Will Microsoft Buy Yahoo Search
November 29, 2008
A happy quack to the reader in the Old Country who alerted me to this story in the London Times, “Microsoft in $20 Billion Yahoo Deal.” You can read the news item here. According to the story by John Waples, Microsoft will not get the whole of Yahoo, just what Microsoft considers the good part. The financial play is too complex for me. I think it will be interesting to see if Microsoft’s data center wizards can saddle up and ride the Yahoo engineering infrastructure. I think some of those cowpokes from Redmond will find themselves in a few running gunfights with Yahooligans. Who will win Ray Ozzie’s last stand? I am eager to watch the deal unfold if it comes to pass. At long last, Microsoft will have narrowed the gap between itself and Google in Web search to 30 to 40 percent. What an exciting development if it occurs.
Stephen Arnold, November 29, 2008
Google: ZDNet and Two Views of Usage Data
November 29, 2008
This item is not really about Google. I think I found it interesting that ZDNet UK wrote a story here with the headline “Yahoo, Microsoft Outperform US Search Growth” and ZDNet US wrote a story here with this headline “Microsoft Still Fighting a Losing Battle against Google”. I detected a certain joy in the UK story. The GOOG is not growing so quickly. The fact that hapless AOL is giving up share in a lousy economic climate to other Web search outfits is not too surprising. The US ZDNet analyst, Garett Rogers, reproduces a chart and suggests that Google is still growing, just not as quickly. I think data from outfits like Comscore and others are only somewhat helpful. Based on the resources to which I have access, I peg Google’s share of the Web search market in the 75 percent range with its share in certain countries in Europe nosing into the 90 percent range. The big point for me is that most people, including trained analysts, have a reluctance to accept three facts:
- Google’s share of the search market is dominant and it is unlikely that short of the Google triumvirate having a shoot out in the Google cafeteria, not much is going to change in the foreseeable future
- Microsoft and Yahoo are not making significant headway because users are not running queries on these systems. The problem is not Google; the problem is the user.
- The data from consultants who make a horse race out of sampled data output stuff that does not make the conclusion easy to understand.
In Web search, the GOOG is number one, and unless Yahoo and Microsoft figure out how to leapfrog Googzilla, the gap is likely to remain quite wide. Clicks mean money. Paying money for traffic won’t do the job. Yahoo, bless its purple heart, has one heck of a mess to sort out. Selling the Kelkoo search system that worked while keeping one that doesn’t work very well is one sign that the company is drifting. Yahoo lost money on the deal and kept the less effective system.
Stephen Arnold, November 29,, 2008
Yahoo Shopping Search
November 22, 2008
My mother had a black thumb. She could plant a flower, and it would die. My father, on the other hand, could grow tomatoes that would spawn softball-sized fruit without doing much more than dropping the seed on the ground. Yahoo is a bit like my mother, not with plants but with growing profitable businesses. I read in TechCrunch a story by Ouriel Ohayon here that Yahoo sold its Kelkoo property. Yahoo had a shopping search at the time of the 2004 acquisition. Yahoo still has its not too useful to me shopping site today. What it doesn’t have is the $450 million the company lost on the deal. Yahoo has a financial black thumb.
Its inability to integrate acquisitions has long been one of the company’s most glaring weaknesses. The sale of Kelkoo proves once again that Yahoo doesn’t integrate its acquisitions in the manner of Google. Yahoo can own a property for four years and sell it like I would sell one of my goslings. Not much integration evident, do you think?
And what about Yahoo’s shopping search at this pivotal time of the retail year? In my opinion, I don’t think it is very good. Someone responded to my earlier criticism of Yahoo’s shopping search by pointing me to Kelkoo. Well, that won’t work now, will it. Try this test. Navigate to Yahoo.com, click the “shopping” label above the search box, and you will see the bold face “shopping” to alert you that you are now running a shopping search. Now enter this query: “penguin bracelet”. What do you see? Well, I got this page of results:
Now navigate to Google, click products, and run the same query. Here’s what I received from the GOOG:
I know these screen shots are difficult to read due to WordPress’s helpful image compression algorithm. But the key point is that the Yahoo results includes zero nada zippo penguin bracelets. Google delivers me penguin bracelets.
