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Is Yahoo holding a trump card?
Marcia




msg:826884
 3:45 am on Jun 11, 2003 (gmt 0)

In a thread posted earlier in another forum, teeceo began to look at how Google compares with the other leading search engines:

[webmasterworld.com...]

He was pointing out factors that indicate the continuing predominance of Google, and in starting to think about it to respond, I began to think about circumstances a year ago, when the discussions were quite different, with a lot centering on speculating about the expiration of the Yahoo/Google contract.

A lot has happened since then, and while Google remains leader in search and the focus of most attention, I began to wonder how much of a role and potential for influence Yahoo has, and whether we're doing ourselves a disservice by not turning some of our attention back on Yahoo (and Inktomi, possibly), particularly at this time, this year, just a few months prior to the Holiday season, known for heavy searches and more importantly, heavy revenues.

Responding to teeceo's remarks about Google pre-eminence, posting here because of focusing on Yahoo and what could be ahead:

teeceo:
#1. Yahoo: Simple, they use google db and there ppc deal with there partners(i.e. no google listing, no free traffic).

It's simple now, but the beginning of the Holiday shopping season is about three months off. It's up in October and explodes in November. It may not be so simple by then if we keep mind that Yahoo bought Inktomi.

teeseo:
#2. MSN: first 5 results are "FEATURED SITES", next 3 results are "SPONSORED SITES", finally, after all that comes your (PPI single page, sence they don't spider sites, just the page you paid for) now who is going to find you past all that FS/SS stuff? not many...

Ink still does spider sites, and many of us have pages in without paying. It may take a while, but it does happen. If we target keywords for which the Ink results aren't preceded by much else at MSN, there can still be some decent traffic, and those less competitive keywords and phrases are often very targeted and can convert decently.

It's true that MSN traffic doesn't compare with Google's, especially with AOL and Yahoo tacked on, but if - and it's a big if - Yahoo goes over to using Inktomi at some point, this will be a sorry Holiday season for webmasters who rely on seasonal upswings in their business, keep their eyes riveted on Google only, and didn't prepare ahead for "just in case."

MSN's potential for sending traffic doesn't compare with what Yahoo can do. And right now, as we speak, just a few short months away from heavy shopping season, Yahoo/SBC is aggressively promoting their DSL internet service with irresistible bargain prices, just as MSN did a while back with the rebates on computers.

The local computer stores constantly had new potential internet users shopping and purchasing during that promotion, every night. That was the chance for the not so affluent to get a bargain and be able to afford a computer and get on line. Newbies tend to use their default start page and quite often the search that goes with it. And they do make online purchases - especially expendibles.

Those newbies that MSN pulled online, and the AOLers as well - they're growing up now. Why should they pay $21.95 a month for dog-slow dialup when they can have DSL for $29.95 - and get a dynamite deal on the equipment? Just speculating, but what's to stop Yahoo/SBC from running a rebate special this year or next at beginning of the school year a bit before holiday season?

Let's face it - do people make a conscious choice to use AOL or MSN, or is it a default decision? Yahoo is accruing more and more default users of their start page(and search) as well, since the SBC deal, as the usual who deliberately search there. Darn good start page too, they're not making the same mistakes as MSN and AOL - they've done their homework.

Here's a thread from last year, before the renewal, speculating about whether Yahoo would renew with Google or go back to Inktomi. The outlook for Ink was bleak back then. It doesn't look quite the same since the Yahoo acquisition.

[webmasterworld.com...]

How does it all look this year compared to a year ago, with Yahoo quietly and aggressively edging in to try to pull away some of MSN's and AOL's ISP market share, giving search a predominance over the Directory and purchasing Inktomi? Could we be shooting ourselves in the foot by being blind-sided rather than thinking ahead of possibilities, however remote they may seem?

How long was the Google/Yahoo renewal for? When does it come up for renewal again? When they all sit down at the table to shuffle the cards again, is Yahoo holding the trump card?

[edited by: Marcia at 12:23 am (utc) on June 12, 2003]

 

tictoc




msg:826914
 10:35 pm on Jun 29, 2003 (gmt 0)

I recently bought some YHOO! stock. I think they are definately holding the cards- they are now a major broadband competitor (with SBC) for AOL and MSN. There is nothing that Y! cannot do.. Search, Briefcase, MY Yahoo, Customized News, Notepad. If people knew they would not use MSN (junk) or AOL. I just wished we knew how to optimize for Inktomi more because it may be the leader in search if Yahoo replaces Google.

netcommr




msg:826915
 10:54 pm on Jun 29, 2003 (gmt 0)

Search, although search matters to us so critically - search happens to be one of the services that pulls people. I don't believe that Y seeks increased market share, per se, quite so much as it seeks to increase its subscriptions, securing lifers.

so true!

