Yahoo! throw in the towel.

26 comments

File this under 'managing expectations'? - 'Yahoo! gives up quest for search dominance'.

"We don't think it's reasonable to assume we're going to gain a lot of share from Google," Chief Financial Officer Susan Decker said in an interview. "It's not our goal to be No. 1 in Internet search. We would be very happy to maintain our market share."

Danny Sullivan is quoted, and has his own post at SEW - Yahoo: Not A Goal To Overtake Google In Search Market Share

Again, Decker did NOT say that Yahoo was uninterested in search nor that they thought they were number two in terms of quality. She was speaking about market share and how Yahoo didn't plan to overtake Google in winning users away. But point take -- saying your goal isn't to be number one in one particular area can spill into others.

Comments

Sad.

Despite all the disclaimers, that statement by a Yahoo representative is pretty sad. Losers. They are defeated in their own minds before they have even started and this is the kind of attitude that keeps ones staff in the comfort zone instead of striving for excellence. If they don't believe in their product why should I?

Also their timing is terrible. Just when Google seems to be slacking on the search quality, Yahoo takes a fall. This is when they should be pushing.

Yeah. On the other hand,

Yeah. On the other hand, Yahoo quietly goes about its business, taking up and presenting issues and services as and when it will. It's early, so this is a little fuzzy, but:

- Google causes a stir among authors and librarians regarding unauthorized copying of copyrighted works
- Yahoo announces an agreement *with* librarians re presenting various works

- Seems like every search/media service in the world is trying to buy up ISP space/media content (movies, etc).
- Yahoo (yep) has been an ISP for some time, and set up a branch here in Los Angeles for ... you guessed it.

- Some search services are trying to provide other services to encourage returning customers
- Yahoo has been doing this for Web eons.

All this, at a time when media is converging: movies are being brought to the Web, computer manufacturers are making monitors that can display TV and vice versa. Heck, my TV, Internet and phone are all delivered by cable.

So, even though we're fairly well focused on search, there is another picture emerging which is evident by the scrambling of large companies to provide/acquire/whatever other media, services and product. I don't believe it will all be based on search.

Well...

Yahoo search's already better anyway. that's what counts, not the number of users using the product....at least from a user's point of view.
They're probly not number one here but they are in every search related product should it be news or music, should it be in leading search experience with My Web....

The stupidity is what was said, not what they're thinking...

One has to be aggressive in business, but one also has to be realistic. It is not realistic for Y to think that anytime soon they will overtake G in search market share. Doh!

G has momentum, they have captured the generic highground in search ("I Googled 'widgets' to learn..."), their brand image is the only one of the major three SE's that is primarily associated with search (Y and MSN have become mega destinations and entertainment vehicles; Google still = search in most consumers' minds, with a few bells and whistles hung around the edges).

As long as the quality of search at the big three is equal (or G leads), then G's search oriented interface and brand personna will allow them to dominate search market share.

Y knows this, and as DianeV outlines, has chosen a different path. (An arguably more sustainable and stable one, at that, since a new better SE focused purely on search could displace G in three years or less...but no one is going to easily displace Y or MSN in their non-search offering areas.)

IMO, the only stupidity here is that Decker said what she said. There is a grand difference between thinking a thing, and saying it publically. Saying a thing the way Decker did allows their corporate wisdom and strategic savvy to be misinterpreted as something weak and negative. Ooops.

Good points, caveman.

Good points, caveman. Excellent points.

Exit Stage Left

This does make the exodus of a lot of high profile people at yahoo make a lot more sense.

#2 isn't such a bad place

You can make a lot of money being #2 and take a lot less industry pressure than #1

Besides, Yahoo is a lot more than search and as far as I can see they are about the #1 broad spectrum destination on the net.

On the flip side, that's just a real stupid thing to say out loud.

I can't find a link at

I can't find a link at present, but I'm sure I read a recent report online where investors lauded Yahoo!'s focus on monetising broad services, while criticising Google's effective sole reliance on search.

In such a context, Yahoo!'s comments make a lot of sense.

The only thing that makes

The only thing that makes sense to me is that Y! is going to abandon their bought Inktomi technology and start using Google again. Why else would they deprecate their own infrastructure?

Actually, I see this as a

Actually, I see this as a positive thing. Yahoo is #2 and they are ok with #2. Why fight for #1? Will it really gain them that much? Yahoo, it seems has a different user base than google anyway. Why not cater to that user base and keep them happy..who cares where you are in "the rankings".

Why else would they

Why else would they deprecate their own infrastructure?

Perhaps they feel that Yahoo! as a whole is undervalued and they want investors to see more value in other parts of Yahoo!'s business?

I'm sure I read a recent

I'm sure I read a recent report online where investors lauded Yahoo!'s focus on monetising broad services, while criticising Google's effective sole reliance on search.

i was watching CNBC yesterday, and the analysts had an interesting take - essentially their idea was that Yahoo was more defensible, and therefore a better value than Google based on three factors:

- Yahoo's search results are "closing the gap" with Google
- Yahoo has a much broader, already monetized product offering
- Yahoo is better-positioned regarding mobile services

to caveman's point, all the analysts did touch on the point that Google has a very important branding lead. one analyst said he "couldn't remember" the last time a technology had been so rapidly integrated into the cultural lexicon, and ended up as a verb....

