In all the coverage of Terry Semel’s stepping down as Yahoo CEO to be replaced by founder Jerry Yang, there’s a standard reference to Yahoo’s failure to beat Google — and the implication that perhaps Yahoo can never beat Google. The main reason way Yahoo has lagged Google is that Yahoo has been trying to beat Google at its own game:

See the pattern here? The problem is — Yahoo can’t out-Google Google — and it’s likely that nobody can.

Google’s success is based on changing the nature of the game:

  • Search relevancy based on link patterns
  • Ad targeting based on keywords rather than demographics
  • Ad relevancy determined by algorithms
  • Automated marketplace for advertising

To catch up to Google, much less beat Google, Yahoo needs to change the nature of the game.

Here’s a hint: Yahoo should focus where Google is weakest — human intelligence and human relationships (i.e. “social”)