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Thursday, January 26, 2006

Ya Who?

I'm a little baffled by all of this noise around Yahoo's statement about not being focused on being #1 in search.

Peer-pundits take everything to extremes. Extremes start good conversations, specially in this kind of environment. Its kind of funny to watch everyone punch the topic from one side to the other.

But its also kind of sad -- a kind of Napolian Dynomite solo teather match -- A studied excersize in exploiting momentum for its own sake, with it or against it.

What people seem to forget is that Yahoo is much bigger than search, even if the grass roots go there. Digital media is also bigger than search. To say that there are other relevent score cards, and that these score cards present a better opportunity for lasting advantage is business.

Business is always uncertain, opportunities are never obvious -- certainly not to outsiders, cheerleaders, or enthusiasts. Was Yahoo a genius when they bought Overture? Sponsored search was a novelty at the time. Good move, it turns out. I'm sure there were bad ones, too.

My point is that opportunities do not make themselves, and capitalization requires some level-headed risk taking. In sponsored search MSFT didn't do it, AOL didn't do it. They waited to see if it was real and missed the search advertising game (yeah, yeah, they both make money off of their search-base, but they share it with Y or G today).

Yahoo has said that it thinks they see the next opportunities elsewhere. Can anyone tell me that this is wrong? What is Google doing? Maps, email, video, feed readers, earth. The search tidal wave is receeding and Google knows this as well as Yahoo does. This market will grow slighly faster than the overall online advertising market, and become more an more crowded and commoditized.

Sure, there are all sorts of applications that can and will hang off the side of the gigantic search vessel, and many of these may become very important strategically. Search will be an important aspect of digital media, but not necessarily in a 'who's #1' kind of way.

Audience matters. Search is not the only place to get it. If Y percieves an advantage they can press on other fronts, and is not going to burn all of their fuel chasing yesterday's game, then good for them. They seem wide awake to me.

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