Posts about yahoo

Guardian column: Micohoo vs. Gulliver

My Guardian column this week on the Microhoo search lashup:

In bringing together their search traffic, Microsoft and Yahoo are fighting an unwinnable war. Worse, they are still fighting the last war. . . .

But while they pound their little fists on Google’s shins, Google remains the unchallenged giant in the arena that really matters: advertising revenue. According to the blog Search Engine Land, Google takes almost a third of all online advertising money – $21bn a year – and it doesn’t rely just on search.

And Google is turning to the next battlefields: mobile, social media, the live web, and online tools. . . .

Yahoo can now jettison the technology resources that went into search. That’s rather sad. After all, 15 years ago, it was Yahoo that first organised the web for us. Its original ambition seems quaintly naive today: human editors cataloguing every site worth visiting and deciding which were the hot ones we should visit. Back then, we, and Yahoo, thought the web was a medium, like TV, that we experienced together. Yahoo never quite broke out of that thinking. It still treats its site as a destination we have to go to with walls around it to keep us in. It just introduced a new homepage to some fanfare. Homepages are so 1999. . . .

So, let Yahoo and Microsoft celebrate their deal. Yahoo doesn’t have as much to celebrate. It turned down acquisition offers and now it gets no cash from Microsoft. And it is surrendering its earliest competence to a competitor. Microsoft has more cause to grin. It got Yahoo’s search traffic for no cash and doesn’t have to manage the rest of the old beast.

And Google? One wonders whether it notices beyond that irritating poking at its shins. It’s too busy trying to conquer what comes next.

A mouse roars

Poor Yahoo. It only goes from worse to worse. They might finally get rid of ineffectual Jerry Yang but then they might get Mark Cuban in the boardroom along with Carl Icahn’s slate. Cuban has an absolutely numbnutty plan to kill Google: Paying sites to drop out of the Google index.

What does CBS stand for?

Some headscratching happening at the Online Publishers Association meeting here in London over CBS’ purchase of CNET for $1.8 billion.

I wonder: What is CBS now? What does the brand mean? They just gutted the online news operation and word has it they don’t like new (which I have to believe is a prelude to the same happening to CBS News on the air; a company that likes news would like news anywhere). They had a big news brand that has only deflated. And now they buy News.com, a large (but not growing) niche (but large niche) site.

So CBS joins the ranks of Time Warner and Microsoft, to name two, that try to buy the internet strategies they don’t have. Oh, what the hell, add Yahoo to that list, starting with its purchase of Broadcast.com, which I bring up just to note that Mark Cuban, made a billionaire by that purchase (which soon died) is not on Carl Icahn’s slate of rebel directors for Yahoo. Even Yahoo doesn’t have an internet strategy.

If I started a company, I’d take good money, of course, but I sure would hope not to be bought by a company that is using it to buy the strategy it doesn’t have. I can’t think of a case in which that has worked, can you?

Deal with the devil

The best analysis of the Microhoo has been Kara Swisher’s, particularly her explanation of how Google ended up as the winner.

While Yahoo (YHOO) might not have wanted to be acquired by Microsoft (MSFT), its alternative to goose its revenues by relying on Google (GOOG) in an outsourced online search-ad deal is one it might regret even more if struck.

Why? Aside from the potential antitrust issues, which are distracting at the very least, it fundamentally puts one of Yahoo’s main businesses-search advertising-directly into the hands of the very company that killed off Yahoo’s chances of ever succeeding in the arena in the first place.

Yahoo has no visible strategy. Microsoft isn’t in much better shape. AOL remains a drag on TWX. Google wins again.

Yahoo, indeed

As a Microsoft shareholder, I’d be delighted if they are saved from buying Yahoo. As a Time Warner shareholder, I’d be delighted if they were saved from owning AOL. But I do think a Yahoo-AOL lashup is this is Dumb and Dumber, Incorporated. Who would run the thing? None of their current bosses, I’d hope. What would the strategy be? Nothing like what it is now: get out of portalthink and get into platformthink, please.

: LATER: A reporter asked for my take and predictions on the MyMicroYahOLSpace orgy. I said:

First, I think a Microsoft-Yahoo combination made little sense. It was Microsoft’s attempt to buy audience — as if you can own audience today, as if we can be bought and sold. That is the old-media way of looking at the world: they controlled content, marketed to get people to come to you, showed them ads, then waved good-bye.

The new way — the Google way — is to be distributed, to make your content, brand, and advertising exportable and embeddable (as with Google AdSense or YouTube videos or Google Maps). I believe that both Yahoo and AOL should follow that example, making everything they have exportable, and becoming a platform for individuals and companies to create and mash-up content and even start businesses.

The other opportunity is to become the ad network for this distributed world. Problem is, Google got there first. AOL and Yahoo have invested fortunes in ad platforms. Again, they did this in the old-media manner, trying to aggregate audience and networks under their roofs. Google, meanwhile, not only bought DoubleClick but also opened Ad Manager, which will serve anyone’s ads for free (and give Google the chance to serve its own ads when sites want). That will expand Google farther and faster than any acquisition like Yahoo or AOL could. If Google can also expand via Yahoo and Yahoo can get more revenue from that than from its own advertising — which says a lot about Yahoo’s strategy — then fine; but doing anything you can to avoid Microsoft is not itself a strategy; it’s a move of desperation.

Microsoft is trying to buy the online strategy is still has not managed to build on its own.

