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Head Fake?

By - January 24, 2006

Via Hawk: Yahoo Giving Up on Quest for Search Dominance.

I don’t know … this quote sure ain’t in character with the folks I know at Yahoo:

“We don’t think it’s reasonable to assume we’re going to gain a lot of share from Google,” Chief Financial Officer Susan Decker said in an interview. “It’s not our goal to be No. 1 in Internet search. We would be very happy to maintain our market share.”

Thoughts?

Update: Hawk covers Caterina’s response: Blathering bullshit!

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17 thoughts on “Head Fake?

  1. MikeM says:

    Career change coming for Ms Decker? As a Yahoo shareholder I find that quote incredible and unfortunate.

  2. buygoogle says:

    This is not the first sign of surrender from Ms. Decker. On Yahoo’s analyst call last week, when asked about Google continuing to steal share, she used a lot of platitudes (“we feel really good about our overall strength”), and weasel words (“we are on our plan”).

    Nobody on the call said anything about trying to challenge Google’s search dominance, or using social search to beat Google’s algorithms.

    The ComScore numbers show Yahoo losing 8 points and Google gaining 13 points year over year as of November. While Ms. Decker attacked the credibility of the ComScore numbers, if they’re even anywhere close, then Google ate Yahoo’s lunch and took a couple bites out of the other guys, too.

    You’d think Ms. Decker’s pants would be on fire looking at these numbers, but all I hear is complacency.

  3. Sue Decker is about as smart as they come, so I doubt this was a slip-up. The Street has been all over Yahoo about its relative search incompetence, and Yahoo has spent the last year promising to “fix the algorithm” and give Google a run for its money. I suspect the new communications strategy, at least with respect to the Street, is to try to set the bar low and then clear it easily. This said, given recent trends, I don’t think it’s going to be easy for Yahoo to even maintain share.

  4. TechBoard says:

    Yeah, but I’m not exactly sure that it matters that much either. Yahoo’s future lies in a different place, as the No1 destination site /portal.

    And they’ll get a chance to reinvent the search game around social networking.

    I believe both Yahoo and Google have great futures but also different futures.

  5. Greg says:

    Totally agree with HB above; this is to condition expectations. It’s also a statement of reality too. Yahoo has not in fact been able to steal share so I suspect they’ll try other approaches to attract users and let search be the beneficiary of that loyalty or “back door” consumer acquisition.

    Again, Yahoo! is the No. 1 site on the internet in terms of uniques, which gets lost in the frenzy of competition and media speculation over search.

    More interesting to me in a way than Yahoo!’s strategy (which is probably multi-faceted given their assets) is the question: What’s MSN going to do when faced with half Yahoo’s share and (putting aside the “search baked into the OS/apps,” etc. arguments) no clear path to gaining share?

  6. Steve says:

    When I first read this I couldn’t understand it and I still don’t. How can you just give up? If you’re not going to try get out of the business.

  7. Remember: although huge, from a “how consumers manoever and ultimately buy” perspective, search is not the be-all and end-all. It is only part of the puzzle, albeit a very nice paying one at this point. YHOO resetting the expectation bar in this area is *far* from a bad idea. They have much more *existing* potential non-paid-search upside with other advertising and customer interaction vehicles than GOOG does today, and if (when?) paid search as the Big Revenue Thing starts to wane, being About Everything And Not Just Search sure ain’t a bad place to be…

    – Stuart

  8. Ted says:

    I don’t know… if you ask me, a better way to manage expectations is to show why search is not as important, rather then say you’re giving it up. Yahoo! should be able to be competitive with Google for search, and this kind of bad buzz just keeps people from even trying Yahoo’s supposedly improved search.

  9. patil says:

    Dear Mr. John:

    Instead of our thoughts, you should ask thoughts of Mr. Amr Awadallah, whose BLOG you had reported and which said “Google hires low quality folks”. So if Yahoo is hiring the best quality folks, why is Yahoo giving up ? If Yahoo has the best Engineers why is it calling Media Player APIs in Yahoo Music, can’t Yahoo come with a player and DRM ? Yahoo or other virtual NEC(Non-Evil Consortium) members must not go against Google for sometime, which has publicly vowed to fight the Redmond EVIL.

  10. MikeM says:

    Even if we assign some sort of “low hurdle” excuse to Ms Decker’s statement it was still the wrong thing to say.

