Tim O'Reilly gives the following advice about Search...

So, my advice to Yahoo!: continue with your plan to outsource search to Google, just like you did before 2002, and plow those increased profits and reduced costs into your own innovation, strengthening the areas where you are #1, exploring new ideas that will make YOUR users insanely happy, and generally focusing on what makes Yahoo! great, rather than on what doesn't. That is, unless Microsoft makes you so good a deal for your search assets that you just can't say no. But either way, let yourself be quit of the destructive competition and focus on adding real value for your users.

In other words: play to your strengths.


Posted by jzawodn at May 25, 2008 12:40 PM

Reader Comments
# Pooya Karimian said:

I thought yahoo has 20% of the search market, how come that's not one of the strengths? to me it was yahoo who brought lots of users to google. i first heard about google and its search when yahoo out sourced to google.
i can see benefits of outsourcing ads on search results but outsourcing the search itself, i am not sure.
my suggestion would be try to it make search different from other competitors, if possible. i know hard to make it better.

on May 25, 2008 01:33 PM
# Deepak said:

IMO, those two posts are Tim's best in a long time. I agree with him on many levels, especially conceptually. Both Microsoft and Yahoo are trying to beat Google at Google's game.

IMO Yahoo has some very innovative ideas and people especially around media and content (delicious, flickr, Fireeagle), a wonderful open source approach, and with support of Hadoop, etc the ability to solve some very interesting problems. I wish Yahoo'd do that (and Microsoft too), instead of trying to out-Google Google.

The other part that resonated was the UNIX analogy. I hope the people at Yahoo who get the web (and there are many) think hard about that and get their voices heard.

on May 25, 2008 01:38 PM
# Carlo Zottmann said:

I fully agree.

Still, "Play to your strengths" will only work if you know what your strengths *and weaknesses* are, and means you might have to abandon some of your weaker products.

on May 25, 2008 02:06 PM
# pjm said:

I think making Google the #1 *and* #2 search sites on the Web goes too far towards forcing us to see the Web through a single perspective: Google's. I wrote about this last month: http://www.flashesofpanic.com/panic/002280.php . Having two strong search sites using different technology gives us two different views of the same scenery (the web) and the slight difference is what lets us see depth and perspective. Giving Yahoo's search over to Google again would be like agreeing to spend some years viewing the web with one eye closed.

on May 25, 2008 02:23 PM
# Eric said:

From a strategic perspective, I'd tend to agree.

Speaking strictly as a consumer though, the last thing I want to see is Google become a monopoly search engine. One can argue that they are now, but if Yahoo really hands over their search operations to Google, that'll give them what, a 90% share?

That just can't be good for anyone.

on May 25, 2008 03:52 PM
# Steve said:

I'm disappointed with Tim O'Reilly on this. There's Coke vs Pepsi. There's Windows vs Mac. There's Apple vs the rest of the gadget companies. There's Walmart vs Target. There's brief vs boxer (ha). Everywhere you look, there's competition. Sure, there's often a more dominant player, but that comes from out-innovating their opponents. Competition is a good thing for consumers and the government will be looking out to make sure all things are fair.

With Google as dominant as they are right now, surely and steadily taking all the search market shares, it seems like it's just the matter of time that they will have 99% of search or even 80-90% of gross online ad revenue. But with Tim came out and said we all should just give up, he sent a wrong message.

Yahoo may give up, but Microsoft won't. Google will keep tweaking their search for the better (they have done so about 450 times in last year), and that's a good thing.

on May 25, 2008 08:05 PM
# Unique Random Content said:

This seems good. O'Reilly =D

on May 25, 2008 09:18 PM
# MeMe said:

Look there is no victory line, there is no point once you cross it you have won and nobody else can win. That line does not exist. Sometimes it just seems like there is when one horse is ahead of the others.

It's a race that does not stop.

So the story a while back was 'Apple is only good at hardware they should switch to Windows and concentrate on what they do best'. If they did would that in hindsight have been smart? Windows PC makers don't make much profit but Apple does and it enabled them to make iPod without MS undermining it.

There is nothing Google do that Yahoo couldn't also do, but if you start thinking there is a winning line and you have lost then you will stop racing. Google will eat you for breakfast.

You are still defined by Google, whether you define yourself as "Google's major competitor" , or you define yourself as "we do what Google doesn't do well yet".

