Wednesday, September 14, 2005

Yahoo! let Google in the game

Unfortunately for Yahoo! they slept during class just like Microsoft, when talented young Google showed up on the search scene in September 1998. Maybe that's the wrong term, it was actually more like they were awake and invited the new classmate welcome. Back in those days, search was just something you should enable as a portal, but not really so important, that you would necessary create it inhouse.

Yahoo! bought search in town, I believe it was Inktomi back then, which was later acquired. Google came along and were setting new standards. Yahoo!s legendary founders David Filo and Jerry Yang liked what they saw in Google's search quality and even encouraged Google's founders Sergey Brin and Larry Page to start up Google as a company and expand their search engine. Yahoo! even helped finance the two search engine founders with venture capital. As a Yahoo! shareholder I just didn't quite get it. Since search was the number one activity on Internet from the very beginning of graphical WWW around 1994 and still is, it just seemed dangerous to let someone else become a leader in this category. Not that Yahoo! was doing search themselves, as mentioned they were buying the service in town, but why help someone, that could become a big name and potentially expand to other areas? Obviously easy to say today, but I remember that specific feeling and a sense of fear for my Yahoo! investment.

Google now has a market capitalization of $84 billion, while Yahoo! stands at $47 billion. Google has exactly expanded to other areas - Gmail, Froogle, Google News, Google Desktop, Google Earth and many more (Google is King Of Beta;) putting Yahoo! under a lot of pressure. It really must feel bad having helped Google to start out, and then be overtaken. Google however, was also clever and lied about intentions. Eric Schmidt kept saying that Google would solely focus on search - always - yeah right ;). Maybe you can tweak it and say, that all their products are in fact search related - Gmail searching through your mail and serving relevant text ads. This way everything soon becomes search related.

Today these two search players are #1 and #2 in the game - with Google as a clear #1. Yahoo! is trying hard to catch up, and people familiar with the technical aspects of search say, that Yahoo! has made more hardcore advances than Google the last 1½ years. Amongst others:
  • Enabling RSS and XML
  • The recent announcement of 20 billion odd webpages indexed while Google is at 8 billion
  • Audio search
  • Video search
  • Personalized search

Google has spend a lot of their time going into the usual "portal products", which might have taken focus of some areas of search. Apparently they still spend 70% of their time improving their core search, but it will be interesting to follow. More important than true search quality is though perceived quality. As long as the public perceive Google to be the best - they will use Google. However, long term perceived quality should follow true quality.


Lars said...

Hej Anders
Bare for at irritere skriver jeg en kommentar på dansk. Jeg har ikke indsigt i de emner du behandler til at komme med kommentarer. Men jeg har kigget en del på fænomenet at "blogge". En slags interaktiv hjemmeside? Er det rigtig forstået? Det kan jo være vældig interessant, men så kiggede jeg på og nogle af de sider der hostes der. Der var en del af dem hvor der bare stod " nå men det er så min hjemmeside" og så var der ikke mere i det. Så er der lidt mere kød på
Når jeg nu var igang så erfarede jeg at der er en del tjenester der ligner blogger, men i stedet giver plads til fotos. For eksempel Den skulle du tage og kigge på. Der er nogle fantastisk gode fotografer (amatører) der lægger billeder derud. Og det er noget enhver kan gøre. Man skal bare have et Yahoo-login, men det har du vel??
And this was the votes from the danish jury.
God weekend

MariusCaius said...

Interesting post, I did not know Yahoo was so naive. IT s good to know that in this corporate world some guys are still ready to let the competition kill them !!

Wong Online PoKér Hu said...

Well, that is the mistake called underestimating your competitor. Yahoo! probably thought it better to be complacent and confident with their level back then that there was no effort to innovate.