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:

• It’s Finally Official, Microsoft & Yahoo Make A Deal, Yahoo Gives Up On Search
• Live Blogging The MSFT – YHOO Search Press Conference
• Microsoft-Yahoo Deals 2008 & 2009, Side-By-Side
• Micro-Hoo Details: Q&A With Mehdi & Schneider
• The Microsoft-Yahoo Search Deal, In Simple Terms

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.