Yahoo's $1.99 WatchList Is Brilliant, It's About Building A Loyal User Base

This morning Yahoo released those inactive usernames to people who were the first to put them on their WishList.   In addition to the release of the inactive usernames, the company announced that users who did not receive an email with the option to activate a username on their WishList now have the choice to stalk them (up to five) for $1.99.  For those of you who are trashing the idea of Yahoo charging $1.99 for the ability to track up to five usernames for three years, let me be the first to say, you are completely missing the point here.

In an article on TechCrunch, Sarah Perez wrote, “But Yahoo is misguided (or incredibly optimistic) if it thinks a Yahoo ID is something that’s actually worth paying for at this point in time.”

That is the entirely wrong way to look at it.  If someone pays for something, they are much more likely to use it.  After all, you want to get some kind of value out of something you are paying for, right?  If Yahoo made the WatchList free, anyone and everyone would be jumping to add usernames to their WatchList and there’s essentially no guarantee they would ever use it.  It would be purely for vanity purposes.

Now by charging a measly $1.99 you increase the odds that the people who do pay to put usernames on a WatchList will actually end up using the username they secure (if they are able to).  You think Yahoo expects to make boatloads of revenue from a one-time $1.99 fee?  Of course not, this is about building long-term, loyal Yahoo users.

The whole idea here is that Yahoo is looking to build a base of loyal users.  Releasing the usernames was step one.  If people are happy with the username they have, they are more likely to use it.  Now, if you’re willing to pay for the shot to get your hands on a username, there’s even more of a chance you’ll end up using it.

Marissa Mayer is smart, this isn’t some cheap ploy to generate quick revenue, it’s a well-executed plan to generate long lasting revenue.  That being said, I wish Yahoo provided some more information with regard to the usernames you add (or plan to add) to your WatchList.  By that I mean it would be nice to know the last time someone logged into that account or at least the likelihood you have at securing that username before plunking down that $1.99.