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Yahoo Capitulates - Gives Up Goal of Being #1 in Search
Brett_Tabke




msg:824060
 1:18 pm on Jan 24, 2006 (gmt 0)

Bloomberg News [seattlepi.nwsource.com] interview of Chief Financial Officer Susan Decker:

"We don't think it's reasonable to assume we're going to gain a lot of share from Google," Chief Financial Officer Susan Decker said in an interview. "It's not our goal to be No. 1 in Internet search. We would be very happy to maintain our market share."

 

skibum




msg:824090
 4:11 pm on Jan 24, 2006 (gmt 0)

Why make a statement like that at all? If they are going to let search whither away, then just do that and focus on what you are going to do.

If you worked at Yahoo! search wouldn't a comment like that give you second toughts about working there? Well I've been working my @ss off for the last 5 years and now the company isn't even going to try to get better. Better start looking around for something else in case they start looking to save their way to higher earnings. If and when that happens, the bottom could really fall out.

It would be more refreshing if they came forward and admitted the problems with the technology, editoral process, etc. and said we're going to work on eliminating the bottlenecks for advertisers, fixing what you've told us is wrong with the system, dump the paid inclusion, not let $$$ influence the organic results or give the perception that it does, make a clear distinction between ads and search listings, and whatever else may adversely affect the search business.

There are lots of people who would like to see Y! succeed and it would be better for the marketplace, for businesses, for people if one company didn't serve as the primary gatekeeper to the worlds information. Get better, don't give up, Yahoo!

drall




msg:824091
 4:20 pm on Jan 24, 2006 (gmt 0)

I am glad its over, Yahoo seriously hurt many content publishers like us when they stopped using Google for search in Feb 04 and then turned around and spammed there index with so many paid ads that organic results are totally gone.

It was over a while ago, they are just breaking it down to the rest of the world/investors now so they can get all expectations out of the way that they will be in comp with G.

Judging from my networks logs Y and MSN have both been dying over the last 12 months while G has been growing well. That may not be a perfect representation of whats going on out there but after 8 years of this I know it is a semi accurate picture of the landscape. Yahoo is loosing and they just want the world to know so there stock doesnt tank down the road.

They should go back to Google Search :)

dclick




msg:824092
 4:24 pm on Jan 24, 2006 (gmt 0)

they probably realize their search engine is poor, microsoft is building their adcenter and are hoping microsoft doesnt pass them into the #2 spot at this point and they fall to number 3 by the end of the year.

Maybe if Yahoo didnt have such a hostile/arrogant tone towards webmasters and its own advertiers who have been so frustrated & disappointed over the years are finally giving up from its organic and pay-per-click service. After waiting a few days, "your listings have all been declined by us, do not reply to this, just keep trying", "Despite you spending over 100k a year with us and your sites being approved by human editors, in our organic serps division, which is another division and department within yahoo, your sites are banned, and if you dont like it to bad, just keep buying more clicks" type of attitudes.

Any kind of business that treats its customers so badly isnt going to be in business for very long. You know i pay-for clicks on their services and cant find 5 year old sites anywhere in the first 100 pages of the serps. MSN&Google at least give me a fair trade in the process and Im more then happy to spend advertising dollars with them instead. And I know for certain im not alone as all of the webmasters i speak with feel exactly the same.

Webmasters and website owners make a search engine and/or pay-per-click service successful. We spend the dollars, we tell our friends, family, colleagues, internet neophytes to "try google" if they need to find something. Why because google and even msn as well doesnt have a hostile attitude towards its own customers.

If yahoo doesnt change soon, the buzz webmasterworld 2006 in vegas will be Ya-who-cares.

Receptional




msg:824093
 4:26 pm on Jan 24, 2006 (gmt 0)

I have little doubt that the statement came from on high - she fell on a sword here.

