon
    Michael Tuchman, Mar 23rd, 2006 @ 7:55pm

    But E-mail?

    Notice they still have a premium e-mail service. The issue is spam-filtering, which is better on their premium service. This may not be big news, but who wants to know they're being handed extra spam?

    reply to this | link to this | view in thread ]

  7. identicon
    Anonymous Coward, Mar 23rd, 2006 @ 8:23pm

    i bet the reason that no one joined was because they had to give private information so yahoo could turn you over to the chinese government if necessary.

    reply to this | link to this | view in thread ]

  8. identicon
    David Mcleod, Mar 23rd, 2006 @ 9:34pm

    Re: Yahoo Service - Not

    i've had yahoo dsl for over 5 years and i have always thought there service and support were top notch!!!!!!!

    reply to this | link to this | view in thread ]

  9. icon
    Peter Blaise Monahon (profile), Mar 24th, 2006 @ 5:40am

    "Premium" Yahoo = more pay for more pain!


    I also paid $20US/year for Yahoo "premium" email. My reasons? (a) I had a well-established email address so I didn't want to loose it but I wanted more features, and (b) I wanted POP access, which is available for Yahoo outside the US, but not here - surprised? Yahoo! Mail disabled free access to its POP3 service on 24th April, 2002. What a pain. With POP3, I can ignore the bulk/spam bin and download only my inbox. Yahoo accurately saw this as missing seeing the spam/advertisement they so depend upon for income. So I've spent ~$80US so far since 2002 for my annual re-subscriptions to POP3 within Yahoo email.

    I may revert to the wonderful Yahoo Pops/YPOPS, free at that loads POP3 drivers on my own computer for POP3 access to the free version of Yahoo email, and stop spending $20US/year for what? Get YPOPS from SourceForge

    or from

    Yahoo so-called "premium" spam filtering for me is a joke, often repeatedly putting email from me and my own replies in the spam/bulk bucket, forcing me to have to browse the spam/advertising daily anyway.

    Then Yahoo turned off the otherwise useful email search feature from being able to search through the spam/bulk bucket for the few good emails that I was after, again forcing me to browse the spam/bulk bin daily anyway.

    Why bother?

    Yahoo service people have been snide on the phone, threatening to do harm to my account if I criticized the service I was paying them for. Be forwarned - IF you can even find a way to call them, THEN be polite and subservient and grateful. Apparently they treat their employees as poorly as they treat their (supposed) customers, er, "end users".

    Let's get real - Yahoo's customers are the mass advertisers, NOT the millions of end users of Yahoo/GeoCities/YahooGroups/Maps/YallowPages and the other formerly independent free services Yahoo has purchased over the years.

    Until Yahoo turns around and pays greater attention to the services upon which it sells advertising, it will continue to struggle as an also-ran. Sadly, they mistake being a behemouth for being successful.


    PS - I know this is "the Internet" and people often share mere one-liners (as some have shared above), but some of us are also not only capable of reading longer thought-pieces, but also of writing them.

    reply to this | link to this | view in thread ]

  10. identicon
    Zeroth404, Mar 24th, 2006 @ 8:07am

    I hate Yahoo. I always have.

    reply to this | link to this | view in thread ]

  11. identicon
    Michael, Mar 24th, 2006 @ 8:15pm

    Premium package? What?

    reply to this | link to this | view in thread ]

  12. identicon
    jeff, Mar 25th, 2006 @ 7:54am

    "Simply charging more for extra "features" will almost always backfire -- often driving the customers you want to your competition."

    Sounds logical on paoer, but the NYtimes premium has been extremely successful. I wish this was not true, but alas it is.

    reply to this | link to this | view in thread ]

  13. identicon
    Ricci King, Feb 28th, 2007 @ 5:58am

    trouble signing in

    I have tried for days to sign into Yahoo for my mail and can't get in..under numberous e-mail names, old and new. I can't get signed in and can't find any way to contact them for help. I've even removed the program from my computer and re-downloaded with no success. I have used them for years...guess that will change since I CAN'T SIGN In!!!! This is totally infuriating>>>>

    reply to this | link to this | view in thread ]

  14. identicon
    Bill King, Feb 19th, 2009 @ 9:04am

    Yahoo Account

    I did not know I had a Yahoo Account until I was sent a Direct Debit for same - how do I get out ASAP

    reply to this | link to this | view in thread ]

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