It’s all over the news - Yahoo doesn’t think they can be #1 in search. On the surface, this seems to be a bad idea - if you’re a search engine and don’t strive for winning search, what do you do?
Well, let me tell you what I think Yahoo is up to - because they are certainly not going to simply roll over and play dead. What they did realize is that it’s more or less “game over” in brute force search. Nobody does it better than Google right now, and they have the infrastructure and the research to keep it up.
So what do you do if another company dominates the market, and your chances of outdoing them are slim? You redefine the market, by explicitly focusing on the other companies main weakness. What is that for Google? Anybody who has used Google recently has found out that search results are not as high-quality as they used to be. SOEs - the Internet equivalent of spammers - game the algorithm as much as they can. They’re jockeying for page rank, and Google has a hard time fighting them off.
Yahoo must have realized that too. The only way to ultimately beat humans gaming the system is human-assisted search. And Yahoo used to be a directory of web pages, populated by humans. They realized that they can’t keep a high quality directory as a centralized effort, but there’s “social bookmarking”, or “tagging”. I.e. del.icio.us, which Yahoo coincidentally purchased a little while ago.
And not only that. They also bought flickr, a place to tag your pictures. They have Yahoo! My Web - and to be buzzword compliant, it is beta and 2.0. My Web is a place to tag web pages and save local copies - given the entirely transient nature of many web pages, a fantastic tool to organize your reference material.
And, lest we forget, there is “Ask Yahoo!” - sort of a “Frequently Asked Questions for the Internet”. I would not be surprised at all if half of their questions are planted there by Yahoo staff and informed by what they see as popular in the search engine.
And this is where Yahoo is heading - while Google capitalizes on information mining, Yahoo is focussing on collectively organizing information. It’s a very strong approach - Wikipedia already has beaten Google (in the encyclopedia market, at least) using the same approach. That’s not to say Yahoo is a guaranteed winner - but I think they are wisely choosing how to compete.
(Disclaimer: I do own Yahoo stock)
I indirectly use Yahoo! for stock quotes. I type the stock symbol in Google and the first result that comes up is always the Yahoo! finance page on it. This is an example where they both benefit each other — Yahoo! is superior at organizing information such as stock quotes, but Google gets me there faster than Yahoo!’s own site navigation.
I also use Yahoo! for sports scores but I keep a direct link to that.