NI-Limits Blog

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.