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Yahoo Joins Digital Coupon Craze

Yahoo just launched Yahoo Deals, a Web site that provides daily deals, online coupons, grocery coupons, local coupons, store circulars and exclusive promotions. The site also contains social and community features as well as money-saving video content.

Penny-pinching is on the rise as shoppers ride out the recession and Yahoo (NASDAQ: YHOO) says it wants to capitalize on the trend as an increasing number of people are turning to the Web giant for cost-cutting tips and tricks.

Web searches for "printable coupons" on Yahoo are up 50 percent in 2009, compared to the same time in 2008, and up 135 percent compared to 2007, according to Yahoo. The company says the most popular coupon-related Web searches in the past month have been for pizza restaurants, major retailers and grocery coupons.

"Frugality is the new 'cool,'" Greg Hintz, head of Yahoo Shopping, said in a statement. "We now know that couponing and bargain hunting are losing their stigma and are now a regular habit for many people. Our goal at Yahoo is to be the center of people's online lives and we're making Yahoo the easiest place for consumers to find and manage the coupons and deals that are relevant to their lives."

The news comes at a time when Web coupon sites saw strong growth for the month of May, signaling a trend being fueled both by the recession as well as by the "modern" digital coupon demographic -- those who do not subscribe to newspapers or clip physical coupons who turn to the Internet for the convenience and vast selection enabled by the online platform.

In a recent Yahoo survey, 43 percent of participants said they are using coupons more since last year. They also cited that easier access to coupons would motivate them to use coupons more often, a sentiment stated by 76 percent of women in the survey.

That said, the majority of people polled by Yahoo feel that there are not currently enough coupons for things they want to buy and nearly half actually think coupon hunting is a chore. Less than a fifth of consumers have a "go-to" online site and almost 80 percent think the process of finding coupons is difficult.

Bringing social networks into the mix

Yahoo is trying to change that with the Deals site, which lets bargain hunters search by zip code, for instance, for low-priced gas, and includes social media tools that let shoppers share deals with friends through e-mail and social networking sites. A community forum allows users to post or read comments on deals and discounts. Yahoo Deals also provides a Twitter feed that churns out deals in real-time.

The coupon category posted a particularly strong month in May, gaining 19 percent to 34.7 million visitors to lead as the top-gaining category for the month, according to a comScore (NASDAQ: SCOR) study researching traffic at the top 50 Web properties.

Coupons Inc., which includes Coupons.com, captured the top position in the category with more than 15 million visitors in May, a gain of 85 percent from the previous month. Eversave.com ranked second with 3.8 million visitors, followed by RetailMeNot.com with 3.5 million visitors.

Social media and interactive marketing are also becoming more popular among brands looking for more affordable ways to extend exposure and offer promotions.

Yahoo also recently joined Microsoft in a partnership that will see Microsoft powering Yahoo's search business with its recently relaunched search engine, Bing, while Yahoo will handle search ad sales, albeit using Microsoft's AdCenter technology to manage ad flow.