Yahoo: Inventing the Next Facebook
March 5, 2009
Reuters issued a story with the social network worm dangling in front of the Web surfers fishing for information. You can read “Yahoo CEO Interested in Social Networks and Search” here. The Thomson Reuters’ links can be slippery eels themselves, so the link may be dead when you read my comments. The story summarized Yahoo’s new chief executive’s comments at a bank’s high tech conference. Yep, banks. High tech. Credibility. Whatever. For me, the most remarkable comment attributed to Ms. Bartz, chief Yahoo, was:
“I do not believe we can invent the next Facebook,” Bartz said.
When I read this, I realized that Yahoo’s research and development effort might be redirected. Acquistions, partnerships, and deals may not require the innovations that have been released in the last year; for example, BOSS, the build your own search system. Maybe Yahoo will stick to its historical path of buying companies and trying to grow seedlings into giant redwoods. I liked Ms. Bartz’s pragmatism. I wonder what it means for Yahoo’s R&D initiatives and what companies will become the focal point for Yahoo. With “every business up for examination”, the stability of Yahoo may be a future goal, not a here and now reality.
Stephen Arnold, March 5, 2009
Shift in Online Behavior May Be Evident
March 4, 2009
Enid Burns, ClickZ, wrote “More Time Spent Online Communicating than Getting Entertained” here. I think the data summarized in her article may be harbingers of a shift for some demographic sectors. You can read her article here. She summarizes a report from Netpop Research, so I don’t want to recycle her analysis. The most important point for me was this statement:
Time spent communicating online went from 27 percent of time online in 2006 to 32 percent in 2008. Communication, in the survey, includes activities such as e-mail, instant messaging, posting to blogs, and photo sharing. “We’re really looking to create personal relationships and communicating with people,” said Josh Crandall, managing director of Media-Screen Crandall.
Three observations:
- The Internet technology is absorbing broader human and communication functions. The pace will accelerate and saturation will occur in the foreseeable future in developed nations. Landlines are goners and the new net-based comm modes will ignite considerable change and innovation
- The demographic push on organizations means that social functions of those connected will move to cyberspace. Implications and consequences are difficult to pinpoint. I think the impact will be significant, leaving some traditional online companies behind quickly unless these outfits adapt.
- These services will want to coalesce into what I call a natural monopoly. This too has significant implications for users, regulators, and organizations competing in this emergent ecosystem.
In short, if these data are accurate, the next revolution is underway. Save the Google, Microsoft, and Yahoo T shirts. These items may become collector items if these firms don’t adapt to the traffic speeding down the information superhighway. Think roadkill.
Stephen Arnold, March 4, 2009
Twitter Facebook Analogy
March 3, 2009
Elad Blog’s “Twitter Is to Facebook as Google Was to Yahoo” is an interesting article. You may want to read it here. I think the idea that Facebook represents an older service and Twitter a newer one is interesting. I am not sure that I agree. Facebook is a step above MySpace.com which strikes me as a variant on a personal Web page service. These have been around for a long time. I think Yahoo bought GeoCities about 10 year ago. The progression in my mind is: GeoCities to MySpace.com and then Facebook. The “social phenomenon” that has some azure chip consultants foaming at the mouth is a consequence of more people using these services and incremental tech jumps that allow a Web page to be hooked into alerts, rich media, and various communication functions.
Twitter, on the other hand, started as a text messaging service and was crafted into a broadcast and follow service. At its core, a tweet is small text which can be created and sent at any time. The notions of mobility, brevity, and a single person’s utterance at a point in time are the text version of the old Nextel push to talk function. In my opinion, the sequence is mobile phone to SMS to Twitter.
Mr. King’s analogy (cited in the Elad Blog but no valid link when I checked) may work for an ex-Googler or Xoogler, but it doesn’t work for me. The next part of the analogy breaks down as well. Yahoo was not a search engine. Yahoo was a directory. Yahoo got into search when someone realized that the slowness, the cost, and headaches of the directory could be complemented and later replaced with a search system. Enter Inktomi. Yahoo has never been much of an innovator. The company bought other companies and allowed those companies to operate as separate entities. Yahoo got into the ad business in the way my mother got into hats. She just bought them, wore a hat once, and then put it in a box. Yahoo never integrated ads across its services. Yahoo bought Overture and never enhanced the service. The rest of Yahoo’s history is a loop of these basic business methods. Collect, fail to integrate, put on shelf, and move on to the next thing. Here’s the Yahoo progression in my opinion: Yahoo directory to Inktomi search to portal to acquire separate companies to loosely federated conglomerate. Yahoo is not integrated yet.
Google, on the other hand, focused on search. Skipped the portal craziness. Google bought and borrowed, paying Yahoo about $1 billion to make an Overture related legal matter go away prior to the Google IPO. The Google progress, in my opinion, was search to advertising to application platform to information utility.
