Bye-Bye, Yahoo!?

As I pen my last column for this publication, I find myself entertaining the previously unthinkable notion that the grandfather of the Internet is mortal and could pass away.

Hell-bent on patching huge bottom-line gaps created by the advertising downturn, Yahoo's newly installed boss, Terry Semel -- chief rescue officer, if you will -- is trying to squeeze users for cash at every turn.

Yahoo's ambush-style sales bids may sate its investors in the short term, but they could alienate so many users that the company may not live to see a life-saving advertising upswing.

Phone Bills

As a frequent Yahoo! Mail user, I can recall numerous instances in which inexplicable lapses in mailbox access have tested my patience.

Perhaps a knowledgeable customer service representative might have calmed my nerves. But would I pay US$1.99 per minute for information that probably would not even restore my mailbox access? Not a chance.

The problem, Yahoo! recently announced, is that it is testing fee-based customer service for its e-mail customers. And this is just one of many backdoor money-generating schemes unveiled by the company.

Spare Some Change?

Granted, Yahoo! has lost money for five consecutive quarters -- forfeiting a total of $92.8 million in 2001, thanks to a dismal advertising climate.

In this respect, I do not blame Semel for hunting down new revenue wellsprings.

But does he have to be so abrupt and underhanded about it?

Boorish Blitz

Take, for instance, Yahoo's new "opt-out" marketing strategy.

Gunning for a 50 to 70 percent boost in use of its premium services -- which currently bring in an average of 27 cents per user -- Yahoo! is pushing the privacy envelope with new guerrilla marketing efforts.

The company's 219 million users are now subject to promotional phone calls, e-mail and direct mail unless they take time to opt out of the sales hit list.

By giving customers the choice to opt out, Yahoo! has managed to dodge reprimands from privacy policy makers like TrustE.

I suspect that it will not be so lucky with disgruntled customers.

Sales Matters

During Semel's tenure, Yahoo! has tacked on fees for such services as classified ad posting, forwarding e-mail to an outside account, online games, e-mail storage space, and some features of its GeoCities Web page builder.

In December, when the company introduced fees for its online payment service, PayDirect, I knew it would not be Yahoo's last free-to-fee transition.

PayDirect charges -- 2.5 percent of the transaction amount plus 30 cents -- drew fire from many loyal users, which will intensify with each new fee levied.

A December online forum posting read: "Bye-bye, Yahoo! I refuse to pay a dime for any of these free services that they've now decided to charge for! That is a greedy bait-and-switch."

Missed Opportunity?

If Yahoo! executives could have predicted this moment two years ago, when they were holding merger talks with eBay (Nasdaq: EBAY) , perhaps they would have worked harder to channel non-advertising-based revenue.

But you know what they say about hindsight.

The company's feverish attempts to make up for lost time and money may be one more indication that the all-for-free and free-for-all days of the Internet are indeed coming to an end.

Will Yahoo! go the way of Boo.com, Webvan and Pets.com? Probably not. But it may endure some grave setbacks before it strikes the best balance between altruistic community building and profitability mandates.