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UKFast Websight - November 2008
Dear Newsletter Subscriber
Welcome to November's Websight. This month we look at Yahoo's tribulations, why Hulu is matching YouTube in revenues and how the supermarkets are gearing up to battle for the online Christmas shopper.
And as usual we have more helpful tips on making the most of your UKFast solution.
November has proved to be a very eventful month in the hosting and internet business world. Not least for Yahoo, who it seems has hardly been out of the news over the past four weeks.
Unfortunately for the Internet giant none of the news was positive. Yahoo was stung at the beginning of the month by Google's decision to pull out of their major advertising deal. The agreement for Google to sell advertising on some parts of Yahoo's search engine listings would have been worth a reported $800m, a crucial sum for the faltering Yahoo. However, US authorities wanted to investigate the details of the business tie-up on the grounds of antitrust issues and Google decided that it didn't have the stomach for the fight.
The Google withdrawal proved to be the catalyst for a run of bad news for embattled Yahoo. The latter had fended off takeover interest earlier in the year from Microsoft because of the promise of Google fund. But when the collapse of the deal left Yahoo courting the Seattle-based software titan there was no interest to be found.
This in turn angered many Yahoo investors who were in favour of the Microsoft deal from the start and who had questioned the leadership of company CEO Jerry Yang. So, not surprisingly the breakdown of the Google partnership left Yang in a corner, with no choice but to resign after overseeing the decimation of Yahoo's share price down to $10 a share.
The other central theme of November's news has been outsourcing. Research in the UK has found that British-based firms are increasingly choosing to turn over their data centre requirements to specialist providers. The survey found that companies were turning to the increased security, efficiency and cost-effectiveness of specialist providers as a remedy to the current economic troubles.
In other news, US spam traffic was said to be down by a sensational 75% in the middle of the month after just one web hosting firm was shut down. On November 14th ISP McColo Corp. was taken down because it was reportedly being investigated for involvement in suspicious activities. By the next day internet spam watchers were reporting that spam activity had dropped between an amazing 65% and 75%.
The development is seen by many web users as a welcome victory over the scourge of spamming but probably none were surprised to see the vacuum quickly filled. It seems that as long as there is an internet there will be spam companies clogging our inboxes.
Plan for Christmas
Online business is set to reach record levels in the run up to this Christmas. Are you prepared to make the most of it?
To ensure that your website is working at peak efficiency during the coming weeks of high demand you need to have expert monitoring in place 24/7. UKFast has the available resources to help clients cope with seasonal demand and to deploy additional services to facilitate growth.
Dedicated bandwidth, CTmonitoring (software designed in-house which allows you to set limits and track every aspect of your dedicated server from bandwidth consumption to disk utilisation) and one to one capacity planning consultations ensures our clients are not caught short.
To find out more take a look at our website.
Targeting your online ads is vital
This month it was revealed that YouTube rival Hulu was rapidly catching it in terms of revenue despite only having a fraction of the number of unique visitors. According to reports, Hulu is expected to make $180m in advertising revenue next year, putting it roughly on a par with YouTube despite having just 6m users compared to YouTube's 83m. The figures are a good indication that outright popularity does not necessarily translate to strong advertising income and that quality and relevance are of key importance.
YouTube was not originally designed to be a money making exercise and now owner Google is struggling to maximise profitability despite the huge popularity of the site with users. Obviously the problem is not exposure or even brand familiarity. It is content. Many ad agencies don't want to place their adverts on YouTube's 'limited' video content. Instead they prefer the 'full length' offerings on News Corporation and NBC Universal backed Hulu.
What the ad people have learnt is that online advertising content needs to be in tune with the sensibilities of the potential audience or it will fail to make an impression. Clearly many marketeers feel that YouTube's audience does not respond to overt advertising and so it is better to spend their money elsewhere. This is a problem that Google needs to overcome and is trying to overcome by securing deals to show more complete programming. But at the moment Hulu seems to have the edge with advertisers.
The beauty of the internet is that ads can be targeted at specific audiences (something traditional advertising formats would love to be able to do) so don't waste the potential of your online ads. Make sure that you place your ads on websites that will offer a responsive user base. That way you can be confident of a strong return of interest.
Retail - Supermarkets
As the Christmas shopping season starts to gear up in earnest we thought that it would be interesting to put the retail sector in the spotlight. After some initial investigates we decided to focus on the work the supermarkets are doing to capture the festive pound.
It will not come as a surprise that Tesco is well ahead in terms of online visitors. In fact, the supermarket king has more than double the number of visitors on average than its closest internet rival Asda. Sainsbury and Morrison's trail in third and fourth spots.
While all four boast impressive sites that clearly have benefitted from significant investment, user analysis shows that Tesco and Adsa do a far better job of retaining traffic. This is undoubtedly partly due to the fact that the 'big two' offer a much larger product base but crucially it is also down to excellent branding and website design.
For example, of the top 17 websites that web users go to immediately after the Tesco.com site, 15 are Tesco sub sites. This equates to around 80% of traffic. So in other words, Tesco is retaining 80% of visitor traffic on its sites through strong branding, product offering and website strategy.
Similarly, Asda has succeeded in locking out the top 11 places for its sub sites. So the 11 most popular sites that users go to from the Asda home site are also Asda sites. This represents excellent user capture. The only negative for Asda is that Tesco ranks 12th on the list of sites visited from the Asda home site. In comparison, Asda ranks as only the 25th most popular destination from Tesco.com.
Meanwhile, and worryingly for Sainsbury, Tesco.com is the fifth most popular destination after the Sainsbury home site, taking a massive 2.48% of traffic.
So what lessons can be learnt from the example of Tesco and Asda? First of all, having a strong overall brand is not enough. Online businesses must work hard to build a strong online brand as well. Make your customers aware that they can do business with you on the internet and similarly make sure that potential future customers know that you are on the web.
Second, create an effective website. Your website is your online shop, so it needs to immediately grab the attention, while also crucially being functional. Online shoppers are impatient, they do not want to have to search for information. So set your website out in a sensible and logical way using graphics that enhance usability rather than clutter the page. Remember; make navigating your website as easy as possible.
Finally, strive to make your visitors a captive audience. Building sub sections and sub sites allows you to offer even more focused and detailed content, while also providing a second tier of navigation to persuade visitors to continue to browse your domains.
Until next month enjoy the festive holiday season.
Best Wishes,
Communications Team
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