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Did Yahoo! Lose the War for the Crown?

Remember when Yahoo and Google were best buds? Well, more like Yahoo was the King and Google did his search work.

Searching for “Yahoo Powered by Google” doesn’t return much today, but there was a time when people “searched” for things on the web rather than “Googling” them. In fact, people didn’t really care so much about search engines- the web was a simpler place where you could find what you were looking for on a portal, and sodas only cost a dime.

Serious- check the wayback machine for google.yahoo.com

Things have changed. Today, news sites and blogs are abuzz about Yahoo’s CEO Terry Semel stepping down, causing many to claim Yahoo has been defeated. But back in 2001 when Semel took the helm Google was little more than the company they outsourced their search to.

Back then Yahoo was a portal people still found useful. There were no aerial satellite photos accompanying your yellow pages search. You wanted to find an attorney in your home town? You went to Yahoo and clicked on “Attorneys,” then on your state, and then on your city (if it showed up) and you were happy to do it.

Google’s own page was steadily gaining ground, though, and over the years their results have met people’s needs faster and more relevantly. Concurrently, they have built a brand on being the innovative & quirky darling of Silicon Valley. Now, in 2007, Yahoo doesn’t seem relevant and Google has been crowned king.

What has Yahoo lost? The search war? Sure Google has 4 times the market share than Yahoo, but neither one is really a search company- they serve ads. And in that arena Yahoo is respectable. Yahoo still has more users than Google, and they stick around longer (according to BloggingStocks). They don’t have Google’s cash reserve, or Google’s profit margins, but despite their current image problem they’re not down for the count- they’re profitable and they made it through tougher times like the dotcom bust.

The Kingdom makes the king, though, and the crown belongs to whoever can claim the heart of the people.

Yahoo has lost favor with the Kingdom. Back when I first registered with them, Yahoo held court with their standard webmail service and their excellent customizable portal, MyYahoo. Seven years later, no one cares. Gmail is constantly being mentioned on blogs and in the news, while newest incarnation of YahooMail was released to thundering yawns.

Google is King right now because they have managed to keep up with the trends people care about. People want to find stuff fast and keep things simple. Done- Google search. People want lots of mail. Done- Gmail. The list of innovations goes on and on at Google labs. Google also made things easier. They made it easier to buy and display internet advertising: what they see as their real business.

Because they’re the one conjuring the magic for the mob, Google’s IPO commanded unprecedented prices for its stock, making it worth more than 4 times Yahoo. Being the king means that Google can recruit the best and brightest, has massive resources to draw from and serves incredible meals. Serious, I’ve been to the Googleplex- the food is awesome.

Personally, I disagree with the argument that the battle is over search engine market share. I think the kingdom hands the crown to whoever meets their needs. Google is relevant because it meets the needs people care most about. Individuals need information like search results, maps, etc. and businesses need to buy adspace.

Right now one of the most talked about sites, Facebook, is sought after because it meets the needs people currently care about most, and it’s not a search engine. In fact, the basic functions of the site (social networks, personal customizable pages) are capabilities Yahoo has had for years. Jeff Jarvis puts it great in his post, which inspired mine:

I’ve also said this, too, before and will say it once more: We debated for decades whether content or distribution was king but it turns out that neither is. The community is the kingdom. The question companies should be asking on the internet — the question Facebook’s Mark Zuckerberg answered — is what they can do to help that community do what it wants to do. Zuckerberg thinks of Facebook not as a media or content company but as a software company. Software enables us.

Can Yahoo win the favor of the people again? Many don’t think so, but there are some great ideas floating around on how they could- after all, Apple did it. Think back a couple years before the iPod became a physical necessity to your survival- before the iMac revolutionized the world with its groundbreaking ability to connect to the internet. People were wondering why Apple even still existed. No one thought they’d reclaim the kingdom, and yet the date the iPhone gets released will probably become a national holiday.


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Max Speed

If the Pole Position Marketing team had a muse—and it does—it would be Max Speed. We love Max’s occasionally off-color, usually amusing and always pointed “Maxisms.” (Maybe “Maxims” would be a better word.) Max gives voice to some of the things we think but, bound by professional decorum, aren’t permitted to say. At least, not out loud. Read Max's full bio.

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