

Yahoo committed seppuku today - timtrueman
http://calacanis.com/2009/07/29/yahoo-committed-seppuku-today/

======
sachinag
I think he's incredibly wrong, and I'm surprised by it because he founded
Weblogs, Inc. and should know better.

Yahoo is now a media creation and curation company. Yahoo Sports is number
one, Yahoo News is top five (HHS Secretary Sebelius had an exclusive op-ed in
YN yesterday), OMG is killing TMZ and others, and so on and so forth. Yahoo's
strategy of original content and great curation is all about stickiness. Let's
be clear - Yahoo will still sell the very best ads for themselves, and
Microsoft gets that sales expertise as well. No one on the face of this earth
sells premium online ad space better than Yahoo.

Yahoo has clearly decided that they won't play in search any more, and that's
a rational decision - they only played in search for a small period of their
history. They were powered by Inktomi before Google, and now will be by Bing
for the next ten years, and presumably something other than Bing after that.

~~~
jamesk2
Bing on Yahoo search results pages is a product endorsement. Users will become
familiar and comfortable using a Bing branded product. Bing Sports is a text
ad on the current "sports" search results page. It'll go from, WTF is Bing to,
"oh Bing, they have sports news"

It is like BMW switching to Toyota engines and putting a little sticker on the
dashboard that says Powered by Lexus. How long will BMW last when that
happens?

~~~
froo
_"It is like BMW switching to Toyota engines and putting a little sticker on
the dashboard that says Powered by Lexus. How long will BMW last when that
happens?"_

Unfortunately, that analogy just doesn't work in the car industry. People will
still buy the BMW because it is a BMW.

To back it up, I'll give you a two real world examples, both to do with
another car Manufacturer - Porsche.

When Dr Ferdinand Porsche first created his company, his Porsche 64 was
created using many parts from the VW Beetle.

From my personal experience, back in 2002, I was helping my brother strip down
his 1986 Porsche 944 turbo to be raced in 03.

While pulling the car down, I noticed that many of the parts were manufactured
by Audi and VW (which admittedly owns Audi). Even while we were stripping the
sound proofing material off the body, I found out that the body of the car was
manufactured by Audi, which to me was very surprising (given the body was one
of the main selling points of the car at the time, even Mazda ripped off the
design for the RX7).

If I had to give a rough breakdown in parts, I would have said that particular
model was a 3-way split when it came to who's parts were in the car.

As for Porsche's company performance, they are one of the strongest car brands
worldwide and definitely one of the most profitable, in 07 having made 5.8
Billion Euro profit off of 7.3 Billion Euro in revenue.

Currently, the only thing that is causing them headaches is their financial
acrobatics, not the fact that their cars are made out of other manufacturer's
parts.

So unfortunately, your analogy just doesn't hold up.

~~~
jamesk2
Porsche 911 Turbo: ENGINE BY VW

or - Your 130 thousand dollar automobile is made by the same people who make
your kids 15 thousand dollar automobile.

It would turn a lot of people off Porsche and boost VW's brand image.

I think many people are aware that major brands OEM parts from all over.

But there isn't a sticker on the dashboard saying one of the most expensive
parts is from a specific maker.

My main point is that Yahoo is transferring a lot of brand equity to Bing. If
there was no Bing branding on the SERPs then this would be much less of an
issue.

And really, some hackers pop the hood and look at engines but really do most
people? Do most people even know how to change their own oil or even bother
to?

~~~
froo
Yes, but you miss the point.

People own these luxury vehicles BECAUSE of the status associated with them,
not because of who produces what parts for the car.

So the analogy comparing the Yahoo situation to BMW was a bad one, which was
my point - I wasn't trying to say it was a bad move by Yahoo.

