June 19th, 2007

To Beat Google, Yahoo Needs To Change The Game

by

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”)

Comments (25 Responses so far)

  1. Marketing Pilgrim reports on a recent court case that may have far-reaching consequences. Positive thinking is for the birds! Search engine land reveals the 20 fatal mistakes of SEO. Superb post and comments from Publishing 2.0 on how Yahoo can beat Google. How much do you know about SEO? Take the SEO quiz at Yack Yack and find out.

  2. 12:50 PM [IMG] Scott Karp / Publishing 2.0: To Beat Google, Yahoo Needs To Change The Game

  3. Yahoo faces the same problems today that it has for years, and neither Yang nor Decker were out of town on vision quests during that time. So where to take the good ship Yahoo? The first thing, says Scott Karp at Publishing 2.0, is to get out of Google’s wake and look for less exploited territories. You don’t catch up with a faster ship by steering the same course.

  4. Yahoo faces the same problems today that it has for years, and neither Yang nor Decker were out of town on vision quests during that time. So where to take the good ship Yahoo? The first thing, says Scott Karp at Publishing 2.0, is to get out of Google’s wake and look for less exploited territories. You don’t catch up with a faster ship by steering the same course.

  5. company to the next level. Similarly, Semel couldn’t build upon his early success and adapt the Inktomi and Overture technologies to challenge Google’s algorithmic search and AdWords technology. Yahoo seems to think its future lies in social media. Maybe, it’s right. But, I remain convinced that the future success of the company depends on its ability to produce an advertising platform that is competitive with Google’s. For all the benefits of the social web, the spoils now go to the company that can

  6. I would turn absolutely every — every — piece of Yahoo into a widget any of us could export and use on our own sites. I’d take all the functionality there and enable people to enrich their own sites, to build on top of it. . . .” Scott Karp, Publishing 2.0: “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

  7. + Discussion: Publishing 2.0, BoomTown, paidContent.org, Breakout Performance, bub.blicio.us, DealBreaker.com, i-boy, Paul Kedrosky’s … and Digital Daily

  8. To Beat Google, Yahoo Needs To Change The Game

  9. Yahoo faces the same problems today that it has for years, and neither Yang nor Decker were out of town on vision quests during that time. So where to take the good ship Yahoo? The first thing, says Scott Karp at Publishing 2.0, is to get out of Google’s wake and look for less exploited territories. You don’t catch up with a faster ship by steering the same course.

  10. Publishing 2.0

  11. What would you do? My friend Andrew Goodman, in an open letter to Jerry Yang, was kind enough to offer a few suggestions. Do you have any ideas? What would you focus on? Universal search? Local search? Mobile? Social Media networks? Helping advertisers achieve a greater ROI? Flickr-like acquisitions? What are Google’s vulnerabilities? How could you capitalize on this? What will help restore shareholder value and the value of the brand in the eyes of the consumer,

  12. Is Google really that weak at the human side of things? PageRank is always spoken of as an algorithm, an automated process – but all that automation really does is distribute the decision-making around all the people who create hyperlinks. AdWords is an automated ad-booking system in the sense that you don’t talk to any salesmen, but the market is made by all the buyers interacting with one another. Google’s human intelligence and human relationships are external, invisible and distributed: I’m not sure that means they’re weaker than Yahoo!’s visible, internal ones.

  13. Seamus,

    You’re right that Google’s networked human intelligence is a strength — more so, I think, in the advertising platform, i.e. getting humans to optimize ROI through trial and error.

    And Google has come close to maxing out the potential of applying an algorithm to parse human behavior, i.e. creating links. But that has some fundamental limitationss:

    – Humans gaming the system
    – Being filtered through an algorithm rather than a community
    – Lack of explicit human judgement (rather than the implicit judgement of PageRank)

    Overall, Google is not very good at connecting people — witness Orkut vs. Facebook and Myspace

  14. [...] is the entire Yahoo story one of catch up to Google, as Sccott Karp writes today. According to Karp, Google has set ALL of the search advertising game rules with its [...]

