NI-Limits Blog

Knowing it’s been quite sometime since we discussed the Search Giants (Google, Yahoo and Microsoft), we figured it best to keep you posted on all three within a single culminated update covering the months past since Microsoft made their unsolicited bid for Yahoo.

The first thing we noticed was that Microsoft did not only bid for Yahoo, because on March the 7th, TechCrunch reported on a bidding war that started with Google over the popular Digg platform:

Digg is prepared to take less than the $300 million Allen & Co. were floating late last year. Google, our source says, will likely bid $200-$225 million, which Digg would likely accept.

Microsoft is looking at a somewhat lower price. That makes sense, since most of Digg’s revenue today comes from a three year advertising deal that Digg signed with Microsoft last year. That deal has revenue guarantees - and Microsoft may be hesitant to value Digg based on revenue that they supply.

Any sale is likely to give Microsoft an option to terminate that advertising deal, which means Google isn’t valuing Digg based on revenue, either. But it is a big slap in the face to Microsoft to steal Digg away, and Google can certainly generate revenue on all those page views.

Despite rumours of packing it in, Yahoo made several interest new developments over the last few months, with Search Monkey being the most important of those and one that certainly brings a bright shinning light to the end of a very, very long tunnel (as reported by TechCrunch):

Yahoo will soon be allowing third parties to enhance the Yahoo Search experience. The new platform, codenamed “SearchMonkey” and officially called Open Search Platform, will consist of a set of APIs that allow third parties to modify search results on Yahoo by adding images, structured data and additional deep links.

The altered results can contain far more information than the current link and a bit of text from the website. For example, Yelp (a user generated local business review site), one of the launch partners, will include a photo, review information and the address and phone number of the business.

As if one could not do something without the other following-suite, TechCrunch also reported on Microsoft’s step forward into the world of OpenSource freedom:

Microsoft is providing a covenant not to sue open source developers for development or non-commercial distribution of implementations of these protocols. These developers will be able to use the documentation for free to develop products. Companies that engage in commercial distribution of these protocol implementations will be able to obtain a patent license from Microsoft, as will enterprises that obtain these implementations from a distributor that does not have such a patent license.

While Microsoft is not open-sourcing its own software, it is taking dramatic steps to play nice with the open-source community. This is a complete 180-degree turn from its stance of the past. The broad set of interoperability principles it is announcing today will apply to the following products (including future versions): Windows Vista (including the .NET Framework), Windows Server 2008, SQL Server 2008, Office 2007, Exchange Server 2007, and Office SharePoint Server 2007.

The four principles it is declaring are:

(1) ensuring open connections
(2) promoting data portability
(3) enhancing support for industry standards
(4) fostering more open engagement with customers and the industry, including open source communities.

It will release documentation for all APIs of the products above, will lay out how it supports industry standards, will create new APIs for Microsoft Office to make it easier for developers to create plug-ins for Word, Excel, and PowerPoint, and will launch an Open Source Interoperability Initiative to promote interoperability between open-source and Microsoft products.

Not forgetting Google amongst these developments, recent news from Mashable reminded us about their on-going bid to buy the spectrum waves of America several years ago (or so it seemed), which just now appears to have come to an end:

By their own admission, they were aware that the chances of them actually winning the bid were slim, but they had to push it to $4.6 billion, since this price would “trigger the important “open applications” and “open handsets” license conditions.”

To do this, they had to use every trick in the poker book: they were “prepared to gain the nationwide C Block licenses at a price somewhat higher than the reserve price,” and they raised their own bid even though no one was bidding against them “to ensure aggressive bidding on the C Block.” Well played, G.

If Google were willing to bluff their way through a bidding war over spectral fields of invisible light, it has to make one wonder what they would be willing to do in other situations yet to arise…

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Avoiding "the incident", we thought it best to give a general Yahoo Update, where old new we had left sitting on one side where back in January, Yahoo had to cut 1,000 jobs now seems like something best not mentioned. At that time, the Download Squad mentioned:

Yahoo! CEO Jerry Yang, maintains that the company will be focused on three goals: becoming the launching pad for consumers on the web, making Yahoo a top choice for online advertisers, and opening Yahoo!’s technology to third-party development. To that end, Yahoo’!s focus has narrowed to search, mail, news, finance & sports (services always in demand).

Funny when you read that now, but nonetheless, let’s not forget some recent innovations from Yahoo, including integrated delicious-tagging directly in the Yahoo search results, as reported-on by Michael Arrington, not to mention the heart-pumping article by Erick Schonfeld that delves into the possibility of what would happen if Yahoo Search became an OpenSource Framework:

Yahoo is between a rock and Google. As Yahoo’s board decides today whether or not to accept Microsoft’s $44.6 billion offer to buy the company, we’ve argued that it really only has two choices: accept the inevitable and go with Microsoft, or outsource search to Google. Both, are in their own way, admissions of defeat and riddled with potential problems. There is another option to consider, though. That is to hit Google where it hurts by truly opening up search. I will explain what I mean below, but first let’s go through the two obvious options.

Giving up search to Google might boost profits in the short term—because Google squeezes more than twice as much money out of every search—but it would set Yahoo on a long-term path towards oblivion (see, AOL). Merging with Microsoft is clearly the better option, but it may not be enough.

Which comes back to the question of how does Yahoo, or a combined Microsoft-Yahoo, make inroads in search. Every quarter Google adds to its market share in search. It seems unstoppable. Combining Yahoo’s and Microsoft’s existing search efforts won’t do much to reverse that trend. After all, two dogs don’t make a right. But there is a long shot Yahoo can try that could just turn things around. That is to open up search in a radical way.

The only way to fight Google is to use its own weapons against it. Google enters new markets by embracing open standards in areas where it does not currently compete. But when it comes to search and advertising (how it makes money), it is a black box. If Yahoo were to truly open up search, it could rally the efforts of hundreds of thousands of outside developers to take on Google on a hundred thousand different fronts.

While it is debatable whether or not they would collectively come up with a better algorithm than Google, they most assuredly would come up with better algorithms—better search engines geared towards specific types of searches (informational versus transactional) or particular niches (health, travel, business). Entrepreneurs could also use Yahoo’s index as a foundation to create entirely new ways to search (semantic, social,etc.). And over time, Yahoo could cherry pick the best of these and incorporate them into Yahoo’s official search engine, or simply sell search ads on thousands of different search engines across the Web. Imagine each Website, with its own customized search geared towards its audience. This has been tried before but has failed for several reasons.

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Highlights Reagarding The Search Giants (Google, Yahoo and Microsoft)

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