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Yahoo/Google War About to Breakout

Per Danny Sullivan

     
2:32 am on Jan 30, 2003 (gmt 0)

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I don't think anyone has posted Danny Sullivan's assessment of the Yahoo acquisition of Inktomi:

[clickz.com...]

A very interesting read.

2:41 am on Jan 30, 2003 (gmt 0)

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My guess is not war, but competition. Not much sense in people using Yahoo! to search if Google gives the same results. For AOL and some others using Google makes sense. But not Yahoo!
2:46 am on Jan 30, 2003 (gmt 0)

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Very interesting read.

This bit caught my eye.

"Yahoo! the Portal" wants to regain its former stature as "Yahoo! the Search Engine"

Interesting that we also seem to be seeing "Google the search engine" shifting toward "Google the Portal", what with the addition of Froogle.

So yes, I think a search war is a possibility, but I also think the Inktomi database needs a lot of expanding - although results aren't bad for generic terms I'd not go near it for specifics.

2:47 am on Jan 30, 2003 (gmt 0)

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Complicating the issue would be Yahoo's 5% stake in Google, surely that would be worth $235 million. Don't know but that's what I would have thought
3:07 am on Jan 30, 2003 (gmt 0)

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hmm...it'll be an uphill battle, then. For Yahoo!
3:08 am on Jan 30, 2003 (gmt 0)

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I see that Yahoo has just announced that they will also start carrying pay per month radio stations.
3:11 am on Jan 30, 2003 (gmt 0)

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"Yahoo! the Portal" wants to regain its former stature as "Yahoo! the Search Engine"

That's because being a portal has yet to be proven to be a viable business model. One of the few pure Internet business models that has shown the ability to make real money is PPC.

3:23 am on Jan 30, 2003 (gmt 0)

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Yahoo's 5% stake in Google, surely that would be worth $235 million.

That would put Google's value at $4.7 billion. That's almost 4 times Overture's market cap. That's a pretty significant premium over an established PPC engine. How do you come to that figure?

3:28 am on Jan 30, 2003 (gmt 0)

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"surely that would be worth $235 million."

Yahoo's paying $235 million for Inktomi.

3:35 am on Jan 30, 2003 (gmt 0)

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That's a pretty significant premium over an established PPC engine. How do you come to that figure?

As I said, I have nothing to back that up, but I would'nt be at all suprised if after an IPO its Mar Cap was that high. To my mind there would be the rush of mom and pa's investors similar to that of Telco's in the late eighties and early nineties.

3:38 am on Jan 30, 2003 (gmt 0)

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To my mind there would be the rush of mom and pa's investors similar to that of Telco's in the late eighties and early nineties.

Which would only prove that the typical American investor still can't figure out a P/E ratio ;)

3:41 am on Jan 30, 2003 (gmt 0)

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Which would only prove that the typical American investor still can't figure out a P/E ratio

True although corporate America does'nt seem to crash hot at it either "AOL"

3:42 am on Jan 30, 2003 (gmt 0)

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> My guess is not war, but competition.

Competition is war ... isn't it?

3:47 am on Jan 30, 2003 (gmt 0)

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What ## I was only away for 4 weeks and the world is about to significantly change :-)

Did I miss any other news since late Dec 2002?

3:58 am on Jan 30, 2003 (gmt 0)

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Google news, froogle, Answers, Language tools: These are all ammunition for the forthcoming competition. They are guns tucked into their pockets.

If they have an IPO the pressure will be on to come out with all guns blazing like Chow Yun Fat.

You can bet that the pressure will be on Google to drive traffic to to Froogle etc. and monetize their various offerings beyong the basic search.

4:04 am on Jan 30, 2003 (gmt 0)

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Great a little competition keeps everyone on their toes.

