Google and Its Econ 500 Method
October 14, 2009
“How Google Is Trying to Hold Up the Microsoft-Yahoo Deal”, if on the mark, provides insight into how Google handles strategic challenges. Michael Learmonth provides a fascinating glimpse of the behind-the-scenes activity related to the tie up between Microsoft and Yahoo, two companies caught, bypassed, and left in the dust by 11-year old Googzilla.
He wrote:
The Mountain View, Calif.-based giant hasn’t taken an official position on the proposed deal, but it is quietly disseminating a view to regulators, politicians, analysts and journalists: that the need for scale is not a valid case for approving Microsoft’s search deal with Yahoo.
The use of information to gum up the works strikes me as interesting. Google’s method has created a battle among economists, almost certainly a situation that will leave regulators, journalists, and bystanders wondering what the heck is being said. Economists—along with lawyers and MBAs—are the grandparents of tortured prose, part of the present financial crisis, and bottlenecks in regulators’ offices. Ah, the joys of an economic theory argument. Who has the popcorn?
Stephen Arnold, October 14, 2009
No one bought me a donut to offer this opinion.
Yahoo: A Case Study in the Effects of Delayed Investment in Infrastructure
October 12, 2009
In my client reports, I have pointed out that Yahoo has been behind the eight ball because of its information technology decisions. Panama is an excellent case in point. But there are other examples such as recoding Delicious.com, the multiple search and retrieval systems, and the inability to deliver advertisers the type of user ad pinpointing the Mad Ave crowd has wanted for years.
I don’t think too much about Yahoo because it is not in the search and content processing game I play. The article “Yahoo Pays Its ‘Technical Debt’ with IT Overhaul” triggered my interest in the company and the thoughts captured in this short post. ZDNet’s point was that Yahoo had a “rat’s nest” of systems. The focus recently has been rationalization of the infrastructure. For me the key point in the write up was:
Pullara [a Yahoo executive] went into details about Hadoop, which he called a love story. Yahoo started building its own MapReduce platform, but decided to go open source.
When I read this paragraph, three points came to mind:
- Yahoo is trying to follow Google. The notion of a Google legacy is directly relevant. The problem is that Yahoo is trying to tap into the Google legacy late in the game. I think it may be too late for Yahoo.
- Yahoo, if the article is accurate, is now openly admitting that its numerous technical gurus had not taken steps to reduce the complexity and associated costs of the fragmented, disconnected chunks of its infrastructure.
- The open source play may come back to bite Yahoo. The company’s ability to monetize strikes me as less effective because its new system has to stay one step ahead of those who can out do Yahoo with Yahoo’s own technology.
In short, Yahoo’s delay in tackling its information technology infrastructure problem has given Google plenty of time to build a big lead over Yahoo. Now the “new” Yahoo may be creating competitors who may find it easier to suck Yahoo’s blood than pursue Googzilla. The cost to Yahoo for its information technology blunders has been high and will become higher. Useful lesson for other firms in my opinion.
Stephen Arnold, October 12, 2009
Yahoo May Hold Online Properties Garage Sale
October 8, 2009
Short honk: A happy quack to the reader who sent me a link to Business Insider’s run down of Yahoo properties that are for sale. The information is presented in a series of pages in an article called “Yahoo: What’s For Sale, What’s Not, And What Could Be”. I have not been paying close attention to Yahoo because the deal with Microsoft leaves me with quite a few questions. I clicked through the links and noticed that one of the properties in the list was Yahoo Games. Another that caught my attention was Delicious, also on the Business Insider list. Assume that Yahoo does sell these online properties. The company will generate some cash. My view is that by streamlining itself, the firm may benefit more by reducing some information technology costs. Business Insider’s list is thought provoking in my opinion.
Stephen Arnold, October 9, 2009
Yahoo: Clouds or Fog
October 2, 2009
I found Steve Shankland’s “How Yahoo Is Betting Its Cloud Will Pay Off” a useful look at what Yahoo wants to be—someday. Unlike the frou frou in the Hewlett Packard “analysis” of mainframe computers, Mr. Shankland reports what Yahoo wizard Shelton Shugar, Yahoo’s senior vice president of cloud computing, explained in one or more conversations with Mr. Shankland. Several points struck me as interesting:
First, the focus and investment in cloud computing is aimed at some tough Yahoo problems. Here’s the statement that sums up this point:
although rebuilding Yahoo on its own cloud-computing foundation is expected to save some money, the primary motivation is to liberate the company’s programmers from the difficulties and drudgery of coding for gargantuan audience on the Internet.
