Yahoo! Puts Price Tag on Searches

Yahoo! (Nasdaq:YHOO) has announced the launch of a fee-based document searchservice in cooperation with Divine (Nasdaq:DVIN). While still offering a free searchfeature, Yahoo! apparently recognizes the earnings potential ofat least one of its specialized services.

“It’s definitely a step in the right directionfor Yahoo! as they diversify their revenue stream,” Gartner analystDenise Garcia told the E-Commerce Times.

The new pay-for-play service, dubbed PremiumDocument Search, is based on a search enginecalled Special Collection, which was developed by NorthernLight. Divine acquired the search engine through itspurchase of Northern Light Technology on Tuesday.

Nominal Charge

Special Collection is an online research library withmore than 70 million text pages from 7,100 sources,including The New York Times, Business Week, Forbes,and hundreds of trade and academic publications.

Using the new Premium Document search, consumers willbe able to conduct searches and view free summaries ofdocuments prior to purchase. Articles are pricedeither individually or on a subscription basis, whichwill give a user access to up to 50 documents forUS$4.95 per month.

Declining Revenue

The new engine is the latest in a series of efforts byYahoo! to make up for the loss of online advertisingrevenue, which has hit the company hard.

Despite reporting better-than-expectedresults in the fourth quarter, the company’s netrevenue dropped $122 million to $188.9 million. Forthe full year, Yahoo’s revenue was $717.4 million,down $392.6 million from the previous year.

Ads still accounted for 75 percent of Yahoo’s revenuein 2001, but that reflects an improvement over 2000, duringwhich the company depended on advertising for 87percent of its income.

Looking for Revenue

To lessen its reliance on marketing revenue, Yahoo!has focused on paid services over the last few months.In November, it cut a deal with Overture (Nasdaq: OVER)to place paid listings within Yahoo! search results.

In December, Yahoo! snatched HotJobs (Nasdaq:HOTJ) from under the nose of Monster.com for $436million. According to Media Metrix, HotJobs was themost-visited job board in December, with 7.5 millionunique visitors.

On January 9th, the company agreed to build a custom portal forhealthcare giant Cigna (NYSE: CI). And by the middleof this year, Yahoo! plans to launch a high-speedInternet access service with SBC Communications (NYSE:SBC).

Premium Services

Garcia said Yahoo! should and will continue to focuson new revenue streams, though she does not expectYahoo! to begin charging for its free services because”they still want to keep the number of unique usershigh.”

Instead, Garcia expects Yahoo! to incorporate newfeatures and services into its existing free productsand add a charge for the extended capabilities.

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