June 19th, 2007

To Beat Google, Yahoo Needs To Change The Game


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”)

  • 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.

  • 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.


  • 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?)

  • 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).

  • Eric

    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.

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