They seem to be building the mother of all portals... Why do I need to go anywhere else on the web with all these services. I, as average web surfer, seem to have most everything covered at 1 place now. If a Yahoo employee thinks making "Search withing Yahoo and/or Yahoo owned/influenced properies" the DEFAULT search option NOT leave Search 'market share' a mute point, they may be on the wrong page at that company.

Is that a trump card or just truncation of the other players. Then you, as a webmaster/advertiser MUST pay Yahoo.

I think they bought Ink just so others may not be able to do the same.

davewray




msg:826916
 11:31 am on Jul 1, 2003 (gmt 0)

Frankly, I feel that Y! has too many "pokers" in the fire so to speak and is spread out WAY to thinly in SO many directions. Concentrate on one product and try to perfect it. Y! may have the money to try and compete, but G gets BIG points for trying to perfect one "product", its SE. You get nowhere in life trying to do dozens of things half-assed....

Dave.

redzone




msg:826917
 6:16 am on Jul 2, 2003 (gmt 0)

It has proven "Over and Over" again on the web landscape that "He who controls the entry way to the Web, controls the Web"..

AOL grew at an astonishing rate in the late 90's, while AT&T blew the opportunity to be the AOL of the web, by sitting on their thumbs watching AOL swallow up their voice LD consumer base.

Now MSN and Yahoo are pushing broadband services, and have the "Brand Awareness" to back it up..

A search engine is nothing, if people don't have it in front of them..

I think both Yahoo and MSN are going to continue to eat into AOL's market share in the US, as more subscribers "jump ship" as they upgrade from dial up to broadband.

Local cable providers also eat into AOL's market share, but have done a pathetic job, of converting users to change their browsers to the Cable Company's Portal, as a start page. I was dumbfounded when I switched to cable in '99, and they didn't force me to use their branded I/E browser. Major marketing blunder (Time/Warner)...

Where does Google stand in the mix? Other than providing search results for Earthlink and AOL, they would be shut out of approx. 70% of the broadband users, if Yahoo decides to "wean" themselves of Google. People can say what they want about search quality, blablabla, but Yahoo helped make Google what it is today. He that gives, can also take away..

Yahoo is the "Strongest" brand on the web, hands down. They continue to evolve, just when you say to yourself, "Yahoo is getting Stale".. Now MSN pushes hard.

Either Google directly partners with a "major" broadband provider, or their market share in the search sector will begin to decrease..

chiyo




msg:826918
 6:27 am on Jul 2, 2003 (gmt 0)

Marcia's comments on Y!'s inward strategy and Google's outward strategy was brilliant i thought. I would back google's strategy overall as it is more "distrubuted" on a media that is by nature distributed.

Ive speculated for a long time that Y!'s strategy is to get people so hooked on their free services (such as mail, Yahoo IM, finance, games etc. etc. ad infinitum), that come the time to monetize they have little choice but to pay up, epecially if they are dependent on these services working with each other - (think chat while playing games, mail checking in IM, games, finance email alerts etc), or they can keep basic services free but provide subscription premium services. Ive never thought that Y! is depending to a great degree on search, though the Ink acquisition gave me pause for thought intil i realised that ink technology was of more use than just soley web search.

Now comes the announcement that Y! personals are providing a massive amount of revenue for Y! (did I read 25%?)

Things get more fascinating everyday!

IanTurner




msg:826919
 1:12 am on Jul 3, 2003 (gmt 0)

I think that this discussion has missed one vital piece of the jigsaw.

At the moment the US market is the predominent market for the search engines but outside of the US, Google is still on the rise in comparison with the competitors. (For instance here in the UK Yahoo is an also ran)

With the ISP market the US is almost saturated and the big players are fighting over market share. Elsewhere in the world the market is much less saturated and still growing apace. The big US ISPs are losing out in the UK to the Telcos for the end user connections. AOL has spent massive amounts on advertising here and hasn't penetrated enough to get a significant marketshare. I suspect in other European countries and much of the Far East/Australasian market it is the same.

Yahoo didn't have a product to offer these companies until it bought Ink, Google and FAST have been leveraging this marketplace for the last couple of years. MSN/AOL have nothing to offer at all.

I see the purchase of Ink being of much more significance globally than locally in the US. It is a strategic and not a tactical placement.

We know that MSN is looking at its own crawler (maybe too late) but it does have the ability to leverage IE in its arsenal.

So if you look at a global picture you have four players trying to get the winning strategy.

Google - search provider to the masses, financed by AdWords and ISP deals.

Overture/AV/FAST - search financed by PPC, note how there are more international Overture sites these days.