Yahoo and AOL are trying to regain an online strategy they lost. Will they be better together than they were apart? It depends on who manages them and who comes up with a strategy. Clearly, the incumbents at both companies have failed. This takes new leadership who understands the new architecture of the media world and I’m not sure where they’ll find that person. Trying to lash together these two failing strategies and cultures and come out with something new is a thankless task.

News Corp., meanwhile, is being very clever in trying to offload some of the risk of MySpace. People ridiculed the purchase when it was made. It turned out to be smart, as so often happens with the moves Murdoch takes that others ridicule. MySpace is worth more but its strategy is also somewhat unclear as Facebook — and even new platforms like Twitter — build deeper relationships with their members. So if Murdoch can get value out of MySpace now, at a high, and lessen his risk, then he’d be happy.

At the end, I think Microsoft could still win because it is the only one willing to pay much of a premium. Time Warner is a bit desperate to get rid of AOL but it won’t value it too low after having valued it way too high. News Corp. has already shown it is not willing to pay a premium and will only go along for the ride if someone else does.

The last portal

With some fanfare, Yahoo today unveiled its new women’s site, Shine, with content contributions from lots of big companies including Conde Nast, Hearst, Rodale, and Time Inc. (though I find little evidence of them on the site; most of my clicks took me to stuff written by Shine staff, which doesn’t look small; others too me to snippets from magazines made to look like blog posts with lots of plugs to try to get you to subscribe). It has that women’s magazine voice: “Four ways to be good to your body this week…. Carla Bruni-Sarkozy: We think you’re awesome…. Perfect, pretty, sturdy canvas bags…. How to get on your boss’s good side….”

Poor Yahoo. They could cure cancer while tap-dancing naked and I wouldn’t be impressed. They have just gone and tried to create another portals. Portals beget portals. There’s nothing new in this. Having worked at Conde Nast, I went through conversations about starting sites like this with all the other portals many times over. What’s the big?

The problem is that this is born from a spreadsheet rather than a vision. In the PaidContent report, Yahoo svp Scott Moore “explained that for the longest time, Yahoo had been developing sites focused on topics (for instance Food, Sports and others). Now, with Shine, it has started developing site based on audiences/demographics, and in this case a big one, and lucrative to advertisers.” I’ve seen and heard that tap dance before. Beware any product that starts with a demographic that’s going to excite advertisers because it has lots of brands. That’s portalthink at its saddest.

Pop open that capsule now

I was amused to run across friend Jonathan Harris’ project for Yahoo: a time capsule to open on the company’s 25 anniversary in 2020 — only 4666 days left, or gobbling up into Microsoft, whichever comes first.

Fightin’ words from Google

At Google’s blog today, David Drummond, the company’s chief legal officer and senior VP for development, comes out with phasers set to kill against the Microsoft bid for Yahoo. A week ago in Europe, I ended up at a small dinner and a few other events with Drummond. He’s a serious guy with a stoney glare. I’ll bet he could stare down Steve Ballmer in a contest.

Implicit in Drummond’s and Google’s argument is that Microsoft is a closed company in the open internet. He contends that Google is the better agent of that openness. It sounds rather like a presidential debate: Who is the agent of change? Says Drummond:

So Microsoft’s hostile bid for Yahoo! raises troubling questions. This is about more than simply a financial transaction, one company taking over another. It’s about preserving the underlying principles of the Internet: openness and innovation.

Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC? While the Internet rewards competitive innovation, Microsoft has frequently sought to establish proprietary monopolies — and then leverage its dominance into new, adjacent markets.

Could the acquisition of Yahoo! allow Microsoft — despite its legacy of serious legal and regulatory offenses — to extend unfair practices from browsers and operating systems to the Internet?

One should never underestimate the power of Microsoft. Nonetheless, I think the internet’s openness is precisely what has kept Microsoft from monopolizing it, as some feared. I’d say that the precedent of AOL taking over and then slowly killing Netscape is relevant here: I’ll bet that Microsoft is just as likely to destroy as to exploit what it gets from Yahoo. That is often the history of these takeovers, when a company tries to buy the strategy it doesn’t have: AOL and Netscape, Time Warner and AOL, Yahoo and Broadcast.com, and on and on.

And if I were Google, I’d be a bit careful trying to call someone else too big, since some are trying to paint Google as the new overblown boogeyman. In Europe, newspapers are trying to stop Google’s acquisition of Doubleclick for similar reasons (though Reuters says EU approval is likely). Personally, I don’t think regulation is needed in either deal. But Google does:

In addition, Microsoft plus Yahoo! equals an overwhelming share of instant messaging and web email accounts. And between them, the two companies operate the two most heavily trafficked portals on the Internet. Could a combination of the two take advantage of a PC software monopoly to unfairly limit the ability of consumers to freely access competitors’ email, IM, and web-based services? Policymakers around the world need to ask these questions — and consumers deserve satisfying answers.

This hostile bid was announced on Friday, so there is plenty of time for these questions to be thoroughly addressed. We take Internet openness, choice and innovation seriously. They are the core of our culture. We believe that the interests of Internet users come first — and should come first — as the merits of this proposed acquisition are examined and alternatives explored.

It’s hard to believe that Google is actually scared of Microhoo but is merely using PR and regulation to try to throw some marbles on the ground in front of them. Google does indeed understand the open internet better than either of these young dinos and that is its greatest competitive advantage. In this case, size doesn’t matter. Openness and smarts do.