Posted November 20, 2008 4:55 pm by with 10 comments

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It’s only natural after all of this year’s upheavals at Yahoo to have to wonder what’s next for the search giant—and you have to wonder if the board itself is thinking the same thing. While Yahoo continues to make efforts in search, including bringing Glue pages to the US and winning T-Mobile’s mobile search contract, speculation is flying thick and fast that one way or another, Yahoo’s getting out of the business of search.

Not helping things for Yahoo is the departure of Yahoo’s VP of Web Search Technology—leaving for Microsoft. As Valleywag puts it, the loss of Sean Suchter, along with that of Qi Lu who left Yahoo for Microsoft in September, does more than just reduce Yahoo’s staff:

These names may not mean much to anyone outside engineering circles in Silicon Valley, but they amount to this: If Microsoft has recruited Suchter, it has gotten the heart of Yahoo’s search technology without the fuss of actually buying it.

There’s one strategy.

So, just for speculation’s sake, let’s pretend Yahoo is getting out of search, whether by outright sale or by Yahoo’s employee exodus. What’s left for Yahoo?

Some agencies are excited by the prospect of Yahoo focusing on media and display, according to ClickZ:

According to Gregory March, group media director at Wieden + Kennedy, Jerry Yang made the opposite mistake “He was a big proponent of technical solutions over content,” he said. “They could’ve been a great media play but they took a step away from that to try and compete with Google. I think Yang stepping away might turn their focus to more of a media business, which is largely based on the quality of the content.”

Such a shift would be a tough sell for shareholders, given display ad prices continue to drop while search holds steady. But March notes, “If the quality of the content increases and the size of the ad space increases, it could be a viable [path forward].”

Forrester Research’s David Carr weighs in on what Yahoo could do better in the future (though he also mentions search marketing):

  • Search marketing. Though it’s number two, Yahoo has not proven any synergies between owning search technology and an SEM marketplace and display (better targeting, attribution measurement, cross-format campaigns)
  • Social media. Flickr, IM, and Answers do not a business make. Opening up social media & other services for mashup is interesting (see BOSS), but I’m less sanguine on the “social media as air/electricity” metaphor than other analysts
  • Advertising Platform. So far, Yahoo has been far more successful hand-crafting (i.e., on golf courses) integrated marketing campaigns than it has making a technology/marketplace play. Either Yahoo can’t increase the value of remnant inventory via targeting, or it can’t prove it to advertisers, or there’s no demand for targeting. There’s plenty of demand.

What do you think—is there a future for Yahoo apart from search—and Microsoft?

  • Only a few years ago Yahoo was doing a Directory and not SEARCH. How quickly we forget. So they have been in search to 2 maybe 3 years. Some day Yahoo will figure out their own direction, instead of playing follow the leader.

    Greg’s last blog post..FlexFuel = Higher food prices

  • Jordan McCollum

    Yahoo has been doing search for more than three years—they’ve maintained their own web crawlers and index since 2003. Heck, Yahoo’s been blogging about search for over four years. Most importantly, that’s where Yahoo has put its fortunes now.

  • Yeah, Yahoo had search before Google existed. You could search their directory for some time and then, yeah in 2003 they began crawling and index building.

    I think Yahoo getting out of search would be like them saying, you know… we really don’t like money. That is to say, ain’t going to happen. Of course, the ad/banner types you referenced would love search to just go away. That way they could stop trying to stretch their brains around the concepts of paying for performance and stick to thinking only in terms of one time media buys.

    Terry Howard’s last blog post..Walmart FAILS Web 2.0

  • No, I maintain my position. The future for Yahoo is in a merger with MS.

    Nicole Price’s last blog post..The Best Recipe Sites

  • You’ve got “Yahoo’s VP of Web Search Technology—leaving for Yahoo” in the post. 🙂

    Is there a future without search? No.

    Is there a future without Microsoft? There could be, but they’ll succumb to the pressure to sell out.

  • Yahoo + MSN = not happening

  • It might, Yahoo + MSN = Google

  • @Terry Howard

    Brilliant comment, thank you for a bit of levity and light.

    Ted Murphy’s last blog post..SpeakToMe is the Ecommerce Solution for Online Publishers

  • I agree with Priyanka, Yahoo + Msn = Google

    Seotest’s last blog post..Busby SEO Test My Opinion

  • We would really like to think there is. Otherwise we will end up in another monopolistic scenario that is bound to hurt the end consumer. We very much hope Yahoo gets it act together and bounces back to become a worthy opponent to Google and Ms.