As a result, there’s not much similarity between Yahoo and Google other than both have offices near one another and both operate online services. Yahoo is fragmented and Google is more homogeneous. Yahoo will have a tough time becoming Google no matter how many Bain consultants scurry around thinking blue chip thoughts.
Despite my objections, I think the analogy is important for three reasons:
First, the analogy was crafted by a Xoogler, and that tells me some folks close to Google understand that Twitter and Facebook have found traction where Googzilla has not. I have pointed out in this Web log that Google seems unable to act with the resolve it demonstrated in the 2004 to 2006 period. Now the company seems to be morphing into a Microsoft style outfit. I think the GOOG is falling behind in real time search. The splash page at http://blogsearch.google.com is stale compared to what I can find at http://search.twitter.com. I am floating the idea now that this failure to respond to real time search is the
Second, the growth curve for Twitter and Facebook are solid. These services do not as yet directly compete if you accept my point of view. Both are vulnerable to a service that fuses the two functions in a useful, interesting way. Right now I don’t see either Facebook or Twitter able to do much more than try to keep up with here and now opportunities. That makes both outfits vulnerable to some extent.
Third, the analogy shows that what once were separate services are, at their core, probably ripe for fusion. These functions–Yahoo grab bag, Google search, Facebook Web pages, and Twitter micro blogs–can be rolled up into one big digital ball. I think that will probably happen. Furthermore, I don’t think any of the companies I just mentioned will be able to pull this off.
Stephen Arnold, March 2, 2009
Potential Trouble for LexisNexis and Westlaw
March 2, 2009
Most online surfers don’t click to Reed Elsevier’s LexisNexis or Thomson Reuters Westlaw. The reason? These commercial services charge money–quite a lot of money–to access legal documents. Executives at both firms can deliver compelling elevator pitches about the added value each company brings to legal documents. In the pre-crash era, legal indexing was a manual process. Then the cost crunch arrived so both outfits are trying to slap software against the thorny problem of making sense of court documents, rulings, and assorted effluvia of America’s legal factories. I may write about how these two quasi US outfits have monopolized for fee legal information about American law for lawyers, government agencies. Both Reed and Thomson then turn around and sell access to these documents to the agencies that created them in the first place. I wonder if the good senator is aware of this aspect of commercial online services’ busness practices?
What’s the trouble? I bet you thought I was going to mention Google. Wrong. Google is on the edge of indexing legal information in a more comprehensive way. But the right now trouble is Senator Joe Lieberman. Wired reported that the good senator wondered by public documents are not available without a charge. You can read the story “Lieberman Asks, Why Are Court Docs Still Behind Paid Firewall?” here. Senator Lieberman’s question may lead to a hearing. The process could, in my opinion, start a chain reaction that further erodes the revenue Reed Elsevier and Thomson Reuters derive from public documents. Somewhere in the chain, the Google will beef up the legal content in its Uncle Sam service here.
At their core, Reed Elsevier and Thomson Reuters are traditional publishing and information companies. As such, their business model is fragile. Within the present financial pressure cooker, the Lieberman question could blow the lid off these two organization’s for fee legal business. If government agencies shift to a service provided by Google, Microsoft, or Yahoo, I think these two dead tree outfits will crash to the forest floor.
What the likelihood of this downside scenario. I would put it at better than 60 percent. Have another view? Share it, please. Set the addled goose straight.
Stephen Arnold, March 2, 2009
Google: Market Share Up, Market Share Down
February 27, 2009
I don’t know if comScore is right or wrong. Figure a plus or minus 10 percent. The data reported in the stats section of ZDNet Web logs here said Google had a 77 percent market share in December 2008. Slap on the 10 percent and I get a range of 67 to 87 percent market share. Pretty good but Microsoft and Yahoo could be seen as nibbling away at Google’s lead. Is Google the top dog? Is Google losing ground to challengers?
Stephen Arnold, February 27, 2009
Microsoft Yahoo Search: The Rematch
February 26, 2009
I don’t know if this story in Silicon.com is true, but I don’t want to lose track of it an the date. Today is February 26, 2009, and “Yahoo Not Opposed to Search Sale” caught my attention. You can read the story here. The new hierarchical Yahoo is emerging. According to Silicon.com via Reuters, Yahoo CFO Blake Jorgensen allegedly said that Yahoo is willing to entertain a sale of Yahoo Search to Microsoft. With the Google in the clutches of YAGGs and sitting on the sidelines as Twitter.com becomes the go to service for real time search, maybe this will be the magic wand that delivers what Microsoft wanted. A larger share of a service that is losing its relevance to some demographics. Great timing is the key to business success. With Microsoft emulating RCA, this potential tie up might have interesting consequences for Microsoft and Yahoo.
