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And now, Yahoo picks an old media CEO Terry Semel. Semel is old school hollywood from Warner Brothers.
On the surface, it appears to be a major, major misstep on the part of Yahoo to bring in a man with zero net experience. Why do net players think they are in the television business?
Hollywood is about pictures, Yahoo is about words -- the two formats do not mix well. This isn't TV, and it isn't a newspaper. This is the web, where interactivity breaks all old rules. It was interactivity that broke Go.com because they thought they were in the "movie newspaper" business. It was interactivity that broke NBCi, because they thought it was just a cable tv channel.
The trouble at Yahoo won't be immediate. When ever a large company brings in a clueless but talented outsider, the first year is usually a good one. The first year after Disney bought Infoseek was pretty good - Same when NBC bought snap - Same when Apple brought in Scully. The trouble will start a year from now when he is out of fresh ideas and starts to fall back on what he thinks he knows about the business.
Yahoo! has serious problems before this. Their stock is at 5% of what it was 2 years ago. Advertising revenues are gone, so their basic sources of income are from webmasters submitting their sites and whatever revenues they can scrape up from their extra services.
I read a great article yesterday on how charging for submissions deletes the relevance of search engines and eventually will force them to change. Imagine how Yahoo! feels seeing one of their major advertisers circulating this report. It's a knock on the door of inevitability... Yahoo! is a corporate dinosaur in the internet generation. (Much like Amazon.com and others)
<Their stock is at 5% of what it was 2 years ago>
As with most internet stocks they were overvalued two years ago. Leaving stock evaluations to experts, even an amateur like myself could see that those stock prices would not stay without revenue and profits being shown.
my .02
Got a link to the article? sounds like something of interest.
The basis of the article was that forcing webmasters to pay for listing delutes the relavence of the search engine. Because the SE is technically censoring out sites that don't have the budgets for submission services (They say the major search engines alone would cost $597 to submit to), many sites included in free directories would end up being excluded. People would find less and less of the information they need, and start looking elsewhere. This combination of less relavence/traffic loss will eventually lead to a reduction in the cost of submitting in the long run.
I thought it was a load of cr@p until I thought about it. I don't use Yahoo! anymore, nor do I use excite or goto. I use the ODP because I find more of what I want with less crap.
I also think Yahoo! is in serious financial trouble. People are getting fed up with paying for services that they can get for free, and free services don't make money. Yahoo charges us to make up for it, but the majority of us still don't pay them. I don't see any long-term source of stable revenue for them unless they drop the submission fees to a more reasonable level and come up with a product worth selling.
So far, it seems to me that companies like First Place Software have masterfully captured the value that search engines provide, yet have been unable to capture thus far. SE's ought to realize that providing relevant results (at least IMHO) is the most important thing they can do to keep people coming back. They can and could capture revenue by selling advertising, and providing (selling) ranking reports. Anything that lets the algorithm do its job, while not being influenced by who has the biggest pockets and working with web promoters. There's got to be some creative minds out there with cooking up other revenue streams.
Some form of hurdle seems necessary to weed out spam, which pay for whatever achieves to a point, but if the price keeps escalating, truely useful information (w/o) a significant promotional budget) will be so far buried that it will never be found.
A little bit of anything usually is a good thing, GOTO, in moderation for example. However when the results show up everywhere (especially when it is not disclose that they have been paid for), and PPC engines pop up all over the place it degrades the value of the service sector as a whole.
I've never used the Ink pay for inclusion, and don't plan on it, when the decision is mine. However to be seen in Inktomi (which is fewer and fewer places these days) it sounds like coughing up the cash may be the only way not too far down the road. Someone who went to SES mentioned that Ink, talked about the pay for inclusion program and said something to the effect, that there are only so many spots in the database. Should they only increase the size of the DB on the basis of needing to make room for additional paid requests for inclusion, well, there goes that data source.
If that should happen, the Ink database would be skewed, we'd all have spent a ton of money on it, and be worse off in terms of having a valuable source of searchable information.
Google and ODP get my eyeballs at this point, along with Fast and AV occasionally. If Google and ODP suddenly disapeared, I'm not sure what I would do:) It'll be interesting to see how it all plays out!
Yahoo doesn't really use an algo to determine enterance... It's an human-edited search engine (I use the word human loosely... :P)
And I think the major problem is that instead of charging the users of the services small fees for using services like their shopping, movie listings, stock data, and e-mail, companies like Yahoo! prefer to give those services away and charge us for the fact that advertising revenues are non-existant. It's still an old-new economy company that beleives that it's best bet is to make SOMEONE pay.
The one thing I have learned in trying to change my site to a new-new economy business is that if you give away something people can't find somewhere else, they are willing to give something back to you. What Yahoo! needs to do is;
#1 Find a source of revenue from selling something... besides search engine submission services...
#2 Find a physical product to sell... They're giving away knowledge and trying to sell access... Find some physical item to sell, as old-economy as that might seem.
#3 Become more web sticky... When I used Yahoo, I was never more than "3 Clicks and Gone"... They need to find a way to keep people on the site, even if it involves openning web searchs in new windows... If all my surfers left in 3 clicks, I'd be broke(r)...
#4 Stop worrying about stock valuations and start worrying about physical business profitability. Without extra charges this last quarter, Yahoo! was profitable... It's all their aquisitions and stock charges and extra losses that caused their stock to tumble... If they concentrated more on their core business and the above three issues, they wouldn't need to worry about the stock, as the stock would handle itself.
IMHO
TV and Radio media make money without selling a physical product. Wouldn't selling a product put them in direct competition with their advertisers (us). Also with the added cost of the services they provide (chat rooms, weather, etc) the prices for this physical product would not be competitive. Could they sell enough of this over priced product to recoup the cost of all the servers and bandwidth.
Also the sites that we've gotten listed with the biz express have more than recouped the $199.00 price tag. Have you looked at doing advertising offline and seen the prices? While I don't think Yahoo! is perfect (far from it) a large portion of the traffic for domains that we work on are generated by Yahoo!.
It occurred to me the other day that I use AltaVista a lot, considering the degeneration of this once-great search engine.
I realized that I do much the same way that I knock on wood for luck: I know it's not going to work, but it's an old habit. :(
then how come so much effort goes into TV/Film spin offs?
this gets close to an important point though...the web is a narrowcast medium...that's why broadcasters want to buy as much of the web as they can...broadcast is dying...we don't want what NBC/BBC/whatever tells us we want to watch at 8.00pm...we are getting used to being interactive...we want to tell them that at 8.00pm we want to watch the X-Files/a wildlife documentary/Bruce Willis blowing things up/whatever...that's the future and the broadcasters know it
I am wary about old media companies taking over new media companies...partly because I don't think they can understand the medium...partly because I'm suspicious that old media would like things to slow down a little so they can work out what to do before they die
I just feel that either the information that Yahoo! displays or the eyes of the end user are Yahoo!'s product. If they started selling physical products directly then it would end up being similiar to the tv stations that run 24 hour marathons selling products (QVC I think is one) as corporate officers push for more sales as is the nature of the corporate beast.
I agree that the internet has brought about the age of interactivity. I didn't mean to limit to the medium to radio/broadcasting but rather point out the similiarities to the "product" they are selling.