The wording suggested to me cost control and a step toward reducing the work and rework method that has kept Yahoo from leveraging certain revenue opportunities.
Second, I found the reference to multi-tenancy fascinating. The passage I noted says:
it’s [the Yahoo cloud] got a variety of interfaces that many Yahoo services can use–a concept often called multitenancy–so they don’t have to build them on their own. For another, it’s global, handling thorny issues such as operating at large scale and replicating data for reliability and responsiveness. And it’s got a degree of elasticity built in, so the infrastructure can expand, contract, or otherwise adjust to changing work load demands.
Multi tenancy is the technology that Salesforce.com has worked hard to tame and even harder to drive patent applications on its systems and methods into the ever efficient USPTO. I must admit I never thought of Yahoo operating a multi tenant system. I think that’s because Yahoo kept services separate in silos. Whatever was going on across silos was mostly a mystery to me. Within silos, my research suggested a fruit cake of solutions. Salesforce.com, bless its heart, is more homogeneous even though its dark heart pulses in tune with Oracle reads and writes.
Finally, Yahoo had performance problems and judging from this statement Yahoo still has performance problems. This is the passage I marked:
We need to be able to tweak it [Yahoo’s virtualization implementation] quite a bit for performance, to match it with our hardware,” Shugar said.
When I access Yahoo mail from outside the US, I have to deal with multiple time outs. In my opinion, the latency makes Yahoo unusable from some of the fine places I work. Even more annoying is the hit and miss results from Yahoo’s email search system. Once a week, the system reports I have no matches for my email queries. Not too good since I pay for a premium Yahoo service.
I hope Yahoo moves from “as is” to a platform that works better for me. My thought is that Yahoo is years behind in infrastructure, and if the economy goes south, cash will be tight and the job won’t be completed. If that happens, Yahoo adds to its already significant handicap.
Stephen Arnold, October 2, 2009
Google Bing Market Share from Nielsen Megaview
September 18, 2009
I read the Mashable write up about Bing.com’s 22 percent jump in search market share between July and August 2009. The summary was good. I am skeptical about online traffic reports and market share break outs. Let’s assume these are spot on. One interesting item was that Yahoo’s share of the search market decreased. Interesting. The other point that struck me was the decrease in Comcast’s search market share. It dropped 21 percent. I did not know Comcast had a search service. Google, according to the data, suffered no decrease in market share. Growth was modest. The Google held a 65 percent share of the search market, which I assume was US only. This 65 percent number is below the anecdotal Google search market share I heard at a reception in Washington, DC last week. The battle is likely to be a long term one, and I wonder if Yahoo can deal with Microsoft’s possible incursions.
Stephen Arnold, September 18, 2009
Why Search Is Difficult
September 12, 2009
I read Henry Blodget’s “Danny Sullivan: Carol Bartz Is the Sarah Palin of Search” and recognized a rare bird spotting event. Two fellows with spectacular Google PageRankings illustrate the challenges the notion of “search” presents to analysts, pundits, wizards, search engine optimization mavens, and other assorted search trend watchers. First, you need to read Mr. Blodget’s essay and then follow the links in his article. The idea is what could pass among the online advertising crowd as a 60 second bit on 30 Rock. But the write up called attention, in my opinion, to the significant epistemological issues that stick to the word “search” like a leech to a patient’s chest.
Here are my personal observations:
First, search is not defined. The assumption is made that everyone knows what search means. In the context of Mr. Blodget’s quote rundown and the original Sullivan observation, search means online advertising and getting eyeballs to a public Web site. The problem is that a person with a different angle on search won’t know what the heck the analogy is supposed to illuminate. That’s the problem. No one knows what search means because the folks talking about the concept omit the definition part of the communication process. The analogy of Palin to Bartz is clever but does little to illuminate Yahoo’s present challenges.
