Commentary

Google and Yahoo! Continue to Satisfy Customers

Google and Yahoo! Continue to Satisfy Customers

Larry Freed, President and CEO of ForeSee Results, reported recently on the American Customer Satisfaction Index (ACSI) in conjunction with the University of Michigan's annual second quarter measurement of leading companies in the e-business sector. The scores represent current levels of customer satisfaction and indicate the direction and magnitude of future spending behavior.

Freed reports that the three categories of e-business covered in this quarter's ACSI do reasonably well in the aggregate with a score of 71.4 (on a 0-100 scale), an improvement of 3.9 percent from last year, but below the 73.8 national average of all industries. And, with a score 71.4, he says the e-business sector is nowhere near the standard-setting performance of its cousin e-commerce which showed its strongest showing yet with a score of 77.6 this year.

2003 2002
ACSI National Average Across Industries* 73.8 73.0
ACSI E-Business Score (including portals, search engines, and news/information sites) 71.4 68.7
ACSI E-Commerce Score (including online retail, travel, brokerage, and auction/reverse auction) 77.6 72.9

* As reported for the second quarter of the year

Google's 82 score in the search engine category tips the overall category average upward, despite scores in the 60's and 70's from other players. Google owns the search engine field, and their customer satisfaction levels are among the highest of those measured by the ACSI.

2003 2002
Search Engines 78 68
Google 82 80
All Others 74 n/m
Ask Jeeves 69 62
Alta Vista 63 61

Yahoo! is a very strong performer in the Portal category, with a 78 index, but the lead that Yahoo! used to have over its rivals, continues Freed, while still quite comfortable, is no longer as insurmountable as it has appeared in previous years.

2003 2002
Portals 70 68
All others 79 72
Yahoo! 78 76
MSN 74 72
America Online 65 59

Though two of the three categories included in the ACSI's e-business sector are characterized by very dominant players, news and information is an entirely different story, says Freed, with four of the five named companies roughly equal and the fifth only a few points behind industry leaders.

Freed notes that news and Information sites tend to be, fundamentally, relatively simple expansions of their traditional businesses. They produce the same product and deliver it in more or less the same way. They do not do much to differentiate themselves relative to their competitors or, for that matter, relative to their own "real world" selves, whether that be print or broadcast news outlets. Accordingly, there is not a lot of differentiation in customer satisfaction performance.

2003 2002
News & Information 74 73
All others 75 73
ABCNEWS.com 74 74
MSNBC.com 74 73
CNN.com 72 72
USAToday.com 72 71
NYTimes.com 7070

Source all data: ForeSee Results' research

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