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Wednesday, August 3, 2011

Writing for Dummies by Cheapies

This posting is not so much about the typical economics and finance related topics which affect the US and world at large.  Rather it is about something more symbolic of a greater problem.

Have you ever needed to have your leaves blown or collected into bags during the autumn, or your driveway shoveled during the winter after a snowfall?  And instead of hiring a professional lawn service or snow plow service, instead you offer some neighborhood kids a couple dollars and some hot cocoa to do the work instead?

If so, you will probably think nothing wrong then with the following..

It seems Yahoo! is too cheap to hire real journalists with actual experience to write news stories to which Yahoo! would possess exclusive domain over.  So instead of paying talented, skilled professional writers with journalism degrees, real living wages to provide the written material to place their advertisements around on the webpage, Yahoo started a 'Contributor Network' about a year ago.

And through this 'network', people from all walks of life could write whatever they wanted and it would be posted as long as it didn't offend or break Yahoo! guidelines.  Didn't matter if they were opinion pieces disguised as 'news' or if facts were inaccurate or inadequately checked.  And ultimately who would know or care if the material was plagiarized in part of whole, as long as it drew viewers in to look and click at the ads.
The enticement or dangling carrot was people would make money for writing... OOhh.. and they could be 'stars' because millions of people would see their articles via the entire Yahoo! news apparatus, and wouldn't that be Exciting, kids!

The way it works is you click on their 'Assignment Desk' link, choose a topic, and agree to write the article- then you will get paid usually between $2-$25 for it (though Yahoo gives a nice 'teaser' of $100 for some articles but never specifies what counts as a $100 article)  If you submit articles on your own and not via their 'Assignment Desk', then you will receive somewhere between $2-$15 for it.

Now let's stop here a moment.  Say you write an article on the debt ceiling- it takes you two hours to write it and research properly, proofread & edit, etc. before final submittal and Yahoo! gives you $10,  you feel happy right?  Well you shouldn't.   First that $10 comes to $5 per hour spent writing, reviewing and such.   The legal minimum wage in the US is $7.25/hr so you were underpaid by $2.25 per hour.

Second, you basically allowed Yahoo to have near free content while they eliminated a professional writer who would have made at least $20/hr to write something much more informative than that of an average joe.  You allowed Yahoo to undercut someone who's aspiration it was to write for a living by doing the work for 75% less.

Third, Yahoo only pays in $100 increments and automatically takes out 30% taxes before you receive your check.  That means in order to get paid, you really need to be writing 10 articles for Yahoo based on the $10 per article example.  It also means after taxes, your time and energy amounted to $5.08/hr.  And if you article was given a $2 consideration, then you best be ready to write 49 more articles before you ever see your first check.

Now Yahoo also offers something called Performance Payments where you get extra money based on the amount of traffic that click on your article.  Sounds exciting, huh?  Well the average payment per 1000 viewers is between $1.10- $1.15 though some do pay a whopping $1.50 per 1000 people.  Now you wouldn't get any $ if say only 950 people looked at your article, but just using simple math it means each reader is worth 1/10th of 1 cent to Yahoo! Obviously they take in greater revenue than that based on the ads surrounding the copy.

Now let's bring the topic forward and relate it to the broader US & global economy:  Everything in business is about bottom-line and maximizing profits.  If Yahoo! could have gotten monkeys to write articles  and used bananas as payment, they would have. Same thing with business in every industry- why pay an educated person X per hour when it may be more cost effective to hire someone with less knowledge at a fraction of the cost.  Better yet, just partially or completely outsource the jobs where wages are extremely low but for those in 3rd world nations receiving $2/day, its still much more than they used to earn so they're appreciative of it.

A year prior to the bankruptcy and liquidation of the electronics store Circuit City, the management came up with a brilliant plan.  All those employees hired in all the stores who were technically proficient in HDTV, computers and such who were making $9.75/hr...  lets just Fire them All.  And in place, let's hire novices who won't know very much but we at Circuit City can pay them $7.75/hr and that will save us a lot of $$.

So what happened?  A complete, total failure that helped speed up their decline.  People were frustrated they couldn't get their questions answered by people who knew what they were saying, or stores would be thinly staffed so there was no one to find to ask anything.  So people went to BestBuy for their expensive high-end equipment and Circuit City lost even more money.

Yahoo! like Circuit City and so many other companies tend to think cheap.  It is this kind of narrow minded thinking which is why Yahoo! is a shell of what it once was just 10 years ago. As of the close of the trading day Tuesday, Yahoo! is trading at $12.84 per share.  Its competitor Google is at $592.40 per share.  Google doesn't do things on the cheap.  Yahoo! does.. and they're paying for it.

Everything we write here at "Ants & Grasshoppers" is free.  We don't collect bread scrap financial 'tokens' from a corporate owner who directs or dictates what we write or how we express.  And we don't put ads on the page or charge people to read.  We don't seek our readers to buy anything or vote a certain way or do any specific action other than to spread the word of A&G to others as we continuously work hard to inform you of the reality of things without agenda.

We do what we do because we care about not only the US but the global economy as a whole; we care how it affects other nations- England, Ireland, France, Germany, Greece, Italy, Spain, Portugal, Russia, Japan, on and on... And in a small way, we at A&G know we are making a difference.

Over 20,000 of you visit each day.. we're appreciative.  We hope you continue visiting and letting others know of us.  Your word of mouth is the Only advertisement we use & the Only one we value.

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