Second, a single person cannot make a quick change at an outfit the size of Yahoo within the business processes in play within Yahoo. At this point in time, Yahoo is mired in its business methods, and the president (forget who is running the show at any point in time) looks silly because the business processes themselves are silly. This explains some of the statements by Ms. Bartz. There are no better nor worse than generalizations made by any executive trying to impart change when the flow of decisions works like a bowling ball going down a gutter. Change, as students of that management discipline know, is a tough job. Working to make that change and deal with the need to make public comments ensures statements that are likely to tickle some listeners’ ribs.
Third, when the word “search” is used in a context involving Yahoo, the difficult problem is the Yahoo “as is” technical infrastructure. By “infrastructure” I mean the hardware, software, technical architecture, and in place systems. In order to tame search, one needs to look at what must be done among the handful of companies that are generating positive cash flow in * any * sector of the information retrieval and content processing sector. There are not that many companies making money, a fact that is often overlooked. But the characteristics are pretty easy to identify; for example:
- Technical competence that is channeled
- Ability to solve a customer’s problem in a way that does not generate greater costs going forward than the revenue stream can support
- Reasonable cohesion within and among technical teams
- An affordable, repeatable method for getting the word out to potential buyers
- A way to generate money sufficient to pay the bills, produce surplus cash that can be invested in new ways to make money, and leave money around to keep stakeholders happy.
When these components are in balance, the company – no matter how quirky or wacky its management – can succeed in one or more of the business sectors that make up the search market. When misaligned, making money from content processing and information retrieval is tough. When revenues falter or profits collapse, the quirks become hallmarks of ineptitude.
Yahoo is a goner. I don’t think a change in its top management will make any difference whatsoever. Yahoo is a bit like the eastern European countries with big ideas and ways of doing business that failed economically. Yahoo is in that situation, and I don’t see a revolution coming. Yahoo is the end point of an Internet company following a digital entity life cycle. Yahoo is trending downward.
Forget the people at the top. Yahoo to survive has to undergo a revolution or be subjected to what Japanese management experts call “bunsha”. Without deconstruction and reinvention, Yahoo cannot be other than Yahoo. That’s no joke, and it puts in context why casual chatter about “search” rarely yields a change in a company dependent on “finding” systems.
Stephen Arnold, September 12, 2009
OneRiot and Collecta– Husbanding Funds
August 29, 2009
I received an email from a person at OneRiot, a real-time search vendor, yesterday, August 27, 2009. The message focused on OneRiot’s receiving $7.0 in funding. For me, the key point was:
OneRiot’s partners include Yahoo and Microsoft, who recently released a version of Internet Explorer bundled with OneRiot real time search.
You can learn more about OneRiot.com’s services by navigating to the company’s About page.
I was curious about Collecta.com, another contender in the real time search sector. My recollection was that Collecta.com also had received infusions of investment cash. According to TechCrunch, Collecta raised $1.85 million in a series A round. Other competitors in this sector include ITpints, Scoopler, and niche services like Topsy, among others.
My tests of these services indicate that each has strengths and some issues which will be remediated in the future. My question is, “How much magnetic power did the OneRiot tie up with Yahoo and Microsoft have in this recent funding tidal wave?” Comparing outputs of OneRiot and Collecta, I wonder, “What OneRiot will do with its basket of cash?” Neither Yahoo nor Microsoft, in my opinion, have real time search services on a par with the companies I have mentioned. Google, in my opinion, is on the sidelines in this sector as well.
Stephen Arnold, August 31, 2009
Yahoo Mail Search Broken
August 26, 2009
I have a for fee Yahoo email account. I tested the search system this morning. The queries returned a null set. The result message I received appears below:
I was unable to locate a way to query Yahoo about this problem. As a paying customer, I expect a system to work and to have an Apple style “report a problem” button available to me. At this point, I don’t know if the search issue is one specific to me or if it is an indication that a larger, more severe problem exists within the Yahoo mail search function.
Stephen Arnold, August 26, 2009
Yahoo and User Experience
August 25, 2009
Lots of posts from gurus, azure chip consultants, and real journalists about Yahoo and search. I have plowed through about 15 of the online write ups. A couple jutted above the plain; most we in the low lands. A good example of the thinking that is not quite up the mountain is the write up “Yahoo: We’re Still in the Search Business”. The main point for me was this passage:
“I fully anticipate that our front-end experience will evolve differently from Bing,” said Prabhakar Raghavan, senior vice president of Yahoo labs and search strategy, during a presentation to journalists at Yahoo’s headquarters in Sunnyvale, Calif. “We collaborate on the back end, but we are competitors on the front end.”
