With Yahoo search gone, content becomes king
Yahoo's long nightmare is over, having finally offloaded its search business to Microsoft after years of rumors, negotiations and reversals. Now all it has to do is figure out what comes next.
A new era at Yahoo began the minute CEO Carol Bartz signed the paperwork turning over the right to conduct searches on Yahoo's huge network of Web sites to Microsoft in exchange for 88 percent of the revenue generated by Microsoft's Bing. Now Yahoo is first and foremost a media company, in the business of attracting as many people to its properties as possible in hopes of selling lucrative ad deals on those pages.
This strategy has not always worked on the Internet. Search advertising has been far and away the most effective way for advertisers to reach their audiences, and they have responded by pouring money into the coffers of the company that has best combined relevant search results and efficient advertising: Google.
But Bartz seems to have decided that Yahoo doesn't have the ability or the will to take on Google directly, arguing that the company should focus on what it does best and leave the technology to others. While that probably came as a bit of a surprise to the many engineers working on search technology inside Yahoo, Bartz hasn't exactly been hiding her intentions for Yahoo over the past eight months.
"We're not a search company," Bartz said flat-out in June, discussing how Yahoo is a different company than Google or Microsoft. Now that she's made that distinction official, what is Yahoo?
"It's where people find relevant and contextual information," Bartz said in May at the D: All Things Digital conference, clearly having envisioned a post-search Yahoo. "It's news, it's sports...home page, mail. It's a fabulous place."
That's a content company, turning the focus to how Yahoo should produce the kind of content and services that will keep existing users coming back for more and attract new ones to the site. Some began to wonder on Wednesday if Yahoo just turned itself into a bigger, purpler AOL.
On the services side, some areas, like Yahoo Mail, Flickr, and Messenger, are clearly where Yahoo is unlikely to take its foot off the gas pedal. Same for Yahoo's mobile strategy, a part of the Internet that is very much up for grabs, unlike the more mature PC-oriented Internet experience.
As Yahoo's new home page shows, the new challenge for a post-search Yahoo is a blend of content and services. Where will they come from?
(Credit: Yahoo)So Yahoo isn't getting out of the technology business entirely. Yahoo will continue to need ways to keep its new home page hooked into the wider world of social networking, real-time communication, and things we haven't even thought of yet, and that will require smart, savvy engineering.
But on the content side, Yahoo will have to figure out whether it needs to expand its current offerings, pare down some of the less frequently used products, or tap the outsourcing strategy in this area as well. There's been quite a lot of turnover in recent years at Yahoo, but there are probably enough people left who remember that the last time Yahoo tried to play a prominent role in designing its own content, it didn't end well.
Is Yahoo on a path to becoming the world's biggest content aggregation site? If so, there are obviously far more costs that can be wrung out of its various products: how many people are required to produce OMG!? Does Yahoo Sports need all those writers? Couldn't the company just hire a few people to keep the site filled with content from partners and save a boatload without sacrificing traffic?
Yahoo declined to make anyone available Wednesday to share the company's broad vision beyond its determination to make its exit from the search arena official. Shareholders, who clearly now understand that they'll never see anything close to the $33-a-share offer that Microsoft originally dangled in front of co-founder Jerry Yang, will soon be impatient to see the long-term plan, now that a search deal has been worked out.
There's enough guaranteed revenue in the deal to keep things quiet for a while, but it's going to take two years--at minimum--for it to substantially shape the company. What will Yahoo look like then?
I really do not understand...
Besides, "88 percent of the revenue generated by Microsoft's Bing" is a pretty sweet deal for yahoo.
I think that revenue is only if it goes through Yahoo's site.
Oh really? That's actually quite the opposite. Microsoft is notorious for dumbing down their OS and experience right out of the box. That's a nice paper clip and dog you've got helping you out there. How's that wizard doing?
Ever wonder why business lock down their computers so you have minimal function? 90% of the market equals 100% of the technically challenged.
Learn a little about technology before you spout your fanboyism.
Please tell me the last product to use the paperclip? Hmm? Come up with a modern argument please your is expired by 9 years.
OSX interface is dumbed down and thats a fact.
Windoze vs OSX? I'd have to say OSX is dumbed own. That may actually make it more stable, but it also makes it less capable.
@tech_crazy
True that. All I see out of this deal is that MS is better able to be Yahoo, than Yahoo.
If anything now yahoo gives wrose search results than ever before.
It all about the personal experience when it come to search.
Let's hope that some strong start-up competitors can arise to end the ever-increasing centralization of such services.
Your statement is unclear. Here's what's happening: Microsoft's Bing will power the searches provided on Yahoo!'s web sites. Microsoft will receive 12 percent of revenue generated by searches from Yahoo! sites; Yahoo! will receive 88 percent. Yahoo! will do the ad marketing for Yahoo! sites. All of this is for ten years.
Nice deal for them.
Still, they won't have that much luck when it comes to taking on Google.
1. yahoo does the work of selling ads
2. bing developes branding power with the greater exposure derived from yahoo sites
3. yahoo mail, calendar etc becomes live calendar emial etc (hotmail).
how to monetize those users? (which yahoo never really did)
hypothetically (and hopefully):
4. msft enables wireless syncing of calendar contacts email etc between portable devices and web without paying for a server service, via office 2010 outlook with its online component
5. users, even nonbusiness users, buy at least one office 2010 on one of their computers, therefore now even nonbusiness users have no reason not to use the hotmail email calendar etc and use bing and other added services, since they can sync the info with their phones or etc (the phones will have outlook).
