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Yahoo Can't Cope with Cyber Monday

Monday, 26 Nov 2007 | 4:38 PM ET
Yahoo
CNBC.com
Yahoo

News doesn't get worse than this for a company like Yahoo. On a day that's arguably one of the most important for online shoppers during the holiday shopping season, the so-called "Cyber Monday," Yahoo's shopping and transaction algorithm appears to be down.

For a company that hosts three million small and medium online businesses, this is a problem that could send sizeable ripples through the online economy.

I spoke with Yahoo just minutes ago, and the company confirms the outages, telling me they are due to "heavy holiday traffic" and the company is "investigating" the problem. I have noticed that the original warning on the Yahoo Merchant website was updated at 11:54 am PST, saying the company is continuing to investigate the problem. We do not have a clear idea just how wide a problem this is since Yahoo is providing no details on the scope of the outage.

Merchants I have spoken to say they noticed a problem with transaction completion beginning at 6 am PST today. At 8:31am, Yahoo posted the first message on its Merchant Solutions website: "Some merchants are reporting that shoppers are receiving an error message indicating 'system unavailable' during the checkout process. We are aware of this issue and are currently investigating. More information will be provided as it becomes available."

John DiFrenna runs sandboxcouture.com, one of the Web's top destinations for online baby clothes. Go to Google and type in "baby clothes" and his site is the first one listed. He called me today to tell me that not a single transaction was completed since 6 am today, going through Yahoo Shopping.

He's trying to get answers from the company, but hasn't gotten anything useful yet. He says transactions going through Amazon have experienced no problems. But Yahoo accounts for 60% of his business, and he typically does "tens of thousands of page views a day."

Breaking News: Yahoo
Yahoo small business servers are down, reports CNBC's Jim Goldman.


Amazon carries his complete line of products, so if you're interested, you may want to head there instead. And that's the kind of thing, if it happens a lot, could be a serious problem for Yahoo, if the scope of this issue widens.

DiFrenna tells me: "It's very frustrating. It starts with your investment in marketing the month prior to the holiday shopping season as well as how you schedule your inventory position."

He tells me they did market research after last year's Cyber Monday and discovered that visitors between Sunday and Tuesday after Thanksgiving typically return three times during the holiday shopping season. "So if their first experience is they can't access our site, they're not coming back. What's the residual impact?"

He also tells me the error message shoppers get from Yahoo fails to indicate that the problem is Yahoo's, rather than the site's. "They're just thinking when it doesn't work, we don't have our act together."

Search engine optimization consultant Catherine Seven runs seowhat.com and says she works with 22 clients who use Yahoo Shopping: None she's spoken to today have had any transactions processed. She's sending notes out to all her clients warning them that there is an issue.

"Since 6 o'clock this morning, we've all basically been holding hands," she says, in a mild state of panic. "For all these mom-and-pop shops, this is what they wait for so they can buy their kids Christmas presents."

Consumers can search these websites, but page refresh is unusually slow no matter the connection; they can add products to their shopping carts. But when it comes time to complete the transaction and pay for the items, the site freezes, they get an error message or their data is lost and they have to start again.

We of course will continue to follow this story and see where it goes -- and like those merchants, await any details from Yahoo as to how big this problem really is, what went wrong, and when it might be solved.

You'd like to think the company would have anticipated "heavy holiday traffic" and could have kept its merchants up and running.

Questions? Comments? TechCheck@cnbc.com

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