nicolas leroy

About the Yahoo! / Microsoft search deal…

August 04, 2009

For the past days, my Google Reader has been flooded by news and analysis regarding the Yahoo! / Microsoft deal about search. Among all those articles, this excerpt from a ReadWriteWeb article summarizes pretty well what I think about this deal:

At its core, this agreement means that Yahoo has given up on its search engine business. Microsoft will be able to increase its market share in the search engine and search advertising market. Yahoo will receive revenue from Bing searches generated on Yahoo’s sites and become “the exclusive worldwide relationship sales force for both companies’ premium search advertisers.” What remains to be seen, though, is what will happen to Yahoo’s investments in interesting search technologies like BOSS and Search Monkey. Integrating these technologies, which are tied to Yahoo’s search engine, could prove rather difficult for Microsoft. We will also have to wait and see what’s going to happen to Yahoo’s search APIs.

If anything, the Yahoo Search team will probably not be too happy to hear Yahoo suggest on its blog that Yahoo used to offer a “great” search experience but that Bing will offer an “awesome” one. In a call earlier this morning, Yahoo CEO Carol Bartz announced that some employees from the Yahoo search team will move to Microsoft, while others will move to the display business.

Sure it’s easy to understand the logic from a business perspective (while some could argue the deal is more interesting for Microsoft than for Yahoo! in the long run). But from a pure product point of view, I feel Yahoo! has been more innovative than Microsoft on the Search side : BOSS and SearchMonkey are indeed great innovations that I hope will still exist in a Yahoo! search experience built upon Bing.

Also, following this announcement, we may wonder how the Yahoo! verticals will be integrated into Bing. Let’s take shopping for instance : Yahoo! Search displays shopping placements for shopping-related searches that redirect users to the Yahoo! Shopping vertical, while Bing brings its own shopping experience through Bing Cashback. Part of the answer is on this interview of Prabhakar Raghavan, head of Yahoo! Labs in Reuters:

Raghavan said much of the savings [of the search deal with Microsoft] will come from back-end infrastructure technology, now that Yahoo no longer invests in the resources to crawl and index the world’s vast number of Web sites.

But he said that Yahoo will continue to develop innovative search and communications products.

“In terms of satisfying user intent, the hard work and in some sense the bigger growth opportunities for differentiation are not the back-end of crawling and indexing, but really surfacing and assembling content the right way to satisfy user intent,” he said.

Real Time search is an increasingly popular online activity where Yahoo’s approach to search could provide a compelling user experience, Raghavan said.

So it’s likely the user experience of a Bing-powered Yahoo! Search will be really different than the “classic” Bing experience, and that Yahoo! will try to mash up data from its various properties (or external ones like Twitter) with Bing results. Which means it’s still interesting looking at the experiments Yahoo! does on its search result pages, like this one reported by SearchEngineLand:

When I read the announcement last week, I was pretty sad seeing Yahoo! dropping all its investment on search; but if the deal offers enough flexibility for Yahoo! to innovate and focus on search experience, that could be an interesting move.

EDIT: 5mn after having pushed the “publish” button, I’ve read this striking article on BusinessWeek about this deal. Excerpt:

[…] Microsoft’s obsession with taking Yahoo’s second-place position and adding it to its third-place position is not an indication that it’s time to sell. Far from it. When Microsoft is interested in a space it is a clear sign that you should be investing in it—not selling it.
[…] Nintendo (NTDOY) didn’t give up when Microsoft came into the video game space—it innovated. Now the Wii outsells the mighty Xbox 50 million to 30 million. That is how you fight Microsoft: You innovate. Steve Jobs knows this, Nintendo knows this, and Oracle (ORCL) knows this. Yahoo, apparently, did not get the 40-year-old memo.
Aggression and innovation win. Period.
To say it clearly: Microsoft does not enter a market unless it’s important, huge, and on the way to becoming even bigger. Microsoft is the buy sign, not the sell sign. […]

[…] Microsoft’s obsession with taking Yahoo’s second-place position and adding it to its third-place position is not an indication that it’s time to sell. Far from it. When Microsoft is interested in a space it is a clear sign that you should be investing in it—not selling it.

[…] Nintendo (NTDOY) didn’t give up when Microsoft came into the video game space—it innovated. Now the Wii outsells the mighty Xbox 50 million to 30 million. That is how you fight Microsoft: You innovate. Steve Jobs knows this, Nintendo knows this, and Oracle (ORCL) knows this. Yahoo, apparently, did not get the 40-year-old memo.

Aggression and innovation win. Period.

To say it clearly: Microsoft does not enter a market unless it’s important, huge, and on the way to becoming even bigger. Microsoft is the buy sign, not the sell sign. […]


2 commentaires

Pamela
on Aug 05, 2009 / 7am
It’s going to be a deadly combination, I must say. It would be really beneficial for the internet users, when Yahoo’s conventional features will be added to Bing’s innovative cash back as well as real-time search features.

It has become a trend to combine traditional search with real-time search; since real-time search is on high demand. Many search engines are now adding real-time search feature to the conventional one. For instance, AAfter.com cash-back search , that I mostly use. It also provides both traditional and real-time search. Moreover, it offers cash back as Bing does.

Cheers!
Pamela

nicolasleroy
on Aug 05, 2009 / 7am
Hi Pamela,
Cashback is contentious; you're right mentioning it as an innovative part of Bing, but that can be seen as a competitor to Yahoo! Shopping... Interesting article by Brian Smith this morning on the subject.
Nicolas