Time will tell on that one.

~~~
jamesk2
I think we're disconnected on this because my point is that branding Yahoo
results pages with the Bing logo is horrible for Yahoo.

And yes, while luxury brands use many parts not specifically made by them,
they do not promote another brand who is a competitor.

Another analogy maybe? If the Apple iPhone had a splash screen that said
"Powered by Microsoft" it would harm the brand. Apple knows this and while my
mac is powered by Intel, there's never any "Intel Inside" branding.

------
bkovitz
"Innovation is all you have"? Microsoft has never innovated, not even at the
beginning. Many big players in many industries have never been innovators.

These guys have something else: a strong bargaining position. "Innovation is a
fleeting advantage." Cornering a market, setting up barriers to entry—those
are time-tested and effective ways to make serious money.

~~~
hyperbovine
Thank you. I can't count the # of times I've heard Microsoft described as
innovative. Yet, nearly every time they try to innovate they fail. MS Bob
anyone? Or how about that home automation pitch they made in the late 90s? Or
Cablesoft / MS Media Server. Nearly every single one of their successes came
from copying the competition (XBox, Windows) or through acquisition
(Frontpage, Hotmail). And a lot of their failures (Zune, Vista, Win7 TBD) came
from un-successfully copying the competition. Office is home grown, makes a
lot of money and seems to innovate on its own, but it seems like the exception
to the rule.

~~~
bkovitz
It's part of the mythology of American capitalism: if they're a big winner,
they must be a big innovator, because innovation drives the economy!

Don't get me wrong, I love American capitalism, and I don't think innovation
trumps all other factors (like reliability). The myth of Microsoft innovation
is just one of those peculiar cultural myths that, in this case, blocks out
the reality for people who don't work in the field.

~~~
pbhjpbhj
Reliability trumps innovation if people want to use the same stuff for a long
time. In the consumer market it seems it's all about new stuff. People chuck
out perfectly serviceable items because there's a new model they want. Which
companies would bother to make a reliable mobile phone or computer for the
mass market.

The facade of innovation works for larger items too. Why create a vehicle that
lasts long after the 5 year bodywork warranty when you're just reducing your
market. Entice people with the new model, make sure your goods don't last too
long - that appears to be the capitalist way.

------
bjplink
The very first thing I thought of when this deal was announced was how similar
it felt to how Google first got traction by lending their technology to a
Yahoo "front-end." This feels like throwing the baby out with the bath water
all over again.

I don't normally agree with Calacanis (although it's hard to argue with his
success) but he's dead on about this I'm afraid.

~~~
jasonmcalacanis
Note: It's actually OK to agree with me 38% of the time (i.e. the actual
percentage of time I'm correct).

~~~
hymanroth
Is you real or is you fake?

~~~
jimboyoungblood
c'mon, what are the chances someone is gonna create a fake calcanis account on
HN?

~~~
hymanroth
Dunno. That's why I asked. Pretty high?

~~~
jasonmcalacanis
well, I'm using my Facebook account, so chance are this is really me. :-)

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pclark
surprisingly good [albeit ridiculously hard to read. grey on white? ugh] post.

I liked the aggression + innovation = fighting.

~~~
Herring
<http://lab.arc90.com/experiments/readability/>

~~~
mattculbreth
Wow now I can read Daring Fireball, thanks!

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vijayr
suicide? how?

which is better? giving up the areas in which yahoo can't win, getting a good
deal in return and concentrating on the areas they are strong in or trying to
fight a losing battle, sinking millions of dollars in the process?

His logic seems to be 'search is very important so yahoo shouldn't give up its
second place'. It doesn't matter search is uber important, what matters is
whether yahoo can keep its place. They certainly feel they can't, so its very
sensible to get out before the going gets really bad.

good business is all about deciding which areas to play, and knowing when to
leave

~~~
papa
I agree with you, but imho Yahoo should have made these decisions years ago.
Yahoo has clearly made a lot of bets it hasn't been able to follow through on
(acquisition bets alone tell a sorry tale: Broadcast, Geocities, Inktomi,
Overture).

When I was at Yahoo during the "dot bomb" crash. Yahoo was scrambling to
decrease its reliance on advertising and made a big push into premium/paid
subscriptions. Well that fizzled. As did Terry Semel's entertainment strategy
and the subsequent attempt to go toe-to-toe with GOOG.

