Online storage providers shutting down operations!

In what is seen as desperate move to trim portfolio and cut costs, AoL and now Yahoo are shutting down their online storage applications. Consider this:

Yahoo Briefcase was Yahoo's 10 year old online storage program. However, it never gained as much traction as Yahoo mail, messenger or Flickr. Within days of taking over, Yahoo CEO Carol Bartz has issued a March 30 Deadline to take Yahoo Briefcase out. More pay offs, Pay cuts and salary freezes are expected from Yahoo on the employee account as well.

Aol XDrive will see the "sunset" according to its EVP, Kevin Conroy. Quoting Conroy, "consumer storage products haven’t gained sufficient traction in the marketplace or the monetization levels necessary to offset the high cost of their operation..". Interestingly while Flickr is Yahoo's blue eyed baby, the same service from AOL, AOL pictures will be facing closure!

Analysts cite following reasons behind the "curtains down" on these free online storage applications:

1. The revenue from online advertising will not sustain the storage businesses on a stand alone basis. Thus these services are considered to be a drag on the P&L accounts of the company.

2. The cost of maintaining several backups of server files is the reason for these companies to reel under such severe pain.

3. Increased competition from MSN Sky drive and new age sites ziddu, megaupload, 4 shared!

4. People are accessing online storage sites through variety of softwares thus the decline in page views is further putting pressure on advertising dollars

5. Legal cost of suits because of illegal activities and misuse by members!

The implication for consumers is that next time you have to choose a storage site, please look for a reliable one else you would be shuffling around site to site as one after another storage sites shut down!

The cost of Online Ads in terms of consumer experience and satisfaction

http://www.watblog.com/2009/02/05/would-you-wait-for-a-website-to-load-for-more-than-4-seconds/#comment-14833
Eklavya Bhattacharya, Portal head, Contest2win.com has a point regarding speed, user experience and satisfaction in the web world!

Google ran an experiment where they increased the number of search results to thirty per page. Traffic and revenue from Google searchers in the experimental group dropped by 20%.
Why did that happen? Didn’t users want more?
Well Google found an uncontrolled variable.The page with 10 results took 0.4 seconds to generate. The page with 30 results took 0.9 seconds.
Half a second delay caused a 20% drop in traffic. Half a second delay killed user satisfaction.

Amazon.com had a similar experience…They tried delaying the page in increments of 100 milliseconds and found that even very small delays would result in substantial and costly drops in revenue.

A recent report comparing the service efficacies between Search Engines, Goolge, Yahoo and MSN. The result was that Google is as a favourite by many users because of its simplicity of the pristine front end. Its simple, easy to understand and use, intuitive and “light”. It gives the feeling of simplicity and earnestness. MSN and Yahoo have a lot of other elements and frames in the page, which make them slower and don’t give them the pristine feeling! Thus a single frame, pure white search page with only a few other pointers in Google outscores the heavily loaded MSN and Yahoo search engines many times over. That Google has made an internet empire out of serving the needs of consumers by email service, unlimited data and photo store, blogs and adwords is another thing altogether different.

Point i try to make here is, banners and pull page pop ups and peeling ads on the page may be a great "eyeball catching" places which gets the mothersite ad revenues. However, it is equally important, that the ad revenue lure doesnot reduce the customer experience in terms of page loading time, graphics, distorting the view and obstructing information on the page of the original website. These seriously hamper the customer experience! While older users may still decide to stick through because theyhave lot to loose not coming to the website, new comers may not take such a favourable view of the website. Thus one has to balance/ tarde off these aspects in online advertising with consumer experience.