I have heard Tim Mayer say the same thing on the podium. Perhaps in slightly more positive terms, but nevertheless, Yahoo are gunning for being a portal more than a search engine. What they may not have foreseen is that Google is becoming portal like faster than they imagined, so the distinction is rapidly become a marginal one.

europeforvisitors




msg:824094
 4:31 pm on Jan 24, 2006 (gmt 0)

If you worked at Yahoo! search wouldn't a comment like that give you second toughts about working there? Well I've been working my @ss off for the last 5 years and now the company isn't even going to try to get better.

1) You've got to remember that this statement came from the CFO, who was addressing a very specific audience and constituency. A message of "We intend to be #1 in search" probably wouldn't sit well with investors and business reporters who know B.S. when they see it.

2) Ms. Decker didn't say "the company isn't even going to try to get better."

3) Many businesses do well (and have loyal, motivated employees) even when they know they're unlikely to be bigger than #2 in a given field. Indeed, sometimes that's part of the motivation: It can be just as satisfying to chase a leader as to be the leader who needs to stay ahead of pursuers.

thaedge




msg:824095
 4:44 pm on Jan 24, 2006 (gmt 0)

If I worked for G or even MSN I would see this as a sign of weakness and would actually be energized to finish them off. Even if its just a misspoken person or a ploy, Id see it as a reason for G to work harder.

When in a fight and those your fighting is on the ropes you have to go in for the finish.

Yahoo went from 27% to 19% while G went from 47% to 60% (Asia excluded), what else can you ask for when in a fight?

sachac




msg:824096
 4:49 pm on Jan 24, 2006 (gmt 0)

I am astonished that a senior excecutive at Yahoo could make such a statement. The goal of every business surely ought to be to dominate the market. For years, Avis worked the "we're #2 so we try harder" strategy. Today they are #3. Enterprise is now #1, demonstrating that they could successfully topple Hertz into the #2 position with the right strategy.

Google is the market leader and it is their job to defend their market position. While it is folly to underestimate the strength of a defensive position, Yahoo has to develop the right strategy just as Enterprise did.

The good thing is, Google did not get to #1 by being first in the minds of the users. Being first is powerful branding which is why Pepsi cannot easily topple Coke. Google got to #1 by being better. That makes them a much easier target.

Yahoo is a powerful brand but they can easily lose ground to MSN. By conceding that they cannot fight Google, they seem to be saying that they will be focusing their guns on MSN. Bad mistake. It should be the other way around, with MSN attacking them, which I am sure they are. You simply cannot fight on too many fronts. When you attack the guys behind you and try to take what little thay have, they will fight back tooth and nail for survival. The snake is always most vicious just before death.

Yahoo ought to be focusing on improving their search results to be superior to Google. This is absolutely essential. In today's world, having a great product is the price to get into the market. When you have the right product, then you can move forward and challenge the leader.

The problem with Yahoo today is that they do not have a superior product. They have to fix this first. For instance, when Yahoo started using Inktomi, they inherited a lot of the mess that caused the demise of Inktomi. Good, content rich sites, that rank highly in the other SE's were booted from ink for reasons unknown.

Despite this, Yahoo simply carried these penalties forward. This is either insanity or pure stupidity. When an established corporation that operates globally, cannot be found in Yahoo's results for their company's name, then something is drastically wrong with their search results.

On top of that, Yahoo continues to operate with their legendary arrogance, not responding to emails etc. This is an approach that you would only expect from an entrenched market leader and Yahoo is far from that.

This is tragic since Yhaoo still is a powerful brand. I am convinced that if they get their act together they can still challenge Google's leadership. If they can't, then you can bet your bottom dollar that they will have grave difficulty retaining their #2 position much longer.

skibum




msg:824097
 4:56 pm on Jan 24, 2006 (gmt 0)

No she said
We would be very happy to maintain our market share."
which doesn't make it sound like they are going to do anything about getting beaten by Google. Just cross our fingers and hope that more people don't switch to Google.

Makes it sound like search isn't a priority for Yahoo! Imagine if Ford or GM said that about the passenger car market.