Yahoo - search provider finance by US ISP, Directory and Ink PFI + PPC (Interesting if Yahoo puts its own PPC scheme together)

MSN - potentially search financed by M$, assume a PPC financed model in the longer term, with the ability to leverage the worldwide IE user base.

Who holds the strongest hand? (I haven't a clue)

Chicago




msg:826920
 1:53 am on Jul 3, 2003 (gmt 0)

Interesting, Ian. Thanks

For Y - International revenues in the first quarter of 2003 increased approximately $18 million, or 70% compared to the same period in 2002.

Yahoo's words, from their latest 10Q Quarterly Report [biz.yahoo.com]:

"A key part of our strategy is to develop Yahoo!-branded online properties in international markets."

"We believe that in light of substantial anticipated competition, we need to expand our operations in international markets quickly in order to obtain market share effectively."

"We have selected international markets that may not develop at a rate that supports our level of investment."

Is G's viral appeal that much stronger than the power of a monied and concerted int'l Y strategy?

[edited by: Marcia at 4:01 am (utc) on July 3, 2003]
[edit reason] URL inserted per member request [/edit]

rossH




msg:826921
 4:42 pm on Jul 3, 2003 (gmt 0)

Is G's viral appeal that much stronger than the power of a monied and concerted int'l Y strategy?

I think the answer today is, there's room for both yet, lotta pie in this world to be grabbed, we haven't even come close to the walls yet. Where are the limits, in terms of population and market share, where consolidation becomes the game rather than expansion, would we think?

nice information - so Yahoo does care for share. They had 2 million subscribers a few months ago, out of I think 100 million unique user base (may be twice that, don't recall). Conversion to subscriber is the overarching strategy, grabbing share is the necessary tactic of the day, I believe.

getting back to Marcia's trump card - yes it seems in terms of this discussion that Yahoo really is holding one with Ink, it's more than just a spoiler move, or at least they're certainly using it proactively, racing ahead with it really.

But also, there's more than one way to trump this game, and Google (I have always thought) is not really playing this game, it's playing its own game, happy I think to fail or succeed on its own technical terms.

What is the power of search in commerce? I always assumed (but I'm not a scientist) that the power of SE algo search was deluxe overkill for simple inventory management - so that for example Inktomi could deliver all of Amazon's inventory on a busy day in its sleep, without even breaking a sweat. Merchants, I figure, are riding first class if they can get SE power in their shop. Now it starts to look like the serious player has to have an SE at the back end just to realize the countless opportunities of the customer base.

I think Inktomi was the perfect back end for Yahoo - what's interesting now is to see what they do with it. Ink was always a little "in the box" to me, I'd like to see it be used in more imaginative ways, and Yahoo is starting to show us some great innovations: adding more granular search to its services, to deliver more product to sell, like candy at the checkout.

(Interesting if Yahoo puts its own PPC scheme together)

Overture developed a basic principle that covers all the cost of search engine development, unlocked the inherent profitability. Google has shown us some more great ways to monetize search, and Yahoo is now showing us even more, and no doubt MS will copy them all and put up its own lackluster but compulsory versions.

So is the way to win the game based on how well you can leverage the power and function of Search to draw income from the satisfied customer for life?

eatapeach




msg:826922
 9:33 pm on Jul 7, 2003 (gmt 0)

"And add to that the growing number who despise all things MS."

Two months ago I dropped Explorer for Netscape Compact 7.0.
Last month I dropped MS Office for Open Office.

In both instances I couldn't be happier.

When I get a new computer to replace the one I'm using now I will be dropping XP for Linux.

i'm sure i'm not the only one on this path.

dragonlady7




msg:826923
 12:40 am on Jul 8, 2003 (gmt 0)

When I get a new computer to replace the one I'm using now I will be dropping XP for Linux.

i'm sure i'm not the only one on this path.


I'm switching my Win2K box for an OS X one as soon as my savings permit, just like I switched AOL for DSL as soon as situation permitted. Just because something's in effect compulsory for large swathes of the market doesn't make up for it being an inferior product. As long as diversity is sustained so that those of us with the means to leave can do so, there's not much wrong with it. :-D I can't wait to make the switch.
So Yahoo can become as much of a portal as it wants; I'll still search on Google. (If they get their act together. )-: )

martinibuster




msg:826924
 2:04 pm on Jul 14, 2003 (gmt 0)

Overture. What a card.

Brett_Tabke




msg:826925
 2:44 pm on Jul 14, 2003 (gmt 0)

>Is Yahoo holding a trump card?

They just played it [webmasterworld.com].

This 42 message thread spans 2 pages: < < 42 ( 1 [2]
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