I know I've been away long enough for y'all to wonder if the post I made before was going to be a one-off. Well, rejoice–I have plenty of more material in my ongoing quest to expose the whole search world. Since we discussed Google's successful attempts at mind control last time, I figure it's about time to talk about Yahoo. Darin wanted me to remind everyone that the opinions expressed in this feature are not necessarily those of Darin, and should not be taken as an endorsement, etc etc insert legalese here. Let's get down to it, shall we?
**Edit: Since this post was written before the announcement of Yahoo's acquisition of Tumblr, I didn't have the chance to comment on it before it came out. But you can see what the lovely Casey Kurlander has to say about it here and what I have to say about it at the end**
A lot of us in the industry can remember a time when Yahoo was the biggest name in the game—before the rise of the Evil Empire Google and the Pretender to the Throne, Bing. At one point, in fact, Yahoo was THE search service. Sure you could go to Ask, or one of those other search sites, but they wouldn’t give you what you wanted.
And then there were the services: Yahoo! Mail. News. Chat. Weather. You could, in theory, accomplish 75% of what you needed the internet for back then without ever leaving Yahoo and that was a powerful model at the time. But then the internet grew. And grew. And the model that Yahoo held onto—the “portal” model that so many search services of the time were rushing to build on—turned to shit in their hands. But more on that later.
There are some people who have said that Yahoo is making a distinct comeback in search. Some have even pointed to the fact that Yahoo has held on to a certain percentage of search all along—not a huge one, mind you, but certainly something, blah blah blah. Most commonly cited research places their market share somewhere in the territory of 14%. But boys and girls, today I’m here to tell you: Yahoo ain’t shit.
The biggest non-secret is that if you do a little digging, you’ll find out that proper Yahoo traffic is in the single digits, a tiny little sliver of the search pie. A serving your constantly dieting sister-in-law would even tell you is too small. Based on actual traffic and actual usage, Yahoo only got about 6-7% of the market for search in 2012.
The problem is that Yahoo has no idea what to do with itself. It’s constantly a day late and a dollar short. Seriously—let’s take a look at their strategic history:
Back in 1998, Yahoo! had the opportunity to license and/or buy Revenue Loop, a new technology for sorting shopping-based search results similar to the algorithm that Google would go on to use for its ad service. Paul Graham of all people, who met with Yahoo to sell them on the tech, commented later that Jerry Yang didn’t even seem interested in the new tech; in an essay about Yahoo’s decline, Graham commented, “The reason Yahoo didn’t care about a technique that extracted the full value of traffic was that advertisers were already overpaying for it…Hard as it is to believe now, the big money then was in banner ads. Advertisers were willing to pay ridiculous amounts for banner ads.” Yahoo would stick stupidly to its banner ads model until it was already too late.
There was also that debacle with Yahoo Paid Inclusion. After years of running what basically amounted to a fucking Ponzi scheme (Hey SEC…), Yahoo launched a program that gave commercial websites guaranteed listings on the SERP after payment. The scheme was—of course—lucrative for Yahoo but it was not terribly popular either among marketers or users. So Yahoo had to do an about-face and just provide those who were actually willing to pay for the service with more frequent site crawls and providing statistics. Seriously, guys. Companies bought into the program on the basis that Yahoo would just feature their site, with no notation that it was advertising—stacking the deck, basically—and got screwed out of it. I wonder if Yahoo gave them a t-shirt.
And before any of you get on me about “Yeah, well… Bing,” I got something to say about that too. When Bing and Yahoo made their historic agreement, one of the provisions was that Microsoft was going to provide a guarantee: if Yahoo’s Revenue Per Search did not match up to an agreed-upon amount (closing the gap with what Google earns per search versus what Yahoo was earning per search at the time), Bing would make payments to Yahoo to balance the shortfall. Guess what. Yahoo’s revenue per search (RPS) has not, since the agreement started, EVER reached that goal. The provision keeps having to be renewed; Microsoft keeps having to pay Yahoo money. And here’s the real shitty part of that: by the time Yahoo is able to contractually get out of the agreement—sometime in 2014, when the five-year mark arrives—they will have spent five years NOT working on search and have to start from scratch or get themselves bought up by some other company. Because it’s not bad enough that Yahoo is the only search engine that has consistently LOST traffic in the last year or so—they’ll be the only search engine that doesn’t ACTUALLY HAVE A SEARCH ENGINE.
Then consider too that just… fuck, every time you turn around Yahoo has a new CEO. Now people want to bitch about Marissa Meyer cutting back on work-from-home and taking an active role in the hiring process. You know what? The smartest thing Yahoo has ever done is hire an ex-Google exec. And Meyer’s probably involved in the hiring process because Yahoo has quite enough idiots already working there. So stop giving Meyer such a hard time. It’s got to be tough being surrounded by folks who think taking 3 years to make algorithmic search happen is a fine timeframe.
And that, guys and girls, is why Yahoo! ain’t shit. And why they’re basically screwed.
Update: Yahoo bought Tumblr for $1.1 billion, which has some people saying “Oh, well, that's a step in the right direction” like fools. Most people are saying this though:
So before y'all open your mouths about it: Yahoo still ain't shit, and they're also now super broke.