Danny is right on the money with his comment:

"It kind of makes you wonder about how serious they are about search," said Danny Sullivan, editor of London-based SearchEngineWatch.com, which tracks the search industry. "It really ought to be their goal" to be No. 1, he said. "Whether it's realistic or not."

dclick




msg:824098
 5:04 pm on Jan 24, 2006 (gmt 0)

The problem with Yahoo today is that they do not have a superior product. They have to fix this first. For instance, when Yahoo started using Inktomi, they inherited a lot of the mess that caused the demise of Inktomi. Good, content rich sites, that rank highly in the other SE's were booted from ink for reasons unknown.

Despite this, Yahoo simply carried these penalties forward. This is either insanity or pure stupidity. When an established corporation that operates globally, cannot be found in Yahoo's results for their company's name, then something is drastically wrong with their search results.

100% True. Bingo. Well put.

And whats the result. "Garbage Serps" , That the public joe searcher easily recognizes when they cant find an established company even by the corporations / company's name. I went to yahoo, looking for x or company x, and it came back with Nothing releated. So they went to Google instead and easily found what they were looking for.

And if you even ask them about it, and its either no reply, or "to bad", "we dont care", "go buy more clicks"

Dayo_UK




msg:824099
 5:04 pm on Jan 24, 2006 (gmt 0)

>>>>Yahoo went from 27% to 19% while G went from 47% to 60% (Asia excluded), what else can you ask for when in a fight?

Hmmmz - not sure about those stats in the article.

Going direct to the website that provides these figures it shows for US Searches Yahoo moving from 32% to 29.5% from November 2004 to 2005. Harldy a massive shift over.

Yahoo must be losing bigtime in some countries then....

[edited by: Dayo_UK at 5:05 pm (utc) on Jan. 24, 2006]

europeforvisitors




msg:824100
 5:05 pm on Jan 24, 2006 (gmt 0)

I am astonished that a senior excecutive at Yahoo could make such a statement. The goal of every business surely ought to be to dominate the market.

Your definition of "the market" is probably different than Yahoo's. It's pretty that Yahoo doesn't define itself as a search company.

Sometimes we get so wrapped up in search that we can't see the forest for the trees.

Frequent




msg:824101
 5:10 pm on Jan 24, 2006 (gmt 0)

The fact of the matter is that number 1 on paper really doesn't matter. So long as your ROI is good #2, #3, even #4 is fine. Many companies build their entire strategy around the fact that they can be #2+ at a significant cost advantage. Normally this means they can offer better prices, better service, etc. than the big guy.

Yahoo!'s problem is that they are #2 but don't offer much of anything that beats Google. Because of this, they will continue to loose market share until they can offer something that Google can't.

Freq---

Dayo_UK




msg:824102
 5:21 pm on Jan 24, 2006 (gmt 0)

>>>Because of this, they will continue to loose market share until they can offer something that Google can't.

But is this loss of market share shown by the stats in the article more to do with Google rapid growth in international versions of Google rather than people switching off - eg that US stats for the period Nov to Nov show a lot less change.

Eg. Probably very little needed to set up a bolivian version of Google - eg a search box, and the search working in the correct language.

But to set up a portal in every country would be much more effort.

Those stats show to me that Google is doing extremely well in the countries that are infants in internet but growing very quickly.

Not really much of a world coverage to me:-

[world.yahoo.com...]

I feel this is where Yahoo is particulary weak - but are they even targetting Global search?

ke1th




msg:824103
 5:26 pm on Jan 24, 2006 (gmt 0)

Would it be safe to say that Yahoo! might be happier as a portal these days than providing a substantial search competition to the big G? Afterall combined with MSN search gearing up in the wings that has to have Yahoo! execs sleepless at night or at least a lil sweaty?

Tapolyai




msg:824104
 6:09 pm on Jan 24, 2006 (gmt 0)

It is also possible that they are taking the "weak" approach, allowing Google and MSN to duke it out first.

It costs much less to take a defensive position, then an offensive one. They only have to "survive" to reach a goal, the attacker actually has to win to reach hers.

Once the battle is over, they can scavenge the battlefield, and potentially decimate the winner, which might have exhausted her resources.

