rogerd - 3:14 pm on Jan 24, 2006 (gmt 0)

That's an unusually frank admission. I would have expected something like, "While we know Google will be difficult to unseat as the leader, we think that if we continue to deliver excellent search results and refine our technology even further, we'll maintain our share and increase it over time."

Yahoo has an advantage in site stickiness, and they need to exploit that - they should work to insure that no Yahoo user goes to Google to search.

Search is still important to Yahoo's business model, and a negative statement like this seems kind of dumb. "Yeah, those guys are just better than we are... we might as well give up."

On the other hand, business history is littered with failed firms that pursued quixotic efforts out of pride or just bad judgment, and paid the price in the long run.

Still, any sports fan will tell you that a team that gets conservative and doesn't play to win but tries to play "not to lose" ends up doing just that... losing. Can you recruit top people if you are striving to be second best? Can you motivate your current people to achieve greatness if they think management is happy with being #2? I don't like this strategy.