Wednesday, January 24, 2007

Yahoo... oho.. out of the game ??

Yahoo "blew it", claims Wired in a lengthy expose. Company bounced back in the past five years, only to drop even deeper as it fell behind Google, the story alleges. It's hard to argue with the raw data. Google's revenues have taken a decisive lead over Yahoo's.

Yahoo made two monumental mistakes: it failed to acquire Google in 2003 instead they allegedly brushed off the $5bn asking price, bidding a measly $3bn and it never properly integrated the 2002 Inktomi acquisition, a provider of pay-per-click advertising. The Inktomi deal is scheduled to be wrapped into the Yahoo business later this year, which is an embarrassment by all standards. The Inktomi dilemma is important, because Google has shown that good technology allows you marry the right advertiser with the right consumer/user.

But Yahoo also is betting on content much more than Google is. The firm is trying to be a destination rather than an information broker. Creating content is far more expensive than pointing people towards it.

Fact is: do a search on Google for anything. Anything at all. Then do the same search on Yahoo. One guess as to who comes up with more relevant data. One clue. It's not Google. Come to think of it, also has a better search than Google, and I know it's not politically cool to say this on one of these sites, but so do MSN and AOL.

But Yahoo is falling behind, and if it allows this to continue, it risks becoming an acquisition target and Google is laughing all the way to the bank.

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