  15. Google is weak at “social”? Yes, that was true. That’s why they bought YT… No rocket science there.

  16. GooTube (whoever you anonymously are),

    As with so many acquisitions, there’s little evidence that YouTube’s “social” strengths have had any meaningful impact on Google’s core products and services.

  17. What’s funny is that I thought this is where I thought Yahoo was going two years ago when they started buying web 2.0 sites like Del.icio.us and Flickr with strong tagging components.

    I’d assumed they were looking to build a “social search engine”. Searching on Flickr already blows away any image search engines on the web. The data about what links people are saving with Del.icio.us, and how they’re tagging them, should be invaluable to search algorithms (to say nothing of the fact that the links I’ve personally saved should rank higher when I do a search). Results from Yahoo Answers should show up. Data from MyBlogLog should be used. Etc.

    Maybe now that Semel’s out, they’ll finally execute on that.

  18. Scott: agreed. Google owns search, and uses that to increase attention to their other properties. Yahoo (or anyone else for that matter) needs to find a paradigm for using the web that is not search-based (like social/Facebook, although I’m not sure that is going to work).

    I also like Eric’s ideas above, and have been hoping for some time that Yahoo will somehow tie together all the various social components it has acquired to produce something that does better than what Google does (it doesn’t have to be search, in fact I hope it’s not).

  19. Scott,

    I agree that Yahoo’s out-Google Google strategy has failed miserably, and that they should pour everything into social media… But what do you think they should do, specifically? How about buying Brightcove now that they’ve got some good distribution deals going? Or perhaps throwing a life raft to the more web-clueless newspapers to increase hyper-local focus?

    Not asking you to play Karpstrodamus, just wondering what you would do as CEO…

    (Eric: Excellent points! Any thoughts on what they should do beyond low-hanging fruit?)

  20. Hmm …

    I’m sure the idea of Yahoo needing to acquire more social (read: human intelligence) is music to Calacanis’s ears. Mahalo.

    Unfortunately, neither Jerry nor Jason has a chance …

    Changing the game is one thing. Changing the search game vs Google is another. They’re getting slower in terms of product development (took them ages to do a good universal search) and many of their portal projects have failed miserably, but deep down everybody knows that they’ve won more than the battle … They’ve won the war.

    What’s needed is a game-shifting company who can come along like Google did and make the same kind of entrepreneurial and ground-breaking progress.

    That company will never be Yahoo.

    And as for Mahalo, I’ve got one word for ya: Wikipedia.

    ~G~

  21. [...] strategy for recovering lost market share has been to play catch-up. And to quote Scott Karp of Publishing 2.0, “Yahoo can’t out Google, [...]

  22. [...] RSS Feed ← To Beat Google, Yahoo Needs To Change The Game [...]

  23. Neither pursuing Google in search nor dumping more bucks into increasingly passé social networking will bring Yahoo! back with a bang.

    I agree that the human dimension is the wild card. People beget people; machines don’t.

    What everyone wants, and no one provides, is a Web-based, handy-dandy Faithful Assistant that’s your digital valet, wardrobe, chauffeur, secretary, concierge, and alter ego.

    A Yahoo! you don’t go to to do things, but one that you put on. That you take with you via your mobile. That is viewable on big screens or in your home or hotel room, via wireless.

    A Yahoo! that’s more than the sum of its data parts, but actually IS the community — the communities — that matter to you, in which you live.

    Start from the premise that there are a billion unsatisfied people online, and several billion more to come, and the investment to do this is chickenfeed.

    The more difficult part is rebuilding the Yahoo! culture, which is now all about advertising and content to support it, and nothing at all about serving the user first.

    Okay, Jerry, the ball’s in your court. Yahoo!’s your playpen again, as it was 10 years ago. Be creative. Have fun. Make your fans proud.

  24. [...] and it may well be the right time to stop trying to out-Google Google.” Wow, that sounds awfully familiar — probably just a [...]

  25. [...] Do you have any ideas? What would you focus on? Universal search? Local search? Mobile? http://publishing2.com/2007/06/19/to-beat-google-yahoo-needs-to-change-the-game/ networks? Helping advertisers achieve a greater ROI? Flickr-like [...]

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