    How do the Yahoo search engineering teams react to this? What a message. Talk about a morale buster. I suspect there will be a lot more basketball being played on the campus this Spring.
    What a gift to Google to hear your closest competitor throwing in the towel.
    I’ll unwind my YHOO positions in the morning.

  11. Ironically, a few years ago – Yahoo was in the same position as Google is today – Being #1 by a long shot, in terms of Search Share.

    It appears that Google has mastered the Back Link Analyses Algorithms – which is what works with TODAY’s Technology. But, it has been squeezed as far as it can go – Google is getting less relevant, but the best that can be offered NOW. Yahoo and MSN, although dramatically improved, have JUST not been able to offer the best Relevant SERPs for MOST queries. They are trying everything with their newer ALGO updates – and are both quite adequate for Casual Searchers. It is the AVID Searchers that thrive on Google’s relevance.

    But there will be an evolution at some point, of even greater Algo Technology – if it does come from Google, Yahoo or MSN it will require complete ALGO Revamping from the DNA level on up….A complete metamorphosis!!!!

    If it comes from some unknown, super-brilliant, super-lucky start-up, very likely they will be what Google is now, in a number of years.

    There just has to be another seed blowing in the wind ….. somewhere.

  12. Buster says:

    I find this comment by Sue Decker extremely distressing – perhaps she needs a refresher course in Media Training. Yahoo!’s acquisitions of flickr, del.icio.us, upcoming.org, webjay, etc point to its aspirations around Social Search. its is WAY TOO EARLY to throw in the towel on Search. Think of how much upside there is not only in internet penetrations, broadband connections, content to be indexed all over the world – Search is the front door to all this content for all of these users. This is just the beginning. Sue Decker’s comments are either completely irresponsible, or perhaps taken out of context. Otherwise, she should be removed from her post.

  13. Cy says:

    Social search? I thought that space already belonged to Cyworld. Only question is how well it travels.

  14. Frank Daley says:

    A number of comments have been made about the quality of Yahoo’s search algorithm vs Google’s. However there is another criticial component – massive computing horsepower.

    For Yahoo to even keep-up with Google (let alone gain market share) would require corresponding capital expenditures.

    I suspect that Yahoo has decided it would be better spending its capex in other areas. Hence a likely scenario is that Search will develop into a two horse race between Google and Microsoft. Hmm, just like the never-ending battle of good vs evil!

  15. Shakir Razak says:

    I’m in absolute awe and Shock about this.

    This site is read by the most smartest, cleverest people in the tech/net industry, and yet the best we can come up with (and he’s (partly) right) is Henry’s expectation of Yahoo’s highly unsubtle method of gaining Low market expectations.

    I’m only a young and thick boy from nowhere, but this is my take….

    Yahoo is run by the most experienced smartest people, while the 2nd stanford pair were
    still in metaphorical nappies/diapars when the first were sprinting – they’ve seen the internets real life-cycle.

    When I want financial information i go to finance.yahoo, when I want a general search I go to Google, when I’m not happy with that I go to yahoo and if I’m looking for jobs its (hotjobs.)yahoo again, but if it’s local, after the specialists it’s map/local.google, ditto news. The Point is that the web is becomming a series of verticle broad-narrow searchers/information-aggregators.

    Until the next generation of searching technology which is based on ubiquity, understandabilty and anticipation come along, aided by the semantic web (though alexa’s been going for a while!), There’s not going to be radical change.

    As the CFO, Susan Decker was doing her job perfectly – worst-case scenario.
    Factually, there’s also a connection to reality, with so many web-assets, the company is simply not as reliant on search, even if it had a 60% share via affiliates, as that other wonderfully ambitious one-trick pony is, there just wouldn’t be the same effect on the company.

    Then, to yahoo’s search benefit, there’s all this social networking development, plus the previous various search technology aquisitions before the current round of flickr et al, add in-house search development – what i see is that the basic search service is going to get better anyway if people bother trying it; but then think of all these social tech./web2.0 assets as getting Amazon’s mechanical Turk work done on the cheap for the active (proprietory) development of the sementic web, and you have at least a part of the future of the web.

    Anyway, Finally, what I really see, and am amazed that no one else has, is the story of America’s favourite greek condoms!

    Kind Regards,

    Shakir Razak.

