Yahoo screams into Web hosting

Yahoo Australia and New Zealand have launched Yahoo! Store, a Web site authoring tool and hosting service aimed at small business customers.

The service has been available for more than 12 months in the US, with over 12,000 merchants using the service, and will start in the Pacific from as low as $30 per month. Customers are able to build a store to be hosted on Yahoo's servers using an ordinary browser and a simple point-and-click interface.

As yet another large media organisation moves in on the SME-hosting market, Yahoo Australia's product director Alan Jones said it is time for small Web development houses to accept the cheaper alternatives and to partner the larger players in the provision of additional services.

"We are focusing on a channel strategy and looking for partners to offer the Yahoo Store service, and we will give significant discounts the reseller can pocket," he said. "These partners could be anyone from service providers, PC resellers with services arms, systems integrators, Web design houses or even advertising and PR agencies."

Jones said the Web design industry is suffering from low margins, as clients become smarter about what options are available.

"If you're a Spike or a Zivo, you can charge a premium based on intangible creative services on the merit of being Spike or Zivo," he said. "But for the rest of the industry, a lot of fees get soaked up in fixed costs such as bandwidth, hosting costs and salaries.

"What these businesses have to look at is the relationship with the customer. The value lies not in the technical development, but the management of the relationship. They should reposition themselves into providing services like maintaining the on-line catalogues and marketing the site."

The Yahoo Store offering starts at $30 for a store with under 1000 products, and a Yahoo domain name ( It is $50 a month for more than 1000 products, and another $30 a month for every additional 1000 products on offer. For an additional $20 a month, or 3 per cent of transactions passed through the store, customers can be included in Yahoo's shopping section.

Yahoo is also offering customers their own domain name ( etc.) through NetRegistry for $137.50 for two years. All transactions made through the stores are secured with SSL encryption, and Yahoo provides clients and partners with the same site reporting tools it already uses for its Yahoo Shopping customers.

Jones said the sites are customisable to ensure they retain the look and feel of the company, pointing at existing Yahoo Shopping sites as examples of maintaining brand identity.

"The proof is in the pudding," he said. " You can give it the look and feel of the retail outlet."

Jones said the offering would be profitable for Yahoo Australia and New Zealand from day one. "We are leveraging technology already developed by our parent company so there is very little incremental costs to adding Australian customers," he said.

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