Search Box Hosted on Zooomr[I am Evangelist and CEO for Zooomr]
Taking Yahoo! forward – Yodel Anecdotal
Yahoo! CEO Terry Semel is out with a post today announcing significant strategic management changes at Yahoo! Yahoo! is reorganizing itself into three areas, Audience, Advertiser & Publisher, and Technology.
Over the course of the past one year Wall Street has punished Yahoo! brutally based on what some would suggest has been a series of missteps that have allowed Google and other competitors to seriously upstage the company.
Over the course of the past year Yahoo’s stock price has lost a little over 32% vs. a total return in the Standard & Poor’s 500 of about 14%. Google during the same time period has returned a little over 20%. An investor who shorted Yahoo! stock and bought Google a year ago would have a pretty handsome investment return today.
So the question. Are Yahoo’s steps announced today enough to turn the tide and fortunes of the internet company, or are the moves today yet more band aids being applied to more serious structural problems that exist at Yahoo! today?
My own opinon of Yahoo! has changed somewhat over the course of the past year. A year ago about this time I made a single prediction for 2006. That Yahoo! would buy digg. I thought Yahoo! would buy digg because I watched as Yahoo! seemed to be putting together more and more interesting pieces that could be used to create a powerful social search based company. By combinng the power of Digg with Yahoo! News. By integreating things like Flickr into image search. By geotargeting user search results for events by combining upcoming.org events with text search. By integrating a bunch of interesting relevant socially powered content into search I thought that Yahoo! could in some areas have smarter search than Google and make up for the fact that people seem to prefer Google over Yahoo! in general for search.
The problem is though that Yahoo! has not done a very good job integrating their various social network properties into the bigger picture. Still today, almost two years after Yahoo! bought Flickr you don’t have Flickr photos indexed into Yahoo image search.
If I do a search for Calexico on Yahoo! I still don’t get a link showing up on the first page to the entry on Upcoming.org referencing their concert here in the Bay Area in two days (something that should be very relevant to me if I’m in the Bay Area and looking up the band).
And of course Yahoo! likely missed out on buying Digg this past year. And if they want to buy digg now it will cost them far more money than it would have earlier this year.
Sure, Yahoo! put little delicious logos on Flickr pages. Sure, in a largely symbolic and PR move, Yahoo put flickr images on 4 different keywords in web search. But largely the vast power of the social networks that Yahoo has assembled have been unable to integrate the power of these social networks into search.
And so Yahoo remains a second best at best in what really was once the foundation of the company, internet search. And in the meantime Google is faster, Google is more relevant, Google’s web search layout is better and simpler *and* they now have mindset market share which will be very, very difficult for Yahoo! to get back.
In the meantime it would appear that the best that Yahoo can come up with the monetization of their social networks is the recent “camera finder” feature on Flickr that tries to direct you to Yahoo! shopping to buy a camera because a lot of people use it on Flickr. Personally I’d avoid Yahoo! shopping as much as you can. I almost got pretty burned by them when I found a company called PriceRitePhoto about a year ago who tried to rip me off on a camera. When my plight with PriceRite became perhaps the largest consumer vs. bad retailer story of 2005 (it was the number one story on digg for 2005, slashdotted, boing boinged, picked up in the NY Post and NY Times, etc.) and PriceRitePhoto was kicked out of Yahoo! shopping, it only took the sleazy retailer about 3 months to get back on Yahoo! shopping rebranded as Barclay’s photo.
By the way, if you want advice on where to buy a camera, don’t listen to Yahoo, just go buy it at B&H; Photo or Costco. You’ll get a very fair price, good service and won’t get ripped off.
So the question in my mind remains. Can Yahoo! truly deliver on the promise of social search?
Working against them are the fact that they are a large company with layers of bureaucracy that make getting things done difficult and that their technology very well may not be able to sustain integration. Is the real reason Flickr, for instance, has not been integrated into Yahoo! image search because Flickr can’t handle the load? Can Yahoo! build a fast enough, smart enough search engine that can figure out that I live in the Bay Area and then query upcoming.org for a concert of a band that I’m interested in and integrate it back with their other search results? Can their technology handle the task at hand?
In order for Yahoo! to turn the ship around they need to do one simple thing. Execute. And this is the biggest risk for the company right now. That they can’t execute. That they are too big and lazy and bureaucratic and political to really get anything done and to get anything done quickly. This is a risk for any large company. It’s a risk for Microsoft and Google too.
On the flipside, if the company can’t execute at least they are becoming more and more attractively priced to be acquired. Yahoo! still represents some of the best premium internet properties today and these are in fact very valuable. They have tremendous audience reach. They have a wonderful brand name. And they ought to be worth something to somebody somewhere out there.