"We're number two! We're

"We're number two! We're number two! We're..." I don't think that works.

Saying you are not as good as the top dog is the equivalent of calling yourself a loser. Everybody who is serious about competing tries to be #1, otherwise it is like saying "we are not good enough to be #1."

Seobook, I can't see investors being thrilled about a public capitulation.

They may have just said, "we suck, go use google". Look at the negative spin that's been put on the above comments, it is all over the net.

They must be dumping Inktomi.

manipulative strategy or not...

if i was in charge of Y search there'd damn well be PILES of broken chairs out on the corporate lawn --Balmer would lose his place in office-chair history.

No Guts No Glory

If they can't stay the course in search after only a couple of years what else will they just fold on? Don't look at Wall Street for guidance, those guys are all weak kneed, can't see past the next quarter and would eat their own young for a short term gain.

Y's big problem is the way

Y's big problem is the way the present, or brand, themselves. their message is not clear. (case in point: the yahoo homepage). this could be a step in clarifying this message.

Why fight for #1? Will it really gain them that much? Yahoo, it seems has a different user base than google anyway. Why not cater to that user base and keep them happy..who cares where you are in "the rankings".

totally agree.

this is PR

i see this "admission" by Yahoo as damage-control with Wall Street. after your company sees around 5 BILLION DOLLARS in wealth and stock holder value dissolve like a fart in the wind as a result of missing the street's estimates by a penny, you look to shore up your losses, and differentiate yourself from your biggest, sexiest competitor - big G.

show everyone that your business is so mature that you don't have to rely on search dominance. show them that your business has legs beyond the volatile and subjective area of SERP "relevance".

IMHO, Yahoo's admission that being #2 in search market share doesn't bother them is not an admission of failure or an indication that they'll be spending less time or money on their search product. it's just a way for them to deflect some negative ink they've recently received and keep the street's analysts from getting sharky when they see the Y ticker symbol....

I would have said something like

Or she could have said

"Search? search lost importance when the indexes hit a few billion pages. Have you searched for anything on pure search engine lately? It's terrible. Lots of spam, wasted time. The money's in relevance; serving users what they actually want and look for on the web. Yahoo! isn't interested in being #1 for raw search numbers that don't have any significance. We are looking to add value for our investors and customers, and in that arena, we believe we will rank at the top."

Maybe.

Inktomi

The Inktomi building is about a mile from my house and we saw what looked like an entire empty floor lit up the other night when we drove past it, maybe they rented that floor, who knows.

Here's the "FUTURE HOME OF INKTOMI" which is this massive complex they built during the DOT BOMB days and was never occupied by Inktomi.

It's now most well known for the Baja Fresh burrito joint that moved into the corner of the ground floor and for a long time appeared to tbe the only tenant.

YahOOOOOOOOooooooooooo........

Spinning a Yarn

Maybe they're just spinning a yarn to keep Google away from what they're really up to.

no opinion for now

I think I'll wait a day to see if anything comes out of Yahoo's mouth regarding the interview quotes. For all we know she could have talked for five minutes about the differences and the guy pulled out three sentences to give the article some flair.

Maybe Yahoo doesn't want an influx of Google's users who will just search and leave Yahoo within a few seconds and only return when they want to search again. Could ruin their time spent stats. Don't bite me for that comment just tossing out a theory.

Time spent = more money

Yahoo CEO Terry Semel has a clear agenda for his company–it's all about content and creating a personalized environment in which users are more deeply engaged with the Yahoo's offerings. It's not just about page views or unique users, but about how much time is spent by individual users on Yahoo's diverse services, Semel said during an interview at the Web 2.0 conference.

No Time Lost on Search

But time spent is different than the unique visitors or page views, which are usually used to benchmark sites and price advertising. Eighty-eight percent of Google’s unique visitors accessed its search site in June, compared to 55 percent of Yahoo’s unique visitors. The sites had 80 million and 118 million unique U.S. visitors overall, respectively, according to the report published July 29.

msgraph has a point

I think you're entirely right that Yahoo wants to be sticky opposed to Google's teflon strategy. However, AdSense was a brilliant move for Google in that they could profit from other sites stickiness so now that Yahoo is entering that fray with YPN it's going to force Google to come up with some new tricks.

Ok - all together - sing after me....

http://www.ysearchblog.com/archives/000239.html

Looks like Yahoo! are now distancing themselves from those remarks......

Better

>>http://www.ysearchblog.com/archives/000239.html

That rebuttal is much better leadership on the subject and is what should have been said in the first place.

3 principles of offensive marketing warfare

...which yahoo has apparantely given up on
1. The main consideration is the strength of the leader’s position.
2. Find a weakness in the leader’s strength and attack at that point.
3. Launch the attack on as narrow a front as possible.

1. G is a VERB for search - tough to compete with
2. Folks at Y got more time to figure weaknesses in G's strength than me, but I'm sure they're workin' on it.
3. This is exactly what G did to become the verb for search.

nice reminder, stntdubl.

Thanks for the reminder. I actually think #2 was plenty do-able last year as G lost its freshness. A grass roots blogger campaign to "google yourself" with an eye towards noticing how you rank in Yahoo and don't show up in G would have made the point. But then what alternative would there have been as a verb? Yahoo yourself?

Nah.. the "A" lis talking heads were already in G, and everybody else would just raionalize how G would catch up with the next update.

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