Practical Ecommerce

Yahoo! May Sell Small Business Unit, Focus on Core Business

The Yahoo! small business services unit, which includes the hosted ecommerce platform used by thousands of online merchants, may soon be sold, clearing the way for Yahoo! to focus on its core businesses, according to published reports.

News that Yahoo! had garnered some interest for the unit from corporate buyers was first reported in a Reuters article on the 22nd of September, and was soon the buzz at the National Retail Federation’s Summit in Las Vegas.

“I am surprised that they would be getting out of the ecommerce space when so many other companies are trying to get in,” said a Summit attendee who believed that ecommerce was one of the brightest spots in the current recession, adding that several new companies had released shopping carts or ecommerce platforms in the past year.

According to the Reuters article, Yahoo! was asking between $350 and $500 million for the unit, but might consider a lower sale price if the divestiture was considered to be a strategic move. Yahoo! recently sold its stake in China’s for $150 million, and is reportedly also seeking to sell HotJobs and Zimbra, two other non-core units.

The Sale Is Not Confirmed

Yahoo! has not confirmed the report, and so officially the sale is only supposition. Furthermore, until any sale becomes final, it is impossible to predict how that sale might affect merchants using Yahoo!’s platform. But it is likely that some merchants will seek other platforms over concerns that the platform might change significantly.

When Network Solutions bought Monster Commerce several years ago, at least some Monster Commerce customers migrated to other ecommerce platforms.

Yahoo! At the Center of People’s Online Lives

On the same day that Reuters released its article, Yahoo! announced a new global branding campaign focused on asserting Yahoo!’s “place at the center of people’s online lives.” The campaign would focus on how Yahoo! is both simplifying and enhancing web experiences.

Sample from the new Yahoo! advertising campaign.

Sample from the new Yahoo! advertising campaign.

“Our vision is to be at the center of people’s online lives–to be at the place where their world meets the larger world,” said Elisa Steele, Yahoo! executive vice president and chief marketing officer, speaking at the IAB MIXX Conference and Expo in New York City. “Our new branding will focus on people–the power and promise of ‘you.'”

“This is much more than an advertising campaign,” added Steele. “It’s about how Yahoo! delivers its promise to the market in everything we do. Our brand strategy shows our commitment to delivering personally relevant online experiences.”

Some at the show believed that the branding campaign, along with other sales, was evidence that Yahoo! was headed in a new strategic direction.


Armando Roggio

Armando Roggio

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  1. LexiConn September 25, 2009 Reply

    Everything will hinge on the type of buyer that ultimately purchases Yahoo hosting and Yahoo stores. If it’s an equity firm looking to extract maximum profit from its new customer base, this often leads to major changes to squeeze as much profit as possible (often not a good thing for the end users).

    If an already successful ecommerce focused company swoops in, there will likely be a settling-in period where the status quo is maintained, and then slowly new features and offerings will be introduced. This is typically a good thing, but there can be some bumps along the road as two systems combine into one.

    Yahoo store owners should keep a close eye on this one, and have a backup plan for a quick and easy migration if things do not go well. This is good advice for any ecommerce owner, especially those using remotely hosted solutions such as Yahoo stores.

  2. AmeriCommerce September 25, 2009 Reply

    AmeriCommerce would be interested in aquiring the Stores portion of this business unit and would help support any clients that would need assistance rolling over to the AmeriCommerce platform in either case.

  3. Armando Roggio September 25, 2009 Reply

    @Lexiconn, good points.

  4. Rishi Rawat September 26, 2009 Reply

    This is a good thing for Yahoo!; they already have a shopping portal ( and selling Yahoo! Stores will allow them to focus on their real strength: content.

    If the sale does happen I’m confident the buyer already has a compelling strategy for retaining existing stores (why else make the purchase?).  But for the many older merchants that have stayed with Yahoo! out of habit this will give them a compelling reason to consider other alternatives.

  5. George Zlatin September 29, 2009 Reply

    I think this is most probably a good thing for Yahoo Store customers depending on who buys them of course. Yahoo hasn’t paid any serious attention to adding new features and making timely upgrades. If you remember Christmas last year, you’ll remember that Yahoo Store shopping cart servers were down on Black Monday which is one of the busiest online shopping days of the year. Also, Yahoo is behind the curve on adding new features to make it a more robust platform. Standard features on other carts like order management need to be purchased through 3rd party vendors.

  6. Ecommerce Exit Strategies September 29, 2009 Reply

    I think Yahoo is drastically under estimating the role their store front plays in keeping them relevant. It is the one service the can do better than Google if only because Google doesn’t offer it.

    I believe if the want to stay relevant the should actively grow their small business service unit. Continue to collect the monthly fees and .75% of sales from store platform users, and continue to expand services.

    It seems they are caught up trying to compete with their big brother and fail to realizing what their true strengths really are.

  7. Tony Birnseth September 29, 2009 Reply

    Yahoo has needed a serious overhaul of their store environment. The current model is wrought with compatibility issues and is probably holding them back from becoming more current and subsequently more competitive.

  8. Nate Gilmore October 5, 2009 Reply

    Yahoo seemed to be challenged with how to welcome in developers and plug-in tools that would enhance the offering.

    Shiwpire built a [Yahoo Store product fulfillment]( module that works great; but, couldn’t find a way to work with Yahoo to even put it up in a list of compatible plugin’s or partner page. Compare that to Magento or Netsuite which have embraced third party connections by developers and spent time to build an app exchange.

    The perplexing part is that Yahoo Stores has a great set of API’s and there are lots of connections to it out there. Hopefully, by breaking this unit out of Yahoo! they can focus more on the core business.

    Nice group of people over there and I wish them all the best as they go through this new challenge.