Similar queries return similar results. I am not sure why the Yahoo system does not do a better job of figuring out what I want when I run a query. Maybe I am not as tuned into the Yahoo “way”? Maybe Yahoo is not as tuned into what I want when I run a query? Maybe it is just a lousy search system and method? I use Yahoo less and less because it’s search system continues to unhelpful for me. Google, despite its weird positioning of Google Products is getting better.
My hypothesis: Google has my father’s green thumb. Yahoo has my mother’s black thumb (may she rest in peace). Not only does Yahoo have the uncanny ability to muff its acquisitions, Yahoo can’t find penguin bracelets.
Frankly I am tired of Yahoo technologists telling me that Yahoo’s engineering is as good or better than Google’s. I just don’t buy that argument. I can’t relate to black thumbs, and it is a fact that I can’t buy a penguin bracelet via the Yahoo shopping search system. I can, however, buy a pink penguin bracelet, a gold penguin bracelet, and silver blue gray penguin bracelet from Google.
Stephen Arnold, November 22, 2008
T-Mobile: Dazed and Confused
November 21, 2008
T-Mobile is my mobile telephony and data provider. I am a customer, and I can provide numerous examples of T-Mobile’s dazed and confused approach to online services. The company launched its own “interface” to Internet news and trendy subjects and labeled these “T Zones”. I still haven’t figured out what the service is doing when it tries to open information on the Reuters and ESPN Web sites. The downloads are little more than a way to ding me for files I can get free elsewhere. The account information remains as useless as it is on the T Mobile Web sites for customers, which is different from the site for general access which is different from the site which sells phones and so on.
I heard a couple of years ago that T Mobile was going to use the Fast Search mobile search technology. You can see this in action on some of the InfoSpace.com properties, or at least it was working earlier this year. I did not find the service particularly compelling and apparently neither did T Mobile.
I read in IOL Technology here that T-Mobile will use the Yahoo search system for its search system. Presumably the search system will be available to me on my BlackBerry. What was interesting about this announcement, I heard in Europe earlier this year that T-Mobile was talking to Google about using its mobile search technology. Then I heard a rumor that T-Mobile was looking at other alternatives as well.
Other developments at T-Mobile include:
- Staff consolidation (which in my opinion means layoffs). Information here
- Price increases here
- Grief about its marketing here
- Creating yet another T-Mobile “portal” called Web2Go here.
Stepping back, I think T-Mobile is floundering. With the Yahoo announcement, I asked myself, “Don’t these guys know that Yahoo may exit the search business?” Obviously T-Mobile has confidence in Yahoo search. Not surprising since the company shipped me an empty box that was to contain a replacement for my malfunctioning BlackBerry. I called and the company mailed me a replacement battery. See what I mean? Dazed and confused.
Stephen Arnold, November 21, 2008
Ad Age Provides Color on Yahoo’s Rudderless Boat
November 17, 2008
The ad biz does not feather this goose’s nest. I received a mobile call today from a person from New York. He was annoyed that I have consigned Yahoo to the dust bin. I listened to the arguments the caller advanced. I recall the points about traffic, brands, and visibility on Madison Avenue. I told the caller, “Great points. Let me do some thinking.”
I poked around and saw a reference to the Ad Age article “Why Yahoo Still Matters for You.” You can read the full text of the story here. The authors were Abbey Klassen and Michael Learmonth. The headline, in my opinion, was misleading. The write up provided me with more evidence about Yahoo’s rudderless boat. Among the points I noted were:
- The company lost an account because it lacked ideas
- Yahoo has potential
- Yahoo has more levers to pull than some of its competitors.
None of these points has enough wood behind them to get me to change my mind. Yahoo has been around about 15 years. I think its lack of ideas is evident in the wacky and ineffective search system. One example today: I wanted a football score. Then on the sports splash page I wanted to find the results of last night’s NASCAR race. The search box beckoned me and returned Web wide results, not results about sports. Guess I am the only person in the world who wants to run a sports related query from Yahoo’s sports portal. Yahoo may have levers, but it needs to get a firm hand on its rudder and steer the boat away from Victoria Falls.
