But the social network’s advertising revenue grew 18.4% during the quarter.
Widely anticipated as the kick-off to the online holiday shopping season, the Monday after Thanksgiving was a big disappointment to thousands of retailers when the shopping carts failed to function on their Yahoo Store e-commerce platforms. Yahoo has since upgraded its infrastructure and offered to waive November transaction fees.
The Monday after Thanksgiving 2007 arrived as usual with high expectations among e-retailers of a busy kick-off to online holiday sales, but for OneWayFurniture.com and most of the more than 40,000 other merchants on the Yahoo Merchant Solutions e-commerce platform, the day was a disappointment. Database servers for the platform, also known as Yahoo Store, couldn’t display contents in shopping carts during the day’s peak traffic load, preventing shoppers from completing their intended purchases for several hours.
“After weeks of preparing for ‘Cyber Monday,’ one of the busiest shopping days of the season, we were very excited to start the day,” says Mitchell Lieberman, CEO of OneWayFurniture.com in Farmingdale, N.Y. “But I woke up to a horrible scenario for online shoppers. The shopping carts where visitors pay for their orders were down completely.”
Kevin Hickey, vice president of marketing at New Stanton, Pa.-based OnlineStores.com, which operates several sites on the Yahoo Store platform including EnglishTeaStore.com and United-States-Flag.com, says his company lost about $35,000 in expected sales on Nov. 26 as it was able to take in only 20% of its usual volume on the phone and in sporadic online orders.
At Y Store Forums, a networking web site for Yahoo Store operators at newforums.ystoretools.com, several Yahoo Store retailers posted comments about the outage. One posting, titled “Customers cannot checkout,” was viewed more than 12,500 times.
“We’re disappointed that Yahoo wasn’t up to its normal level of reliability,” Hickey says. “It spurred us into looking into alternate platforms and to have a redundant back-up system for taking orders.”
Yahoo responded during the ensuing days with a mixture of technical and customer relations moves. It apologized for the impact the service interruption had on its retailers’ business and said it would waive its November 2007 sales transaction fees. Yahoo charges per-transaction fees of 0.75% or 1% of sales, plus a monthly fee of either $99.95 or $299.95, based on sales volume.
It also continued to make improvements to its infrastructure, including additional hardware and system maintenance. “We are continuing to make improvements to our systems,” Rich Riley, senior vice president of Yahoo’s Online Channel Division, said in a Dec. 1 posting on Yahoo’s YStoreblog.com.
Retailers on the Yahoo platform say they were able to at least partially make up for lost sales through increased activity following the Nov. 26 outage and, for now, are hoping Yahoo will stick to its reputation for reliable service.
“We are pleased with their diligence in attacking the problem,” Lieberman says. “While we were disappointed about the outage, Yahoo has made some hardware additions to prevent this from happening again. In six years on the Yahoo platform, we have had one or two outages. That record is hard to beat.”