Yahoo adds e-commerce to Web hosting

The Web portal ramps up its efforts to woo mom-and-pop outlets, adding e-commerce functions such as online payment processing to its small-business product.

Jim Hu Staff Writer, CNET News.com
Jim Hu
covers home broadband services and the Net's portal giants.
Jim Hu
2 min read
Yahoo on Tuesday added a package of e-commerce functions to its small-business product, heightening the Web portal's efforts to woo mom-and-pop outlets looking for an online presence.

Called Yahoo Merchant Solutions, the service offers features such as online payment processing, shopping carts and catalog management. These functions will be bundled into its existing Web hosting business, which offers Web site storage, publishing tools and domain name registration.

The continued growth of Yahoo's small-business products highlights the company's attempts to sell services directly to companies with fewer than 100 people. For years, Yahoo has offered Web hosting on a smaller scale through its GeoCities Web publishing service. Yahoo also has latched onto Web hosting as another way to bring in non-advertising revenue.

"This is one of the big pieces that we've put in place," said Rich Riley, vice president at Yahoo.

Although Yahoo has not disclosed any financial figures for its small-business division, Riley said the unit has "hundreds of thousands" of paid customers.

The small-business packages will be sold at different price levels. The introductory "starter" package costs $39.95 a month with a $50 set-up fee and a 1.5 percent charge for every sale. The package includes its new e-commerce features, domain name registration, 35 business e-mail accounts, 350MB of site storage, 35GB of data transfer per month, design tools, credit card processing, and 24-hour phone support.

The "standard" tier costs $99.95 a month with a $50 set-up fee and a 1 percent cut for each transaction. The package includes everything in the starter pack with the addition of more advanced merchandising, scripting and marketing tools. Finally, Yahoo's high-end "professional" tier costs $299.95 with a $50 set-up fee and a 0.75 percent transaction charge. It includes everything in the standard package with the addition of priority customer service and support for high-volume sales.

Yahoo executives have earmarked selling services to small businesses as a priority for the company. Its pending $1.63 billion acquisition of paid search engine Overture Services was largely viewed as a way to tap revenue from small businesses looking to increase their Web presence. Overture lets businesses bid for placement on its search results. Businesses then pay Overture a fee every time Web visitors click on links hosted on Overture's search pages.

Yahoo's Riley said the company will eventually embed Overture's link bidding system for its small-business customers, assuming the acquisition closes.

Overture has a deal to host its search results on Yahoo's Web search page and shares its per-click revenue with the portal. The deal has paid off for Yahoo; Overture provides 20 percent of Yahoo's quarterly revenue.