A Search Eulogy For Yahoo

And then there were two.

Make no mistake, Yahoo’s out of the search game. I know the spin. Better user interface, new ways to innovate, a winning play. Let’s not kid ourselves. They’re done. Not today, not necessarily in a year, but down the line at some point. Done.

And it’s sad, because they were one of the originals. There was a time when the mighty Yahoo roared above all other search engines. When people were so worried about being listed in Yahoo that they pondered lawsuits over the issue, because not being in Yahoo was like not being on the internet at all.

Sound familiar? Yeah, Yahoo was the Google of its day. Funny to write that — it should be Google is the Yahoo of its day, but that’s how the tables turned in the search space.

Yahoo started out in search as a human-compiled directory. Editors, finding sites, writing short descriptions about them. It worked at first. When it didn’t, Yahoo had partners that “crawled” the web automatically to provide “backup” to its directory results. Open Text was its first partner. Later came AltaVista, then Inktomi, then eventually Google.

Ah, Google. It demonstrated that you could index millions (now billions) of pages AND have relevancy. Why use a card catalog-like human directory when you had a tool like Google that could read every page in every book in the library and pull back the matching pages?

Eventually, Yahoo decided it needed to own crawler technology. In 2003, it bought Inktomi and AllTheWeb. It also bought Overture, to have paid search technology and got AltaVista as part of the deal. All these things it needed to own, we were told, because search was so essential that you couldn’t outsource:

Given how important search is to our businesses, we really needed to control our own destiny in this space and not be dependent on any one third-party provider

That’s what I was told at the beginning of 2003 by Jeff Weiner, then senior vice president of search and marketplace at Yahoo. What’s changed since then? How did search go back to being a commodity to Yahoo?

Microsoft squeezed it. No blame to Microsoft. Yahoo was sitting there with leadership that couldn’t communicate clearly how it was a strong second-place player to Google. It seemed weak, ripe for the picking, and Microsoft went to pluck it last year. Google tried for Yahoo itself through a partnership deal. The US Department of Justice, like Amy Winehouse, sang “No, no, no.” Do that, and we’ll take anti-trust action against you, Google.

Microsoft never went away, though to its credit, it continued to improve its own search offering making it even more credible. Bing’s a long way from being proven. Perhaps it might never have succeeded. But it got buzz. Not only was it not embarrassing, it was impressive to some. Yahoo didn’t seem as necessary to Microsoft’s plans.

We’ll never know if Bing could have succeeded on its own. Or, maybe we will, if the proposed deal doesn’t go through. It’s still just a proposal, subject to investor and regulatory approval. But if it does go through, Microsoft becomes the number two search player. It controls the core search technology. Yahoo will have “parity” with Microsoft to use the search technology, we’re told. Soothing-sounding words, but parity doesn’t matter when Yahoo seemingly has given up on search as a top attraction overall.

Yahoo CEO Carol Bartz has made plenty of noise about how Yahoo isn’t just a search engine. Or not even a search engine, at times. How Yahoo has some of the web’s top destinations. That’s true, all true. But search was a leading property as well, for Yahoo. Yahoo wouldn’t consider outsourcing its email or IM services. Wouldn’t decide that its Yahoo Finance area could be powered by someone else. So why’s search got the boot?

Because Microsoft wants it, and they weren’t going away. Neither was Bartz standing up to definitively say that in the long term, it made more sense for Yahoo to keep search as a core technology. That few companies had such crown jewels. That technology alone a year ago worth $1 billion to Microsoft didn’t suddenly become worth no upfront payment a year later.

But also because Yahoo seems to have no choice. It keeps losing talent. It’s fine to have a great machine, but someone’s got to run it — keep developing it. So if I sound harsh about Yahoo getting out of search, I’m also understanding. It would have been incredibly difficult to keep it.

AOL and Lycos are two examples of portals that gave up their own search technologies and watched their traffic drop. Perhaps Yahoo will be the exception. Perhaps it will surprise me and be a long-time search player — a place where substantial amounts of searches happen. Part of me hopes it plays out that way, if only for nostalgic reasons.

But I doubt it.

For more coverage from Search Engine Land of today’s announced search deal between Microsoft and Yahoo, please see:

We’ll also have more stories to come as we keep analyzing today’s news.

Postscript: I avoided reading most coverage since the announcement so that I could get some of my own thoughts out. Now I’m poking around. Jason Calacanis has an excellent Yahoo committed seppuku today post worth reading. We have similar views in general on today’s news.

