July 02, 2005
Innovation, you can go from ho-hum to gung-ho
The most valuable mantle that Google stole from Yahoo as it set out on its crusade for "pure search" in 1999 was innovation. Google was against all the commercialism and in pursuit of better search, which was the key issue after all.
A Stanford philosophy PhD named Skokowski was apparently part of the Yahoo team that made the earth-rattling decision to use Google search results instead of the crappy Inktomi listings that had been turning increasingly irrelevant.
On the one hand this was a customer-friendly decision that made tons of sense for a portal who baked few of its own delights -- news from NYTimes, payments by HSBC, servers from HP, FreeBSD under the hood, shopping from the Gap, and so on. Why should Yahoo "own" the esoteric technology in a search engine? Yahoo would bring the best of the best to bear. And besides, Yahoo can continue to play since it would take 5 or 10% of its partner as part of the deal.
Of course, in time, it became clear that the non-exclusive sourcing approach (NYT content on Yahoo News...or on nyt.com) made it all too easy for fans of a particular function to go to the partner source. In the case of search, integration apparently was the opposite of what people wanted -- Yahoo's cluttered, integrated, ad-covered, etc etc search page and results were annoying. People liked the hedgehog approach of Google's page. So they switched.
As preamble, just note that there were many effects underlying the share shifts in search. But also notice the fundamental shift in "leadership" perception. Google was making a better mousetrap and you knew it. More than likely that is still the perception of most Internet users (though it probably took until 2002 or 2003 for people to actually form this belief).
The innovation deficit against Google was a big part of Yahoo's problem. Yahoo was becoming AOL: marketer full of ad banners and things that were "easy" but probably more suitable for your intellectually-challenged classmates, not you.
The point of all this is that it is changing. Google had labs.google.com and Yahoo has next.yahoo.com. Google people are PhD's, and so are Yahoo's (including the old Skokowski). Yahoo has half a dozen research papers posted on their Next site; pure eye candy. They are trying out all kinds of goofy things - many simply silly but provocative - like Y!Q contextual search or Y! Mindset.
More importantly they are structuring their product development process around an innovation strategy -- "core search", "new technologies", "early adopters"/influencers, "defense/Google-matching"
Core search - the silly ones I mentioned plus some cool stuff like Subscriptions search, My Web and the social search in My Web 2, FareChase and Video search extending search to new vertical/content categories (Google has not done any of these -- they are pursuing different stuff which may be worth noting)
New tech - they finally launched a community/blogging/sharing application rolled together called 360.yahoo.com, RSS support is all over Yahoo News and also on Yahoo Travel (check it out, it's cool), there are lots mobile related tools (local results can be sent to your mobile with a click, mobile search, Y! Mail for your mobile phone)
Early adopters - in the battle for hearts and minds, Yahoo is aggressively supporting RSS, Firefox, Linux, Mac with all its toolbars and doo-hickeys
Defensive - they've sped up Local (to respond to Google Maps' breakthrough flash-based maps), they've simplified the search results