There's already far too much of 'lets copy google' and not enough of 'what is the best way to do it'.

maps.yahoo.com seems to have the settings of Google from a year or two back, which were suboptimal, so you aimed to copy a suboptimal solution? Why? Just because Google did that?...

on May 26, 2008 01:25 AM
# Charles said:

I always thought Yahoo's "strength" was taking simple basic services that users like and turning them into bloated Web 2.0 services that demonstrate advanced technology at the expense of usability, and drive away users due to excessive catering to advertisers. Like Yahoo TV Listings for example.
If Google is likened to Coke, Yahoo is like Jones Soda. Sure they make a great product, if a little niche. But once in a while, you buy a Yahoo Cola and when you take your first sip, instead of the cola you're expecting, it's changed to Blue Bubble Gum Soda, even though the label still says Cola. An innovative idea, but not likely to endear you to the customers.

on May 26, 2008 05:46 AM
# pwb said:

I don't think that makes any sense at all. Yahoo's search business is big enough that it can continue driving it. I don't see why Google-backed Yahoo Search would gain share. Yahoo's core search engine is "good enough" to compete. Now it has to layer in all the good stuff that Google has like movie times, airline status, fedex tracking, etc. And provide an AdWords competitor so that advertisers have a second option and can simply pick the venue that provides the best CPC or CP-action.

on May 26, 2008 09:34 PM
# MM said:

I ask Tim - and what to do to the current Yahoo! search infrastructure? Devalue it by incorporating it to Google?

on May 27, 2008 07:39 AM
# Andrew Goodman said:

Fred Wilson is also weighing in with this similar argument.

I can't agree! If Yahoo hands over search to Google, there is no effective #2 in search. Google's market share grows to 96%. Healthy? I think not.

The fact that Yahoo does have strengths in a variety of apps, verticals, etc. doesn't mean they should divest themselves of search, IMHO.

Maybe Google should outsource GMail to Yahoo Mail or Hotmail, because have you seen the market share numbers??

Yahoo needs to innovate in search, and yeah, get a little bigger. But outsource to your leading competitor? I can't agree.

on May 28, 2008 10:28 AM
# Joe Devon said:

If Y! search continues to be uninspiring and copycatting, then just cede it to Google.

But I know of people inside of Yahoo! agree with me when I say that Yahoo! needs some inspired teams working on creating some innovative search. Put your top people on it and let them do their thing. Combine that with the other project that makes Google what it is financially. Adsense. Offer a true adsense alternative instead of the pathetic copy that exists now.

Sooo many publishers are fed up with adsense. But YPN is worse!

on May 28, 2008 04:53 PM
# Andrew S said:

O'Reilly seems quite confused here. I'm surprised that he is, but I can see how that would happen given that 90% of the media are confused as well.

The media (as well as O'Reilly) seem to be conflating web search with search advertising. I haven't heard anything accurate in regards to any interest in outsourcing web search, and there's not much value in that so it makes sense that it's not really being talked about. Yahoo's web search is as good as google's (aside from one annoying thing, the giant redirect urls), and I continue to use it because it seems to be less targeted by SEO spamming than Google. I don't see any reason why Yahoo would consider outsourcing web search--it wouldn't save a huge amount of money and wouldn't make it any better or popular.

There are a lot of headlines that say "Yahoo considering outsourcing search to Google" but they really mean search ADS.

The relationship between search ads and web search is that the more profitable your search ads, the more distribution you can buy. Google can outspend every other company for search distribution because it grosses 2x or more per search than any other company (well, aside from the occasional microsoft live loss-leader deal...). Google could replace their web search engine with something as bad as microsoft's, and still retain their marketshare because of their enormous lead in advertising monetization technology.

Microsoft has far more interest in Yahoo's advertising technologies (i.e. Panama, Apex) than it does in Y! web search. They'd mainly be interested in Y! web search as a means of gaining distribution for advertising; the web search technologies simply are not worth that much.

It's a bit sad to say that web search marketshare is primarily a function of ads that make the most money, but that's the world that having all of the web search companies following the goto.com (ok, i used to work there) business model has given us.

The model that I have heard tossed around, serving the most profitable search ad (whether it be from Y or G), would be great for Yahoo. I don't see Y catching up in monetization any time soon, so they may as well earn the ~$1 billion/yr that they've been leaving on the table by not partnering w/G on search ads. However it's still way too valuable of a business to drop completely, so this competitive model is much better than a complete outsourcing of search ads.

on May 29, 2008 04:08 AM
# Keith Instone said:

I think the bigger message, bigger than search, is in Tim's phrase "focus on adding real value for your users". If Yahoo! focuses on user value, and the user experience that delivers that value, then it will tell Yahoo! what to do about search (and a lot of other things).

I see Yahoo! is hiring a technical evangelist. How about hiring a user experience evangelist (too)? Maybe not so externally focused at first - but getting user experience more baked into the corporate goals. Yahoo! has a lot of great user experience people (and I know several of them). Get them more involved in the corporate strategy.

Just for kicks, I decided I had better track down the Yahoo! mission (since I honestly had no idea what it might be). I found this:

Yahoo! powers and delights our communities of users, advertisers, and publishers - all of us united in creating indispensable experiences, and fueled by trust.


I also found this:

To connect people to their passions, communities, and the world’s knowledge.


Yeah, I know, mission statements often do not really mean much. The culture in which the company operates usually is the difference between a mission that is only a sentence vs. one that drives how the company operates.


on June 1, 2008 04:52 AM
# 360view said:

so spot on - yahoo need jack Walsh type of leadership , who change manufacturing company to service dynasty!

on June 12, 2008 01:15 PM
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