Stephen Arnold, November 17, 2008
Yahoo Bites the Bullet
November 16, 2008
I have been a critic of Yahoo for many years. The company’s technology strategy makes an addled goose look like Leopold Kronecker. The company bought companies and allowed each to operate in a silo. The technology gurus fiddled as advertisers burned when the ad people couldn’t get data about Yahoo demographics across its different silos. Then the company went wacky and drove its share price into the ground. All Things Digital reports that reality has infected the Yahooligans. “Yahoo Layoffs Set for December 10 (And, No, Jerry Yang Is Not Leaving Too)” provides the details of the pre holiday event. You can read Ms. Swisher’s write up here. Mr. Swisher offers a bit of color about the proposed tie up of AOL and Yahoo. I won’t add to that subject other than to say the Yahoo crazy math of 1 + 1 = 3 doesn’t make much sense to me.
A more interesting question is, “Will the layoffs make any difference other than a pumping up the balance sheet a bit?” In my opinion, “No.” Yahoo has an untenable cost burden due to its technology promiscuity. The present management team does not have a way to address the cost problem effectively. More is needed than some layoffs. The company needs to begin the painful process of downsizing and rebuilding. Whole chunks of the business are going to have to be sold or shut down. Yahoo is a ship in need of an overhaul and quickly. Time is indeed running out.
Stephen Arnold, November 16, 2008
Yahoo and Mobile Search
November 11, 2008
I have fooled around with speech to text for years. When I get a mobile device that wants me to talk to it, I disable the function. The reason is that I make calls from noisy places. The ambient noise combined with my goose honks baffles the speech to text software. A reader sent me a link to Stephen Shankland’s summary of his experience with Yahoo’s mobile voice search. You can read the full text of his story here. Mr. Shankland does a good job of summarizing what’s good and bad with the Yahoo system. In my opinion, the most interesting comments in the write up were not the assessment of Yahoo’s mobile search. I noted:
- Yahoo licensed technology from Vlingo. Google’s Sergey Brin has a voice search patent (US7027987) in this field which underscores the difference between the two competitors’ approaches. Google, according to my recollection, also licenses some technology, but one of the big guys has his hand in this field at Google.
- Mr. Shankland’s view is that mobile search is immature. I have been using mobile phones and searching for information from the day I got my first Motorola that could connect. Mobile search has worked; the problem is the form factor and the ambient noise problem that plagues me.
- Yahoo calls the service “OneSearch with Voice”. I have a tough time keeping these names straight. For me this is Yahoo Mobile Search.
Mr. Shankland also includes a chunk of useful market data in his article. Will Yahoo surge to the top of the mobile search market? We will have to wait and see. Yahoo has been struggling of late.
Stephen Arnold, November 11, 2008
The Post Google, Post Microsoft Yahoo
November 6, 2008
I learned a short time ago that the GOOG disconnected the Googlemobile from the Yahoo caravan. You can read a summary of the farewell statement here. (This is a Yahoo News link so click before the content disappears. Is this a possible preview of Yahoo’s own fate?)
The Yahoo news story ‘Google Pulls Out of Yahoo Advertising Partnership’ contains an outstanding quotation in my opinion:
“We’re of course disappointed that this deal won’t be moving ahead,” David Drummond, Google’s chief legal officer, wrote on a company blog. “But we’re not going to let the prospect of a lengthy legal battle distract us from our core mission. That would be like trying to drive down the road of innovation with the parking brake on.”
I know Mr. Drummond, a Googler to the core, is talking about the legal process, but it is hard for me to keep the metaphor of Yahoo as an engaged parking brake out of my addled goose brain.
Now what for Yahoo? A quick recap is that Yahoo managed to kill the Microsoft deal at $33 a share. Microsoft is not likely to pay that much if a deal can be rekindled. Now the machinations of the US regulatory process have made the Google tie up untenable it seems. The talks with the–please, forgive this metaphor–wounded duck America Online seem to be continuing. Yahoo itself is cranking out new initiatives, shutting dead duck services, and delivering papers about its world class research break throughs at what seems to me a record setting pace.
But what is the outlook? I think Yahoo is the Chrysler of the online Web search world. Without a sugar daddy, I think we will see a high traffic site move forward without any turbo charged revenue growth in the foreseeable future. Over time, Yahoo will just drift. Yahoo can turn around, but it will need at least three changes.
First, new management. I don’t think this needs much explanation. Yahoo has struck out the last few times it went to bat. Get new hitters. Simple enough.
Second, new technology management. Yahoo is busy convincing other researchers that it is innovating. Fix the cost issues associated with the present infrastructure and development methods. I am less interested in a new break through and more interested in cost control, then service integration. I do not need Yahoo invention. Yahoo buys stuff. Yahoo does not invent stuff.
