Why is Yahoo boosting domain fees by 30%?

Renewal price rises.

Like many people, I "own" a few personal domains for my blogs and a few old business ideas that never got off the ground. And, like many people, they have been parked at Yahoo Small Business, partially because I already had a Yahoo account when I registered them a few years ago, and partially because I was lured by the US$1.99/year offers for new domains that they had running at the time. The rate increased to $9.95 after the first year, but I was OK with that. I was able to reserve the domains and set up redirects to my blogs, and have the option of building real sites if I ever get too frustrated with Google's Blogger service.

Now I find out in an email from Yahoo that the annual domain "renewal price" has increased by 30%, to $12.95 year.

Mind you, this isn't for new domains. It's only for existing ones, owned by loyal customers like me. If you look on the Yahoo Small Business site, there isn't any mention of the price being jacked up by 30%, and why should this be listed? That would only scare people away!

There was no explanation for the increase in the email I received or on the company website, so let's examine some possible reasons.

It's certainly not because it takes more work to renew the domains or send out the email notifications. Like eBay and other large Internet companies, Yahoo automates many of its services, and keeps customer service staff to a bare minimum

What are some other potential reasons? Consider the effective date of the price increase: March 11, 2008. As you may recall, this was when the company was in a tight spot. It was just one month after Yahoo announced a "lavish" employee retention and severance program in the wake of Microsoft's bid for the company, and about six weeks before it attempted to justify various salary increases and bonuses for senior executives, including President Sue Decker's $1.1 million bonus for 2007.

But I don't think these added costs are the direct reasons for the domain price increase. A primary source of Yahoo's profit is advertising, and while revenue increased in the first quarter, the company said it experienced weakness in sectors such as finance, travel and retail. If this weakness persists throughout the year -- a possible scenario, considering all of the negative economic news we've been hearing, and the rapid increase in online advertising inventory from social networks and other sites -- Yahoo will have to depend more on non-advertising income. I don't know if the new pricing scheme will really boost Yahoo's bottom line, but pissing off its domain customers is a small price to pay to help offset any dip in advertising.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Ian Lamont

The Industry Standard
Show Comments

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Cate Bacon

Aruba Instant On AP11D

The strength of the Aruba Instant On AP11D is that the design and feature set support the modern, flexible, and mobile way of working.

Dr Prabigya Shiwakoti

Aruba Instant On AP11D

Aruba backs the AP11D up with a two-year warranty and 24/7 phone support.

Tom Pope

Dynabook Portégé X30L-G

Ultimately this laptop has achieved everything I would hope for in a laptop for work, while fitting that into a form factor and weight that is remarkable.

Tom Sellers


This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang


It really doesn’t get more “gaming laptop” than this.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?