Related Topics: Channel: Industry | Microsoft & Yahoo Search Deal | Stats: History | Top News


About The Author: is a Founding Editor of Search Engine Land. He’s a widely cited authority on search engines and search marketing issues who has covered the space since 1996. Danny also serves as Chief Content Officer for Third Door Media, which publishes Search Engine Land and produces the SMX: Search Marketing Expo conference series. He has a personal blog called Daggle (and keeps his disclosures page there). He can be found on Facebook, Google + and microblogs on Twitter as @dannysullivan.

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  • http://www.searchmarketingcommunications.com Cohn

    Indeed sad… Search market consolidation was inevitable though.

    Embraced, Extended and Eviscerated.

  • http://advertising.yahoo.com/ yahooguy

    So negative. What happens when the future of search is not search as we currently know it? What happens when the day comes when 90% of people use their mobile phone to search? What if people never really came to Yahoo to search but to check their news, sports, or whatever and just used the search bar because it was there. They never really cared who powered it. What if the merge of the two technologies is better than anything we’ve seen so far?

    I have hope that this will be a win for everyone. Of course working here, I have to.

  • Darrin Ward

    Yahoo may have been somewhat original in its search solutions, but the fact remains that they have not made significant gains in market share as a result of their approach. Just imagine how much they have invested in the initial production, and their ongoing monthly outlays to maintain all of the resources that are required to keep a full-scale search engine operating. Let’s not even speak of the Panama debacle.

    Yahoo is in a very vulnerable position. Just look at their income statements; net income has been steadily declining for years despite rising revenues i.e. they are a terribly managed company. It’s obvious that Yahoo don’t have the financial resources to continue on their current path. Microsoft, on the other hand is a very well managed company, financially speaking, and they do have the financial resources to develop and maintain a competitive search engine. Whether or not Microsoft can pull it off however is another question.

    By pulling the plug on their full search engine and using results delivered by Bing, Yahoo can use the realized savings into advertising their “new and improved” search engine, which may theoretically help their market share. Of course, that strategy didn’t work when Yahoo search was being powered by Google – people still flocked to Google because they knew it was Google that was really providing the value. Bing are probably hoping that the same will happen again and that people will flock to Bing. I’m not convinced. But WOW…. a 10 year deal is amazing. Microsoft know how to cut deals!

  • http://www.brickmarketing.com nickstamoulis

    Yes, it is tragic…but as Carol from Yahoo stated recently they are not only a “search engine” company…It should be interesting to see if their traffic trends downward or if search will decrease and all other content areas of their community will remain in tact.

  • BloodBought357

    I have been using Yahoo for over 15 years and think the demise of this fine and prominent site would be a travesty of the greatest proportions. I hope you are wrong at least, not in my life time.

  • http://lookyloo lookyloo

    I was just curious, I know it’s not about Yahoo but has anyone here heard of Tazoodle yet? If so what do you think of it? I’m asking because I’m definitely not an expert on SE’s or even close and I was wondering what cutting edge people thought of it.

  • http://www.feedbo.com/ feedbo

    Let the Bing vs. Google wars begin.

  • ftchris

    More of an elegy than a eulogy. Sic transit.

  • http://www.InternetOMG.com alpern

    Danny….What I did not see in your write-up is if you feel that this is conceivably the first step in a dance that seems to be choreographed so that we will ultimately see Microsoft acquiring Yahoo! in its entirety.

  • http://fakesteveballmer.blogspot.com steveballmer

    You guys may have heard in the media today that I said the Microsoft will commit up to 10% of it’s profits to developing our search and web resources, the key component being Bing.com. Why they think this is such a big deal is a mystery to me; I’m only talking about 2-3 billion dollars a year. What they should be asking is, “What does Steve plan to do with the other 90%?”
    Well, just let me say it this way, “There’s more stuff out there than the internet!”
    I’m talking: Theme Parks (VistaWorld anybody?), Circuses, computerized furniture stores, Casinos, Malls, Toys, Food, Health spas like my personal one back at the office where I am WELL attended to!
    Think BIGGER people! The Internet is not enough!

  • achates

    Yahoo! isn’t getting out of search – people will still see Yahoo! search as Yahoo! search, the only difference will be a tagline on the results page. Most Yahoo! search volume comes from Yahoo! pages and there’s no reason to think it won’t continue to do so. So, Yahoo! should still see about the same volume of search traffic, but won’t have to pay the very large costs of providing it, while still getting the great bulk of the revenue.

  • pineresin

    Good read. I’m a former yahoo and I agree mostly with you. However for 2003 yahoo acquisition of AllTheWeb. It’s part of Overture deal too (like with AltaVista), not a separate acquisition.

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