    P.s.
    People who “unwind their positions” based on this, shouldn’t even be allowed near any share investment, no doubt they’d also have missed out on apple and almost any other change-makers (because they weren’t told while it was being done)!

  16. Shakir Razak says:

    I’m in absolute awe and Shock about this.

    This site is read by the most smartest, cleverest people in the tech/net industry, and yet the best we can come up with (and he’s (partly) right) is Henry’s expectation of Yahoo’s highly unsubtle method of gaining Low market expectations.

    I’m only a young and thick boy from nowhere, but this is my take….

    Yahoo is run by the most experienced smartest people, while the 2nd stanford pair were
    still in metaphorical nappies/diapars when the first were sprinting – they’ve seen the internets real life-cycle.

    When I want financial information i go to finance.yahoo, when I want a general search I go to Google, when I’m not happy with that I go to yahoo and if I’m looking for jobs its (hotjobs.)yahoo again, but if it’s local, after the specialists it’s map/local.google, ditto news. The Point is that the web is becomming a series of verticle broad-narrow searchers/information-aggregators.

    Until the next generation of searching technology which is based on ubiquity, understandabilty and anticipation come along, aided by the semantic web (though alexa’s been going for a while!), There’s not going to be radical change.

    As the CFO, Susan Decker was doing her job perfectly – worst-case scenario.
    Factually, there’s also a connection to reality, with so many web-assets, the company is simply not as reliant on search, even if it had a 60% share via affiliates, as that other wonderfully ambitious one-trick pony is, there just wouldn’t be the same effect on the company.

    Then, to yahoo’s search benefit, there’s all this social networking development, plus the previous various search technology aquisitions before the current round of flickr et al, add in-house search development – what i see is that the basic search service is going to get better anyway if people bother trying it; but then think of all these social tech./web2.0 assets as getting Amazon’s mechanical Turk work done on the cheap for the active (proprietory) development of the sementic web, and you have at least a part of the future of the web.

    Anyway, Finally, what I really see, and am amazed that no one else has, is the story of America’s favourite greek condoms!

    Kind Regards,

    Shakir Razak.

    P.s.
    People who “unwind their positions” based on this, shouldn’t even be allowed near any share investment, no doubt they’d also have missed out on apple and almost any other change-makers (because they weren’t told while it was being done)!

  17. Shakir Razak says:

    I’m in absolute awe and Shock about this.

    This site is read by the most smartest, cleverest people in the tech/net industry, and yet the best we can come up with (and he’s (partly) right) is Henry’s expectation of Yahoo’s highly unsubtle method of gaining Low market expectations.

    I’m only a young and thick boy from nowhere, but this is my take….

    Yahoo is run by the most experienced smartest people, while the 2nd stanford pair were
    still in metaphorical nappies/diapars when the first were sprinting – they’ve seen the internets real life-cycle.

    When I want financial information i go to finance.yahoo, when I want a general search I go to Google, when I’m not happy with that I go to yahoo and if I’m looking for jobs its (hotjobs.)yahoo again, but if it’s local, after the specialists it’s map/local.google, ditto news. The Point is that the web is becomming a series of verticle broad-narrow searchers/information-aggregators.

    Until the next generation of searching technology which is based on ubiquity, understandabilty and anticipation come along, aided by the semantic web (though alexa’s been going for a while!), There’s not going to be radical change.

    As the CFO, Susan Decker was doing her job perfectly – worst-case scenario.
    Factually, there’s also a connection to reality, with so many web-assets, the company is simply not as reliant on search, even if it had a 60% share via affiliates, as that other wonderfully ambitious one-trick pony is, there just wouldn’t be the same effect on the company.

    Then, to yahoo’s search benefit, there’s all this social networking development, plus the previous various search technology aquisitions before the current round of flickr et al, add in-house search development – what i see is that the basic search service is going to get better anyway if people bother trying it; but then think of all these social tech./web2.0 assets as getting Amazon’s mechanical Turk work done on the cheap for the active (proprietory) development of the sementic web, and you have at least a part of the future of the web.

    Anyway, Finally, what I really see, and am amazed that no one else has, is the story of America’s favourite greek condoms!

    Kind Regards,

    Shakir Razak.

    P.s.
    People who “unwind their positions” based on this, shouldn’t even be allowed near any share investment, no doubt they’d also have missed out on apple and almost any other change-makers (because they weren’t told while it was being done)!