Why Yahoo Is Doomed in the Face of Google, Twitter, Others

I was doing research for an article today and it suddenly hit me why Yahoo (YHOO) continues to lose traffic. Compared to Google (GOOG), Twitter -- even Facebook -- the user experience is so complicated, messy, and muddled that people are flocking away the minute they find something more palatable.

First, let's dispel any doubt. Yahoo is losing customers. This is happening over the long term, and it's not just in search. Look at the two-year progress of what are currently the top five sites listed by Alexa.com:

Pretty graphic. Only Live.com from Microsoft (MSFT) has also been losing ground. I think a big part is the user experience. To look up some corporate ticker symbols, I did as I often do and went to Yahoo Finance only to find, yet again, that I was waiting for the site to recognize that I had started to type in a company name to offer suggestions by searching on the text string it could already see. Then I tried Google Finance and got virtually instant response. I kept going back and forth between the two, and then moved over to Yahoo's main page. The company's pages make Facebook look relatively clean-cut. There are too site links, too many ads loading, too much ... everything.

It's like the old test in retailing, where companies try offering consumers varying numbers of options to buy products. Having a few choices does better than a highly limited selection, but eventually the number of possibilities grows enough that sales actually drop. Why? Because people can't keep all the options straight, can't decipher why you'd use one of the other, and eventually give up. Clearly the company has reduced some of the clutter, but it still depends on the plethora of sites, multiple display ads (and, presumably, the links back to analytic systems), fancy previews of its own sites, popping up in windows that, in turn, have some form of advertisement.

People want to be able to "do stuff," and in part that means choosing what to do and having systems respond quickly enough. Ironically, this is like the glory days of print direct response mail. Pretty design didn't sell product. Something that could easily direct consumers, from considering benefits of an offer to the order forms, was what actually worked. Perhaps the day of the über-portal is over, but the more I look at what Yahoo offers versus other sites that compete for attention, the more I see that to get something done, consumers may be going elsewhere.

Image via stock.xchng user svilen001, site standard license.