At Yahoo Is Bartz Topedoing Search or Search Torpedoing Bartz
June 9, 2009
I read a long analysis by Dan Sullivan here called “Bartz Continues Torpedoing Yahoo Search”. I found the information useful because it provides a run down of recent announcements and developments in the ossifying world of Web search. I urge you to read the essay. I found this comment quite suggestive:
Geez, it’s like Bartz handed a gift to Microsoft. Here Microsoft wants to build awareness that there’s an alternative to Google, and Bartz effectively tells people that Yahoo’s out of the game. It was somewhat similar to how Ask screwed up last year … and now still struggles to be counted among the major search engines. Who thought Yahoo would shoot itself the same way?
Several thoughts crossed my mind.
First, the analysis touches only indirectly on the issue that I think is adding basil to Ms. Bartz’s recipe for a Yahoo turnaround—cost. If one can look beyond the posturing, Ms. Bartz has access to the cold hard facts of the cost of search at Yahoo and how those costs match against Yahoo’s actual revenues. My hunch is that the business of search is one that is one rooted in how much money it takes to operate search, feed the warring engineering factions, and manage the set up. Leaving cost out of an analysis means that Yahoo is able to conduct business in a predictable way in terms of operations. I think costs toss predictability out with the burned vegetables.
Second, the mixing of signals is neither unusual nor unexpected. Yahoo is a mini AOL but it has a different series of revenue streams. Dealing with these strong currents is confusing job, just ask any corporate captain who has had to deal with incomplete or flawed financial information and projections. One day the weather is clear; the next Matilda is knocking on the door.
Finally, the search market is ossified. Now I know that there’s considerable hope for the start ups in search like Wolfram Alpha. I know that Microsoft is spending $80 to $100 million to supplant “just Google it” with “just Bing it”, but Google’s market share continues to creep upwards. I think the data that suggest Google has a 60 to 70 percent market share are wide of the mark. Think in terms of 80 percent in the US and 90 percent in some other areas such as northern Europe. A big push in search is going to yield exactly what return? My hunch is that when cost is factored into the equation, Ms. Bartz is doing a pretty good job of keeping investors reasonably stable while she tries to make sense of the Web’s Balkan conflict.
Just my opinion.
Stephen Arnold, June 9, 2009
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