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Yahoo's Cyber Morning After: A Case Of Merchant's Wrath

Tuesday, 27 Nov 2007 | 1:37 PM ET
Yahoo
CNBC.com
Yahoo

Yahoo ! better break out the hammers and nails. There's a lot of fence-mending the company needs to do.

The day after the so-called Cyber Monday where online merchants usher in their own holiday shopping seasons, thousands of them are trying to get answers from Yahoo! about a payment system outage that left their online cash registers closed.

Yahoo's shopping check-out service buckled under what the company called "heavy holiday traffic," preventing as many as half of Yahoo's 40,000 online merchant customers from processing any transactions--for more than 11 hours! Yahoo seems to have everything back on line this morning, but the damage may already be done as far as partner relationships are concerned. No explanations and no assurances that this won't happen again.

And as you might expect, I've gotten a lot emails from those of you watching customers pass by, shop, and want to buy, but couldn't because of the company's technical glitches.

John DiFrenna of www.sandboxcouture.com, who originally tipped me to this (thanks John!) writes: "It’s unreal that there was not appropriate preparation done to head off this type of major issue. A logical person could assume a temporary glitch or two based on traffic and transactions, and that is fine, but now we are talking about 8+ hours of prime down time."

Howard Faber owns www.sportsk.com, sporting excellent customer ratings and has been a 5-star Yahoo store since day one ten years ago. He tells me, "In 10 years every holiday season Yahoo has an issue keeping up." He says Yahoo's claims of a "traffic issue" are probably not true. Since his site, and other legacy stores switched back to the "old" Checkout" shopping cart algorithm, he had 100% uptime and good order flow. If true, that could mean we haven't seen the last of this problem.

Yahoo's Tech Problems
Yahoo has confirmed that some kind of glitch has crashed its Merchant Solutions payment system, reports CNBC's Jim Goldman.

Mark Lininger has spent the last several years laying the groundwork for his new online business, www.foodscholar.com , finally opened this month. "I was very disheartened to get a call from a customer today telling me my site was not functioning properly on what is thought of as the busiest cyber shopping day of the year. To me, the most disappointing part of this experience is that Yahoo did not even contact me regarding this problem via email." I'm hearing that one a lot.

Marianne Cursetjee runs www.discoverthis.com, and eight other stores on the Yahoo platform. She's been tracking problems in November since 2004. She sums this up this way: "We are a growing company on the Inc5000 list of fastest growing companies and having a hosting provider who cannot keep our stores online during the peak shopping time of the year is unacceptable. Yahoo has never offered any explanation other than vague 'technical glitches' and in this business environment where customers are expecting peak performance, my business and reputation suffers as a result of a hosting company who can't manage to keep servers going. While we may be a 'small merchant,' this business is a very large part of our lives and outages affect us by creating inventory problems, customer service problems and reputation/credibility problems....We will be investigating alternative hosting products."

Greg Tice has seven stores on the Yahoo platform and tells me had an absolutely "dismal day" yesterday. He sells fireplace screens and accessories (www.fireplacescreensetc.com) and tells me: "This type of problem is the exact reason we moved to Y! Stores over 7 years ago after having experienced an ongoing performance problem at one of their competitors. Maybe it is time to move our stores again."

Tom DaPrato owns six separate Yahoo stores, and all were down yesterday. "What a complete disaster," he says. "When we selected Yahoo those 5 long years ago, one of the deciding factors was that they were 'Yahoo.' A company with enough resources to insure an outage like this would never happen. All of a sudden, the bedrock of our company has been replaced with quicksand. I guess its time to diversify our merchant platform."

Neil Kugelman owns www.goldspeed.com, what he says is the largest discount ecommerce jeweler. He was aghast, but thankful his 800 number was plastered all over the place so shoppers had an alternative.

Thank you all for writing in. That was just a small taste. I hope our coverage helped spur the issue along; I hope you're back up and running today; and I hope your customers give you a second chance today; and I hope brisk sales these next few weeks make up for the lost business yesterday.

Questions? Comments? TechCheck@cnbc.com

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