Third, operations excellence. A new president is not going to know what to cut, what to streamline, and what to put on life support. The operations leadership at Yahoo has dropped its bat, ball glove, and socks. Get a boss and an operations team able to show up for the game and make sure that the team wins.
Just my opinion, folks. Just my opinion.
Stephen Arnold, November 7, 2008
Arista Lands Sun’s Bechtolsheim
October 27, 2008
TheStreet.com reported on October 23, 2008, Andy Bechtolsheim, co-founder and chief architect, will reduce his role at Sun Microsystems “to help build network switch startup Arista Networks.” You can read the full story here. Sun Microsystems has fallen on hard times. Tech wizards can engineer the pants off the Bach statue in Eisenach, but so far the Stanford University Network crowd has not been able to pump revenue into the company. The deal, if I understand the news reports, is that Mr. Bechtolsheim will become Arista’s chairman and chief development officer. In addition, he will continue to contribute to Sun.
What’s an Arista Networks? According to TheStreet:
“Arista is touting high-speed 10-Gigabit Ethernet switches and is clearly aiming to challenge Cisco in the data center networking niche.”
The problem with high speed switches is that these gizmos are like potato chips. You can’t get by with just one. Unlike the Dlink and Netgear devices, wavelength and optical solutions are exotic, expensive, and in demand. Outfits like Microsoft and Yahoo are building data centers designed to handles 50,000, 100,000, or more servers. Servers are useless unless telecommunication pipes can get data into the data center and from the data center to the servers. Arista Networks wants to play in this fast growing segment. Mr. Bechtolsheim is a savvy technology wizards, and he knows an opportunity for an upside when he sees one. The Arista play is not without risk which may explain that Mr. Bechtolsheim is working two jobs at least for now.
Arista gizmos. The 7124s is a 24-port 10GbE switch with 480 Gbps of bandwidth costs about $150 per port or about $3,600. Pricing data are hard to get, so if you want to buy a couple dozen of these gizmos, contact the company.
Arista’s angle, based on information available to me, is to offer high throughput at a more compelling per port price than other vendors such as Cisco. The Arista secret sauce is a combination of smart software and less expensive components. The combination of computational intelligence and more commoditized pieces translates to a high performance device at a price the Microsofts, Yahoos, Amazons, and Equinixes of the world will find attractive.
Two New Animals: Newsosaur and Yahoosaur
October 22, 2008
Alan D. Mutter’s “Reflection of a Newsosaur” is a very good Web log post. You can find the Web log at http://newsosaur.blogspot.com and “Fat Newspaper Profits Are History” here. Mr. Mutter points out that newspapers are going to have to live with declining profits. He cites a number of papers that have debt that adds to broader sector woes such as declines in sales and circulation. He does a solid job of explaining the interplay of certain cost factors for publishers. His analysis does not apply just to newspapers. Any book, magazine, or journal publisher cranking out hard copies faces the same set of problems. The data in this article are worth saving because he has done a better job of identifying key figures and metrics than some of the high-priced consultants hired to help traditional publishers adapt to today’s business realities. For me, the keystone comment in Mr. Mutter’s analysis was:
Although the economy will recover in the fullness of time, there are very real doubts about whether newspapers still have the time, resources and ingenuity to migrate to a viable new financial model to assure their long-term survival.
After reading this article, I realized that traditional publishers, not the author of the Web log, are Newsosaur. What also occurred to me was that Yahoo is becoming a high profile Yahoosaur. As a 15 year old Internet company, Yahoo’s management faces problems that its business model and management pool cannot easily resolve.
Keep in mind that newsosauri are trapped in the dead tree problem; that is, a fungible product in an environment where young people don’t buy newspapers or read them the way their parents and grandparents did. Advertisers want to be in front of eyeballs attached to people who will buy products and services.
Yahoo may be the first identified Yahoosaur. The company’s financial results and the layoffs are not good news. The deal with Google may be in jeopardy. Yahoo’s home run technology plays like the push to open source and BOSS may not have the traction to dig the company out of its ecological niche. I think the Yahoosaur and the Newsosaur are related.
Mr. Mutter provides a useful description of the traditional publishing company woes. Perhaps he will turn his attention to the Yahoosaur.
Stephen Arnold, October 22, 2008
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