Is Yahoo! Losing its Nerve? - Yahoo's Goal is not Google's Goal

If you're examining Yahoo!'s and Google's search engines, one point worth keeping in mind is that Yahoo! didn't even own its own in-house search engine until about two years ago -- no, even less than that. Until that time, Yahoo!'s search was powered by other companies -- including, at one point, Google. So in that sense, Yahoo! has come a long way in a short period of time -- but it seems to me that search is not necessarily Yahoo!'s biggest priority.

Many observers think it should be. Danny Sullivan, editor of SearchEngineWatch.com, sounded a bit bewildered when he heard about the controversial comments from Yahoo!. "It kind of makes you wonder about how serious they are about search," he said. He thinks that "It really ought to be their goal" to be the top search engine, "whether it's realistic or not." He may well be missing at least part of the point.

Jordan Rohan, an analyst with RBC Capital Markets, sees some of the problem. "In some countries, it's already game over in search, with Google the clear victor. Google's product development pipeline runs at such a fast rate that it's very difficult for any company, Microsoft or Yahoo! to catch up." It's not just about search anymore; it's about the products companies create that help people to use, share, find, and otherwise manipulate data. Even more importantly, it's about making those products pay, either directly through subscription fees, or indirectly through using the products as a platform for advertising.

Decker made that point in an interview after Yahoo!'s earnings were announced. "Our goal has been to hold our share and to be a leading, if not the leading, total marketing platform, which would include both brand and search." But Yahoo!'s own company blog makes the case even more plainly. Written shortly after the earlier controversial comments hit the press, the entry for January 24th was titled "Are you kidding?!" and worked to refute the speculation about Yahoo!'s commitment to being the best. It said in part that "We're continuously innovating and finding new ways to help people connect to information and knowledge -- part of our vision to help them find, use, share and expand all human knowledge. We're working on literally hundreds of projects to improve search..."

Yahoo! has built itself over a decade or so into an Internet portal; it has a lot more experience at this sort of thing than Google. That's no guarantee that it will get it right in the long haul, of course, but this could still turn into a tortoise-and-hare race. But then, why should Google try to be like Yahoo! -- or vice versa? That would be rather like saying that Apple should work to be like other computer makers to claim more market share. There's room enough, and customers enough, for two very different companies in the same field to find enough customers to stay alive and prosper.