Personally, I like the entertainment/media portal strategy (out of the
remaining options available). But at this point it still feels like Yahoo is
being pushed into this strategy rather than boldy pushing forward with it. I
think that's partially why it feals more like defeat/retreat at this point
than anything else. Present-day Yahoo just can't shake that feeling of
failure/lost opportunity in the eyes of many observers. That's gonna hound
them for a long time until they can garner up a bona fide hit.

------
bkovitz
This deal is the most demoralizing news I've heard in a long time. It calls
for some kind of ritual lamentation. Any ideas?

~~~
scott_s
Honest question: why do you find it demoralizing?

~~~
messel
I'm guessing that he dug Yahoo in the old days much like myself. Kinda weird
seeing them working a deal with MSFT. I guess Google needs some competition in
search.

~~~
scott_s
I guess I see as positive since I've thought for years that Yahoo could not
continue on the path they're on. This seems like a necessary change for the
better.

------
rythie
Is tweaking some complicated algorithm, really innovation anyway?

I think Yahoo are better off leaving this problem to Microsoft. People don't
tend to call Microsoft innovative and search is an established place that they
want to be in - this is normal behavior for them. Microsoft are in a good
position for doing search by acquiring powerset and other companies (as Jason
mentions). Microsoft this more so they can compete with Google directly and
Yahoo have better sense. Yahoo is doing stuff that neither Google or Microsoft
do well, like Flickr, Del.icio.us, News and other content.

Innovation from the customers point of view would come from improving the
interface to search, which Yahoo can do without doing the algorithm
themselves.

If look at what they offer with the BOSS and search monkey APIs
<http://developer.yahoo.com/search/> Yahoo is keen on this direction. At the
Yahoo Hackday London in May they were pushing these APIs with talks and
handing out documentation etc.

------
thomasfl
In ye olden days, before google, yahoo was the search that returned the best
results ordered by relevance. They had to create their index manually to do
so, but it kind of worked for a while.

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TallGuyShort
I'm really surprised about Yahoo's market share. I've generally found it a
lower quality search than both Bing and Google, and other than this deal I
haven't heard anyone talk about it at all. I know a lot of people that have
their home page set to MSN by default, but I haven't heard of Yahoo being
someone's homepage in years.

What's everyone else's experience with this? Does anyone here use Yahoo, and
if so, why?

~~~
michael_dorfman
I don't use Yahoo search, but my start-page is MyYahoo, and has been for eons.
Because of this, a fair bit of the news I read is via Yahoo's aggregators.

------
jalammar
With Twitter’s repositioning as “real-time search”, and search becoming a two-
dog race, both Google and MS must be salivating to buy Twitter. I wouldn’t be
surprised if either of them laid down 1+ Billion to get ahead under these
circumstances.

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ErrantX
> Microsoft does not enter a market unless it’s important, huge and on the way
> to becoming even bigger.

Wait? So they've only just entered the search market? hmmm.

Ramblings methinks.

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Ardit20
"Chapter three will be the two-horse race of Microsoft and Google"

Starts singing - - - I'm so excited.....

Dude, Yahoo search was dying anyway, which is a shame because people like
Yahoo, it's just that they have not been advertising so much. Like google had
the benefit of viral marketing, to counteract it, Yahoo should have
aggressively marketed itself to put its name out there. I mean, people in
Europe probably hardly know of Yahoo compared to Google, which I do not think
is true in the US.

So, in an ideal world I would have liked the Yahoo search brand to be kept,
but the brains behind it to be of microsoft. This way, if played right, there
could be a serious competitor and who knows we may get a 60 - 40 market share,
and in that dream world, the publisher, or the user would hold the power.

As a side note, interesting that although Yahoo stock has gone down around
11%, Microsoft's stock has barely moved, I would have expected it to shoot up.

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c00p3r
So, there are just Google and Microsoft, and that is very good for Google,
because a good karma matters!

And where is Apple with "the search for rest of us"? =)

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TweedHeads
Jerry Yang would have never sold out.

Now this newcomer gets greedy, some money exchanging hands under the table and
now Yahoo search is dead.

Carol Bartz? she will be forgotten quickly.

