Yahoo! to Charge Fees For Personal Ads

Web portal Yahoo plans to begin charging fees for advanced features of its personal ads area, a spokesman for the firm said on Friday.

While the Sunnyvale, Calif.-based company has been offering free personal ads through its Yahoo Personals service for years, that policy will change starting on Wednesday, when the site begins requiring users to pay monthly fees if they wish to do more than examine others’ ads or post their own.

Under the new rules, users that want to actually contact someone whose ad they’ve seen must subscribe to the company’s ClubConnect service, which charges $19.99 a month.

“There are some areas of Yahoo Personals that will remain free … like browsing, search, and posting,” said Mark Hull, a senior producer in Yahoo’s community services division, which administers Yahoo Personals. “The big difference comes when you come into the site … and want to reply to somebody. At that point, you have to join ClubConnect.”

Yahoo also said it would begin charging a fee for “enhanced ads” — enabling users to purchase greater visibility for their ad by adding different colors, and through better placement in search results. When a user searches the personals, ads with the enhanced option will appear at the top of the returned listings — helping them gain better exposure, and ideally, better results.

A user pays $4.95 for the service, which buys them 45 days’ worth of enhancements. After that time, the ad will expire — as has been Yahoo’s policy for years, a strategy aimed at maintaining the listings’ “freshness.”

“It’s a totally optional thing for users to do, but it will probably get them higher responses from users, and probably a higher quality of response,” Hull said.

Despite the fees — which are the first that Yahoo’s charged for the service since it debuted four years ago, Hull said that the company has confidence that most of the service’s users will trade up to the extended services.

“We’ve done a lot of research, both competitively and user research. We asked users what they’d like to pay,” he said. Signing up for ClubConnect “is what most will want to do — they’ll search for somebody and say, ‘Yeah, that’s exactly the kind of person I want to get in touch with.'” But to spice up the offer, Yahoo will stat offering special rates — $42.95 for a three-month membership, or $89.95 for a 12-month membership — and a free month of use. Although a number of online matchmaking services already exist, Hull said Yahoo believes that people will be willing to pay the new fees, which bring it into head-on competition with subscription-based services like TicketMaster Online-CitySearch’s Match.com.

While Yahoo won’t disclose the numbers of its Personals users, Hull said the figure numbers in the millions — all of whom will be simultaneously introduced to the new fees next week. Additionally, Yahoo also expects to bring its cross-marketing abilities to bear.

“If you look at how companies spend their money in the space, we have a leading edge on generating high margins. Margins for Yahoo are going to be higher, because user acquisition costs are going to be very low … We have this massive thing called the Yahoo network, and we can market to users at extremely low costs.”

Hull said that following the Oct. 3 launch of the service, Yahoo would begin launching house ads in what he said would be a “steadily ramping-up of our marketing campaign.”

All that bodes well for the Web portal, which like many online content plays, is aiming to roll out subscription-based services to compensate for shortfalls in ad revenue. And while the personal ads sector might seem relatively unimportant, Hull said that Yahoo considers it just the opposite.

“We’ve been working on this offering for a significant amount of time now,” he added. “It’s a very deliberate effort in terms of launching and delivering the service and there are a lot of great advantages for operating in the personal space. Yahoo believes there a significant revenue opportunity there.”