Rodney




msg:824105
 6:15 pm on Jan 24, 2006 (gmt 0)

From the same article she said:

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

(I put that part in bold)

To me it doesn't sound like they are throwing in the towel. It sounds more like they want to be more of a balanced market leader rather than focusing so much on search.

goodroi




msg:824106
 7:04 pm on Jan 24, 2006 (gmt 0)

Yahoo has a market capitalization of over $49 billion and a profit margin of 36% according to finance.yahoo.com. I think Yahoo is doing just fine. Yahoo may not currently be the biggest in Internet search, but they are one of the leaders. IMHO it is better to concentrate on projects that add value to a company instead of paying attention to who is the biggest, fastest, coolest etc.

hutcheson




msg:824107
 8:13 pm on Jan 24, 2006 (gmt 0)

I still remember how that PR-professional yahoo (Carly?) promoted herself into the CEO position at Hewlett-Packard -- then talked about how HP was going to do great and wonderful things: but it was all PR talk, and HP has been diving ever since. Carly bailed out, making HERSELF a mint of money, but the stockholders took a real bath.

I (correctly, as hindsight shows) wrote off any hopes of any gain on my HP stock when the cheerleader took over. It doesn't matter how big a mouth the CEO has, it doesn't matter how much she blows her own trumpet -- sooner or later even the stock market has to take care of reality. And I won't diss a CEO who recognizes that fact -- even in public. I've seen too many executives who thought leadership involved group sing-alongs on the poop deck of the Titanic, and too few who thought lifeboat drills were important. Give me a lifeboat-drill martinet any day.

iblaine




msg:824108
 8:22 pm on Jan 24, 2006 (gmt 0)

This is Yahoo telling investors not to focus on search. Yahoo has much more to offer than search results. Google does not. Yahoo will undoubtedly continue to improve their search engine. Google will continue roll out more value added services other than search. To read that Yahoo will 'capitulate' or surrender competing at search seems a bit melodramatic.

Jordo needs a drink




msg:824109
 8:30 pm on Jan 24, 2006 (gmt 0)

Seems to me her comments are saying that they are moving from an internet search engine to a ppc yellow pages search engine.

OrlandoTodd




msg:824110
 8:52 pm on Jan 24, 2006 (gmt 0)

2 words.. "job opening"

BillyS




msg:824111
 9:02 pm on Jan 24, 2006 (gmt 0)

For those of you that she was right in making this statement, I'd like to summarize some of the more important counterpoints I've seen:

1. - How would you feel if you worked on Yahoo Search and a leader of your company made this statement?

2. - What good comes from stating you'll never catch the market leader?

3. - If Google decides to become a portal - like Yahoo - then were does that leave your organization?

4. - Why isn't Google or MSN making similar statements? In fact, MSN is openly stating they want more search and made a mistake by ignoring it.

5. - As a CFO she is responsible for helping to keep the stock's price as high as possible. How does this statement make Yahoo a more attractive stock?

rogerd




msg:824112
 9:35 pm on Jan 24, 2006 (gmt 0)

>>As a CFO she is responsible for helping to keep the stock's price as high as possible.

True, but without ending up sharing a cell with Ken Lay. :) CFOs are probably VERY aware these days about the perils of making optimistic statements that aren't based on facts.

I agree that it would have been better to keep her mouth shut vs. letting slip such an unusually pessimistic statement.

mfishy




msg:824113
 9:51 pm on Jan 24, 2006 (gmt 0)

Sometimes we get so wrapped up in search that we can't see the forest for the trees.

Exactly. As a shareholder, this doesn't bother me in the least. Yahoo! is not just a search company if you haven't noticed but a massive Interent destination. They are making money hand over fist and I, for one, would not be dissappointed if they continued to hold the rather sizable part of the search market that they already do.

As webmasters, we think of Y! as a search engine. They are much, much more than that...

How would you feel if you worked on Yahoo Search and a leader of your company made this statement?

No different than before. If you worked for RC cola would you feel bad if your CFO said you had no plans on catching up with Coke's market share?

What good comes from stating you'll never catch the market leader?

Read between the lines...They don't need to be #1 in search to be a very successful company. If investors felt they did, that surely wouldn't be a good thing would it?

