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I don't understand how such a move is profitable for a business. Can someone please point me to some articles that discuss this?


The point of Joel's article is that "Smart companies try to commoditize their products’ complements."

For what I understand, Yahoo is a media company, and as so it may try to commoditize a natural complement of today's media companies, which is data search.

That article is a classic but I don't really understand how it applies in this case.

Smart companies commoditize their products' complements (something that needs to be bought with the product) so that whoever wants buy their product has a large variety of offerings to select from. For instance, MS-DOS's ability to run on any standard PC architecture machine commoditized the PC.

It's not clear how commoditizing data search makes selling media to consumers easier, because consumers of media don't buy data search. In fact they expect it to come for free from the media company.

Might it not have the opposite effect instead? That is, it makes starting up a media company cheaper and allows competitors to spend more money on acquiring media?

Yahoo! gets code improvements back and, by being the originals and having the most experts familiar with the entire code base - and it is huge, they retain their competitive advantage. They also do this while fostering good will and, potentially, reducing the number of bugs, improving security, and increasing efficiency.

It's brilliant, in a way. There are risks, but they are small and mitigated. They may even end up selling support and customizations, or enabling that market. The upside potentials are many and the downsides are few and only risk small impacts.

Hell, you can get RedHat for the low cost of nothing, just by signing up for it. On top of that, they will give you every single last line of code you want. They'll give you all of the code, and do it for free.

Yet, they are a successful for-profit company. They don't even accept financial donations, as far as I know. They aren't the wealthiest company, but they are doing quite well and not suffering financially.

Open source doesn't mean no profit. It just means additional rights for the source code and/or user. (Different licenses prioritize different liberties and have different goals.)

Good point, thanks for the excellent article!

My idea is that:

1) It attracts developers who will provide fixes, bug reports, documentation, etc. for free (or even draw potential full-time developers for the project).

2) It makes the project look more "trendy" and appeals to developers who will try not to use proprietary software; this is the same move that .NET did and it seems to have worked very well.

2nd point seems valid. 1st one however suggests that people will try to use it to their own benefit - some of them to compete with Yahoo. Why else would they contribute to the project?

Proprietary code is expensive to maintain. Even though there's a dedicated team of a few dozen people that has been working on Vespa over the years there are thousands of developers who have been contributing to ElasticSearch, Lucene, and other projects in the open source world that are in a similar space. Getting contributions to Vespa will help it grow and evolve to make it better -- much like Yahoo did when it evolved Hadoop and scaled it out, much like Yahoo did when it help caffe, druid, hive, oozie, openstack, pig, storm, shark, spark, and tensorflow and tons of other projects (that it either created, co-created, or took from others and contributed improvements back to help make better for all).

Sharing code is fine since we use lots of shared code too. We don't sell code. So if someone wants to use Vespa to make an amazing product and make tons of money, we hope they do. We know that sharing Hadoop helped our competitors, but we also know that the revenue stream comes from ads. So we're glad to share code that makes tech better for everyone. As it turns out, many tech companies feel the same way and openly share code with the industry to help us all get to better tech platforms. In the tech space, it's not about grabbing more of the pie, it's about making a bigger pie. The internet revolution is young and the more we built it in the open, the better it will be for all of us.

> We know that sharing Hadoop helped our competitors, but we also know that the revenue stream comes from ads.

This is not clear to me, can you please explain? I'm still stuck at thinking "if you help your competitors then you give up some of your market share".

EDIT: your pie analogy is really nice, I guess it means you grow the whole market by sharing tools like Vespa so you get a smaller slice of the bigger pie. I still don't get how the "revenue stream comes from ads" part relates to everything else.

Some companies make money by licensing software. They are less willing to publish code since, to them, code is revenue and they don't want to give it away. Internet-media companies view code more like a required expense. Giving code away 1. helps reduce carrying costs 2. attracts developers 3. forces out of dependency debt, 4. encourages developers to make their code better 5. builds skills that transfer to other companies 6. make it easier for us to find people who already know the tech we use. etc. etc. There are TONS of upsides. Case in point: we can hire a Hadoop developer. Had we never open sourced the code, we'd have to keep an army of developers in house for a decade. Instead, they can leave to form startup companies (if that's what they want to do) and we still get the benefit of their creative effort. We also invested in one of those companies, so when they make money, we do too. Developers want to work at Yahoo (really) since it will help them build skills they can take elsewhere, or they can stick around and use those skills internally. Either way, why would a developer work on proprietary code when they can work on open source code which will give them more options.

There's a good give and take in the tech world. Sure, our code has helped Facebook and Google eat our lunch. But we don't blame the tech sharing for that -- since they've contributed quite a bit too. We work rather closely with them on a bunch of projects -- which help us all.

Sure, there are some projects that we'd consider the "secret sauce" that really differentiates us from others. We won't open source those. But a lot of code is there 'cuz we need to move bits around quickly. Sharing that code is not going to make or break a multibillion$ enterprise. It's actually going to help make it better in the long run.

To so make money: our sales people to do that, not the tech people. The sales people are given amazing products, and huge audiences to sell to the advertisers. Whereas a podcast might have a million subscribers, a popular radio program have 10 millions listeners, a TV show getting 50 million viewers, or a wireless company have 150 million subscribers, we have over a billion users -- and the advertisers LOVE that. So we all sell ads, and who ever does that better wins. But as tech folks, we're collaborative. It's not really a new thing, it's very much part of the fabric that has helped the internet evolve.

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