Stephen Arnold, February 26, 2009
The Frustration Machine: Yahoo Shopping Search
February 22, 2009
Navigate to Yahoo. Click on Shopping. Enter this query, “discount carpet tiles”. Scan the results list. No carpet tiles. The list contains cleaner, door mats, and a rotary jet extractor. The phrase “carpet tiles” generates two pages of results. Zero relevance. The ads are a different story. On the first page of results, Yahoo displays nine ads with the phrase “carpet tiles” and one ad inviting me to take a survey and maybe win a $1,000. With news of a Yahoo reorganization flapping across my monitor, I sure hope the new set up tackles the fundamental ineffectiveness of eCommerce search. Here’s Bloomberg’s description of the reorganization. I heard Bainies are helping Yahoo. I wonder if the MBA trophy generation wizards have run the “discount carpet tiles” query on Google. Give it a whirl here. Nah, that’s too trivial an exercise for Yahoo poobahs, search wizards, and consultants.
Stephen Arnold, February 22, 2009
Google: Warning Bells Clanging
February 19, 2009
Henry Blodget wrote “Yahoo Search Share Rises Again… And Google Falls” here. The hook for the story is a report from the comScore tracking data that shows Google’s share of the Web search market “dropped a half point to 63%.” Mr. Blodget added quite correctly, “You don’t see that every day.” Mr. Blodget also flags Yahoo’s increase in search share, which jumped to 21%. Yahoo has made gains in share for the last five months. Congratulations to Yahoo.
Several comments:
- Data about Web search share is often questionable.
- Think back to your first day in statistics. Remember margin of error? When you have questionable data, a narrow gain or loss, and a data gathering system which is based on some pretty interesting data collection methods–what do you get? You get Jello data.
- The actual Web log data for outfits like Google and Yahoo often tell the company employees a different story. How different? I was lucky enough last year to see some data that revealed Google’s share of the Web search market north of 80 percent in the US. So which data are correct? The point is that sampled data about Web search usage is wide of the actual data by 10 to 15 percent or more.
Is Google in trouble? Not as much trouble as Yahoo. Assume the data are correct. The spread between Yahoo and Google is about 40 percent. Alarmism boosts traffic more easily than Yahoo can boost its share of the Web search market in my opinion.
Stephen Arnold, February 18, 2009
Yahoo and Its New Mobile Service
February 18, 2009
Yahoo News posted “Yahoo Mobile Aims to Channel Your Inner iPhone” here. Yahoo access on my various mobile devices seemed to require quite a bit of menu shuffling. I also found the interface’s refusal to remember my log in name somewhat idiosyncratic. But the system worked. The new service as described in the news story seemed to me to be a giant step forward. The news release said:
Yahoo Mobile will be released in three versions — one for the mobile Web, one for the iPhone, and one for other smartphones… Yahoo’s onePlace is also available in all three editions. The service lets a user access and manage, from a single location, favorite content such as news topics and sources, RSS feeds, sports scores, weather conditions, stock quotes, blogs, movie theaters, or horoscopes… In the smartphone version, users can also use oneSearch’s voice-search feature simply by talking. It also offers maps; an integrated mini-version of the popular mobile Web browser Opera; and widgets, which are small applications that provide various services that can be mixed and matched.
I fired up my smartphone and navigated to Yahoo, following the same steps I had used prior to my test on February 17, 2009, at 5 pm Eastern. Instead of a new Yahoo service or the old Yahoo service, here’s what I saw:
Sigh. I understand that new Yahoo is not available, but what about old Yahoo?
Stephen Arnold, February 18, 2009
Yahoo Monetizes BOSS Soon
February 12, 2009
A happy quack to the reader who alerted me to Yahoo’s business model for BOSS (build your own search system). BOSS has been “free”. The reasons range from building traffic to expanding the reach of Yahoo. Free is generally good. Spidering the Web and indexing content can be expensive. Yahoo knows this first hand. Certain vendors have been quick to embrace BOSS because the price was right. Besides Yahoo’s own search results often leave me unsatisfied. I have written about Cluuz.com because the company uses BOSS and the firm’s technology makes much better use of the Yahoo index than Yahoo itself does in my opinion. Now Yahoo wants to charge outfits like Cluuz.com, a small Canadian company, to use BOSS. The new story in Network World here said:
Once Yahoo introduces BOSS fees towards mid-2009, it will also increase the number of search results an engine can obtain via a single API call to 1,000 from 50. The fees vary depending on the type and quantity of search result involved. Yahoo will also offer SLAs to promote the creation of more sophisticated BOSS search engines.
Yahoo assumes that some of the outfits using BOSS will monetize their services. I think that if a company using Yahoo’s BOSS could monetize its services, the company would be monetizing now. The economy is a bit shaky and among the hardest hit are small search and content processing companies. Yahoo and others of its ilk give away search systems. Presumably Yahoo perceives a revenue win.
In my opinion, BOSS users may start looking around for ways to shift from BOSS to another service. Microsoft, are you listening? The GOOG never listens but maybe the idea of tweaking Yahooligans again might spark some activity.
Maybe this is a brilliant play that will reverse Yahoo’s search fortunes? I hope so. I am uncomfortable watching the company follow the trajectory of Ask.com and America Online, among others in the information processing game.
Stephen Arnold, February 12, 2009
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