If Google decides to become a portal - like Yahoo - then were does that leave your organization?

That's a different conversation.

As a CFO she is responsible for helping to keep the stock's price as high as possible. How does this statement make Yahoo a more attractive stock?

They are4 confident that they can do quite well, earnings wise without taking the market lead in one area of their business. Whats' wrong with that?

BillyS




msg:824114
 10:20 pm on Jan 24, 2006 (gmt 0)

>>If you worked for RC cola would you feel bad if your CFO said you had no plans on catching up with Coke's market share?

Great example, except you picked the wrong company...

If you worked for Pepsi would you feel bad if your CFO said you had no plans on catching up with Coke's market share?

Most certainly yes.

europeforvisitors




msg:824115
 11:08 pm on Jan 24, 2006 (gmt 0)

If you worked for Pepsi would you feel bad if your CFO said you had no plans on catching up with Coke's market share?

That's a poor analogy because Pepsi and Coke are in the same business to a much greater degree than Yahoo and Google are.

Pepsi and Coke may have other products, but their core products are cola drinks. In the case of Yahoo and Google, only one (Google) has search as its core product.

dougedoug




msg:824116
 11:39 pm on Jan 24, 2006 (gmt 0)

This is something that is very unexpected,there is no way they are just gonna say we are whatever about search. This woman obviously slipped. They do understand how hard it will be to gain marketshare based solely on search so I assume they plan to spend less time on pushing their search and more time on other products that will bring people to the portal. During that time they can develop their organic results enough to just be a little better or as good. Remember as far as anyone is concerned most search results are not so great. People who feel search results are great are the ones who see their results on top. :) The average user just wants to find what they want, if they get hooked into yahoo and they dont find it in the organic results there is always PPC and that means more money for yahoo anyway.

steveb




msg:824117
 12:13 am on Jan 25, 2006 (gmt 0)

A decathalete saying they aren't going to ever be the best 400 meters runner is not just reasonable, it is responsible. It would be stupid for such an athlete to say "my goal is to be #1 in the 400 meters" when the chances were extremely remote at that, but the chances of winning a decathalon gold medal were about 50%.

There is a difference between game specialists (even like a designated hitter) and all-around players who in general make more money.

Nothing wrong with the statement, other than being #2 in a three player field is an odd time to not focus significant resources on getting to be a peer of #1.

wildbest




msg:824118
 12:40 am on Jan 25, 2006 (gmt 0)

You may say whatever you want, but it is a real disappointment! Nothing more, and nothing less. After multibillion acquisitions of leading search technologies and established brands like Inktomi, AltaVista, AlltheWeb, Overture, and many other, you can not say that... Because it simply means you have burned investors money by purchasing above companies... Somebody will have to take the responsibility!

jomaxx




msg:824119
 12:53 am on Jan 25, 2006 (gmt 0)

I agree with everyone else who thinks this was a foolish thing to say. Google is having enormous problems with keeping search results relevant and keeping spam out, due to people designing their entire SEO strategies around gaming one search engine algorithm. Who knows what the search landscape will look like in a few years?

Whether it's "reasonable" to assume Yahoo can be #1 again is kind of a matter of semantics, but it's entirely possible. There are few barriers preventing people from switching back, so all they have to do is provide a better search experience.

BillyS




msg:824120
 1:01 am on Jan 25, 2006 (gmt 0)

>>That's a poor analogy because Pepsi and Coke are in the same business to a much greater degree than Yahoo and Google are.

The Coca-Cola Company (Coca-Cola) manufactures, distributes and markets non-alcoholic beverage concentrates and syrups, including fountain syrups, in the world.

PepsiCo, Inc. is a global snack and beverage company. It manufactures, markets and sells a variety of salty, convenient, sweet and grain-based snacks, carbonated and non-carbonated beverages, and foods.

The comment still stands. If I worked for Pepsi, I'd be upset.

[edited by: martinibuster at 4:30 pm (utc) on Jan. 25, 2006]
[edit reason] TOS #19 [/edit]

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