01/25/2006

Yahoo and the Future of the Web

Okay. Yahoo CFO Susan Decker stated, in SeattlePi.com, that:

"We don't think it's reasonable to assume we're going to gain a lot of share from Google … It's not our goal to be No. 1 in Internet search. We would be very happy to maintain our market share."

… and discussions erupted in SEO forums (well, in all three that I visited). The concensus was that Yahoo was crazy, stupid, "throwing in the towel" and/or positioning itself for a buyout, etc. Thing is, I think that's a very small-screen view of what (I think) is going on — one that's understandably a bit myopic given the "websites need traffic" focus. I'm going to take the liberty of posting here the response I posted at cre8asiteforums, with some further thoughts on the matter:

it's easy, as webmasters/designers/SEOs, to fall into a search-centric view of the Web — such that anything that suggests anything other than a one-minded focus on utter search dominance seems daft indeed.

But the Yahoo directory started out as David Filo/Jerry Yang list of bookmarks — eventually backed up by search results from AltaVista, then Inktomi(?), then Google. (Note that Yahoo now owns two of those companies.) However, even a cursory glance at Yahoo's home page shows a truly remarkable and broad set of services, many of them free, all of them useful — and reveals that Yahoo has not been entirely search-centric in years but, instead, has focused not on being "just" a search engine or a portal but on being, as Bill puts it in the cre8 thread, a destination.

I'll say again: recent months have seen a massive convergence of tech and media companies, with each ISP/tech/portal/search/media giant vying to acquire more tech, more eyeballs, more delivery methods and more media product to deliver. While many Web folk have remarked for years that "old" media "don't get the Web" — and thus have lost and are losing market share, eyeballs and influence — I think we're seeing every indication that they do now.

I've been watching the above for months, fascinated. It's difficult even to recall who is buying, or trying to buy, what.

At the same time, computer and television manufacturers are coming out with bigger and bigger screens/monitors capable of delivering both television and the Web. Is it not obvious that television and movies are coming to the Web, big time? Music is already here. So are books (though one hopes that e-book formats will become less proprietary).

These kinds of companies, with their current assets and with mergers, acquisitions and convergences, have the knowledge, experience and wherewithal to … well, you get the picture. Right? That is, if my guess is correct, the media/entertainment giants have noted that the audience has gone to the Web and, rather than fight it, they're taking their stuff to where the audience is.

As to Yahoo. It is easy, though myopic, to write Yahoo's comments off as those of a silly company backing down. I'd suggest that Yahoo is far from that. Yes, they may be no more perfect than the rest of us <grin> … but I'd suggest they've done ::cough:: quite well for themselves from their humble beginnings as a directory of bookmarks. Sayeth MarketingVox:

In this CBS MarketWatch piece, Terry Semel's road from Hollywood bigshot to Technology CEO is covered. His lack of technology experience caused question among industry analysts yet his remarkable turn around of Yahoo has been nothing short of amazing. Two years ago, Yahoo had become a questionable entity. Today, the company is rolling in revenues, 32 percent now coming from non-advertising related sources.

What? Did someone say "non-advertising related sources"?

It is telling that Yahoo located a branch in Hollywood, just as it's telling that Yahoo's Terry Semel just happens to be (aha!) a Hollywood insider. No Silicon Valley Web giant opens branches in Hollywood for no reason at all.

Yahoo losing out because it's not focused solely on search?

Nope. This ain't your normal "search is the only important thing on the Web" approach. Yahoo is not "just" a search engine. It's something more. I'd guess the future will show us just how much more.

One could laugh it off, or one could note the truly ironic (and business-smart) switch: a company whose beginnings sent droves of visitors to other websites has figured out how to keep those visitors and do something with them. Does it still sound stupid?

I'd suggest that, whatever you're going to do, do it now. As for me, I'm seeing more advanced technology and opportunities. I'm planning to expand into this. Gonna ride that wave.

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