Nice to see some among search engines or soon to be search engines again :-)

4:07 am on Jan 30, 2003 (gmt 0)

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martinibuster - I fully agree. The problem is, aside from E-Bay's auction biz (which isn't really pure Internet), the only asset that Internet companies have truly successfuly monetized is PPC. Can Google succeed where others have failed? Can they convert traffic and branding into money? I don't know - but I wouldn't bet on a market cap of $5 billion ;)
4:15 am on Jan 30, 2003 (gmt 0)

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That kind of money surely sounds silly in current stock markets, bear in mind there may shortly be a war which will set markets a flutter. Are investors ready to get into internet excitement again so soon after they were burned last time, e.g. I thought amazon only made one period of profit so far on turnover of 12 billion or something?
4:46 am on Jan 30, 2003 (gmt 0)

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bear in mind there may shortly be a war

A war is the best thing that could happen to the economy, and to stocks in particular.

It's uncertainty that keeps investors on the sideline, and the longer we stay out of war the longer the economy will keep tanking. Of course, if there is a resolution apart from war then that would help too. But perhaps not with the same kick an all out war would have.

Disclaimer: I marched at the protest in Frisco this month. I don't approve of or advocate war.

I'm only stating the obvious truth that war increases consumption, that is, war uses up raw materials and equipment, and spurs manufacturing and technology which must be replaced and improved.

Economy 101. That's why investors love a good war: It spurs the economy.

5:37 am on Jan 30, 2003 (gmt 0)

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>>We're committed to providing users the best experience, and to the extent that paid inclusion is improving the relevancy of query results - (weiner)

This is a spin also spun by MSN and others - as a general principle that, repeated enough - people will start to belive it.

Paid inclusion may contribute to relevancy in some commercial topic areas, but I dont see any evidence in that it helps with informational or general searches, in fact more often then not, the very opposite.

This is a dangerous statement to let go unchallenged, no matter how qualified the nature of its presentation was.

>>(for example, do a search for "san francisco weather," and the actual forecast is embedded in the search results page).<<

Hopefully this "portal-thinking" may not continue to dominate the thinking. Why should I have to wait for the actual san francisco weather to load if i wanted something else - like historical data, research articles, song lyrics, or opinions on the weather. Providing useful search, as Google has proven, is sometimes about giving customers less, not more.

10:01 pm on Feb 5, 2003 (gmt 0)

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If Yahoo continues to improve search results then they may just edge Google out a tiny bit IMO. They offer alot of things that Google doesn't like news, weather, and chat. As you notice Google realizes that a semi-search portal would benefit them with keeping surfers at Google.
11:07 pm on Feb 5, 2003 (gmt 0)

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>They offer alot of things that Google doesn't like news, weather, and chat.

Totally agree. Yahoo is a pretty awsome source on informations/entertainment. But I think their killer app/trump card is Email. How many of you have yahoo email addressed that you check regularly? I have 4 that I check every day. I'm married to that site. In that sense, Google has the uphill climb.

11:17 pm on Feb 5, 2003 (gmt 0)

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I don't think it is chat or email or search that Google might have to compete with Yahoo... I believe it is everything.

Yahoo have been created with an nice idea of being everything for everybody on ther internet. If you look for all the services they offer, you can easily see that they are channeling their own traffic and keeping it for themselves. At Yahoo.com one can find *all* kind of info.. so if Google is gonna try to compete with Yahoo on being a portal, then it is going to be a real tough fight.

3:57 pm on Feb 24, 2003 (gmt 0)

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If Yahoo continues to improve search results then they may just edge Google out a tiny bit IMO. They offer alot of things that Google doesn't like news, weather, and chat.

On main reason to go to Google IMO, they don't offer that stuff + don't have annoying advertising. If you are looking for something, be it news, info or products you can find it at Google w/o all the clutter and distractions at YAHOO!

I would never use YAHOO! email after they reset their privacy preferences and decided they would sell out their users.

Just tossed YAHOO! messenger in the bin cause that thing was to often getting in the way when not in use.