AOL beat out BBSes, because it pulled content together and gave one-stop-shopping. However, AOL lost favor because the Internet gave more options, than just what AOL provided. However, where before I would jump around to many web sites to get all my content, now that content seems to be the same everywhere. There just isn't much diversity anymore. All the news feeds seem to have the same content these days. Five years ago I had over 100 bookmarks, now I rarely need to go to more than a dozen. So the auxillary features start to matter more.
Modern search engines allow us to forget the vast number of web sites out there by giving us that one-stop-shopping again. However, I don't think that one engine is vastly superior to the rest. The days gone by of trying your search on several sites is pretty much gone.
Yahoo may be able to pull off a good content provider, but I think they will still need to keep auxillary features to keep the users pinned to their site, and not just one bookmark among many.
And because we try not to engage in commerce with such companies, we will become a Microsoft/Yahoo-free enterprise as there are alternatives developing.
I love how you spit this argument around but no one ever throws in the facts to prove it,
They have a string of offenses and have had to pay out many billions of dollars in fines and lawsuits.
Where have you been?
However, there will always be a small number of people who prefer the "old design," these people like it "retro" and don't like the new changes that come out every few years or so
Why not allow an option for users to choose older homepage designs, I'm not talking about the "My Yahoo" customizable webpage, that's already good, but I'm talking about letting people keep their favorite homepage the same way it has been forever, and how they like it. I don't know how much money it would cost to implement this feature, but looking at it from a guy who doesn't have a computer science degree, it shouldn't be a problem to route the content to a different template, and each homepage design you could just make the content plugin neatly into their new spots. I don't know the logistics of this but just a suggestion.
Anyways, if Yahoo has better content, media, and sources than iGoogle, Google would have a hard time catching up to your web portal/homepage. Yahoo Answers is the best social networking, Web 2.0, knowledge database website. I like how Yahoo provides their own exclusive and in-house media content and news as well. I don't know what the future will hold, but Yahoo is surely an Internet media powerhouse today. A homepage/web portal is supposed to be the one and only place where you can get nearly EVERYTHING on the internet and do EVERYTHING you want to do.
1) Internet services (email, instant messaging, twittering, chatting, social networking, etc.)
2) media / news (entertainment, news, music, video, advice, etc.)
3) Consumer services (shopping, ads, autos, etc.)
There are many more of these services and features and the key is probably to have them come from in-house and be exclusively available to Yahoo only. If only you have good content, more customers will come to your website.
On Microsoft and Bing search engine, I think working together with Microsoft will help Yahoo get a better search engine than Google, and word of mouth and advertisements should take away the market share. Google once said that competition is only one click away, and that's true in a sense. There are very low barriers to entry for Internet search engines. Yeah, Google is dominant today and "googling" has gone into the dictionary as a word, but Ford and GM were dominant too, and look at how many barriers to entry there are in the automobile industry, the Japanese automakers still defeated them eventually through decades of hard work and making good quality cars.
The Internet is a different beast, and it won't take decades, it can be years to topple a king. Facebook toppled MySpace in the number of users, Firefox is gaining on Internet Explorer, I can go on and on,... Microsoft is less of a threat to Yahoo because I can never see Microsoft becoming an Internet media company, they have MSN and it is a web portal that competes with Yahoo but their corporation is so diversified, it's hard for them to focus on 1 industry and do a good job. Microsoft is a potential future threat to Yahoo, but today Google is a bigger threat, their company is entirely Internet-based and was born from the Internet. Google's territory is directly related to Yahoo's territory, believe it or not, Google is trying to dethrone Yahoo and Microsoft now.
They have always been a scared company.
I remember when a Yahoo CEO once said "Never ever compete with Microsoft". Well Google competed and they deserve their success. Yahoo missed out because they were too scared to compete.
Worst still, on 2 occasions, Yahoo had the chance to buy Google. They turned Google down twice, saying, "we don't need them". This shows their other big problem. A lack of vision.
Now all Google has to do is make Microsoft irrelevant. So far I think they have done a great job, but the job is by no means complete. Microsoft is still a dangerous company for Google.
Good point.
Perhaps my comments are a bit harsh.
I love my local paper but the online version stinks - incomplete, slow response, no ads (which is one of my favorite things about the local paper.
Wouldn't it be nice to link to local news anywhere in the country from the Yahoo main site after reading national and world news! Just need to partner with big city papers and mandate a consistent format.
I love my local paper but the online version stinks - incomplete, slow response, no ads (which is one of my favorite things about the local paper.
Wouldn't it be nice to link to local news anywhere in the country from the Yahoo main site after reading national and world news! Just need to partner with big city papers and mandate a consistent format.
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by snumpkins
July 31, 2009 6:05 AM PDT
- Here's an idea for Yahoo: Local News.
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Reply to this comment
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Showing 1 of 2 pages (42 Comments)I love my local paper but the online version stinks - incomplete, slow response, no ads (which is one of my favorite things about the local paper.
Wouldn't it be nice to link to local news anywhere in the country from the Yahoo main site after reading national and world news! Just need to partner with big city papers and mandate a consistent format.