So the plumbing is the plumbing. The differentiator is the user experience. To me that means interface. A search box is a part of the interface. Ergo Yahoo cannot do much with the white rectangle into which people type 2.3 words. Yahoo must add links, facets, and any other gizmo that allows a person to find information without typing 2.3 words.
I just looked at the Yahoo splash page for me:
I find this page unhelpful. I can personalize the page, but I see the Excite type of clutter that annoys me when I have to hunt for the specific link I want. Examples: NASCAR news. Three clicks. Email. Log on and extra clicks to get past the news headlines. My account for for fee email? Good luck finding this page.
I look forward to user experience changes, but I don’t think interface alone will address the issues I have encountered with Yahoo Shopping, locating news stories that have been removed even though links in the wild to the story are available, and finding specific discussion group content quickly.
I want more than punditry and user experience. I want a system that provides information access. Right now, Yahoo has many opportunities to improve, but the key will be the plumbing. If I understand the posts I have examined. Microsoft and Yahoo will collaborate on plumbing. I had a house once with two plumbing contractors. I recall some exciting discussions with the two plumbers. No one had responsibility for the leaky pipes.
Stephen Arnold, August 25, 2009
Yahoo Leaving Google in the Dust!
August 24, 2009
My newsreader delivered a morsel to me with the title “Where Yahoo Leaves Google in the Dust.” The author is Randall Stross. His analysis left me confused. Selecting one Yahoo service like News or Finance is a useful analytic method. I use it myself. What surprises me is the leap made that the success of a single service suggests that other successes will follow. I like to step back and look 01at the overall picture, not the exception. I admit exceptions at Yahoo are interesting.
I am tired as I write this (Saturday, midnight, August 22) but I had to capture my thoughts about how a couple of successes distinguish Yahoo. Is Yahoo is making the Google look silly or “leaving it in the dust”?
In my narrow view of the world, Yahoo has revenues that are smaller than Google’s. Yahoo has traffic but the Google is, according to some of the outfits who estimate traffic, has pulled ahead. Yahoo is a collection of services that I have a tough time keeping straight and sometimes finding. Mr. Stross writes:
It seems unlikely, however, that Google’s new tools — whose metrics include one called the Fast Stochastic Oscillator — will do as much for building traffic as a fluffy news story or a short video featuring talking heads. Yahoo understands that a free finance site prospers by drawing less from the world of mathematics and more from the world of entertainment, informing just enough to satisfy users without setting off an anxiety attack.
The business school professor, Mr. Stross, is talking about the popular Yahoo Finance service. That service is outperforming Google Finance when measured by the yardsticks of friendliness and traffic. I agree. Yahoo’s service does not cause me any stress. For me, Google’s service is useful. I quite like the link to the Relegence content on AOL.com for example. Also, Yahoo has a killer service with OMG. Few of my contacts know about OMG, a celebrity info service. Google does not have much of a product in this category but there is some celebrity info on Google News. Also, Yahoo has a deal with Microsoft. Google does not. Google is pretty much alone in its sail boat. For me, defining differences between Google and Yahoo that I note include:
- Google makes more revenue. Money is really important.
- Yahoo watched as Google aced the company in online advertising. Losing that original ad lead to Google remains important today.
- Yahoo has abandoned what may be the key function in online: search. Yahoo has withdrawn from search which is important. Search is no longer search. Search is the way to access information. Without that access, it is indeed tough to do certain types of knowledge work.
- Yahoo has sought refuge with Microsoft. Yahoo needs a care giver. That’s important to me. Care givers are often in the cat bird seat.
If anyone is left in the dust, it is Yahoo in my opinion. That is not a popular view. What is popular is making the Google look like a loser by selecting a narrow focus and setting up yardsticks that ignore the overall revenue capability of the organizations. Business school boils down to money. Seems like an omission of note in my opinion.
Stephen Arnold, August 24, 2009
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