Marketing Pilgrim's "Search Marketing" Channel

Sponsor Marketing Pilgrim's Search Marketing Channel today! Get in front of some of the most influential readers in the Internet and social media marketing industry. Contact us today!

Yahoo Becomes the Costco of Search Engines




I was all set to post a simple announcement that Yahoo had officially flicked the switch and changed its search results to Bing’s.

I had no plans to give Yahoo a hard time. Give it a break, I told myself. Let it prove to the world that it’s not bailing on search.

Then I read Shashi Seth’s rebuttal to…well, no one in particular.

I’ve heard some innuendo that with Yahoo! Search transitioning certain back-end functions to Microsoft, we are no longer a “search engine.” …most industry players initially build their entire technology stack in-house. As these companies become more successful, and as technology matures, many building blocks of these products are outsourced – even some of the most critical components.

Take a look at Boeing or Airbus aircrafts. They outsource their engines to Rolls Royce, United Technologies, and GE.  But, does that mean that Boeing and Airbus are no longer airline manufacturers?

OK, let’s put aside the fact that Seth appears to be just a little to thin-skinned here. Let’s look at his analogy.

Effectively, Yahoo has become the Costco of search engines. To be more precise, the Kirkland Signature brand of search engines.

Not familiar with Kirkland Signature? Then you’ve clearly never shopped at a Costco. Kirkland Signature is Costco’s “store brand”–where the actual product is made by some other company; with Costco simply slapping its own label on the item in question. Shop at Walmart? Equate is Walmart’s store brand.

OK, still with me?

So what do you feel when you pick up a store brand product? Are you buying for the brand? The quality? The promise? Nope, you’re buying it because it’s a heck of a lot cheaper than the brand name. It doesn’t excite you. You don’t “fan” it on Facebook. You don’t wear a t-shirt with its logo. Nope. It simply gets the job done. Nothing more, nothing less.

While I may have brutally twisted the comparison Seth was trying to make, I think it’s a fair observation. Yahoo has become the store brand of search. Content to outsource the actual product to Bing. Content to fill in the gaps of search demand. Content to be the Costco of Search.

Do you agree? Disagree? Let me know.

  • http://www.nicolekrug.com Nicole Krug

    It’s an interesting analogy, an somewhat strange since Microsoft wanted the search technology Yahoo had to offer, and now they’re not going to utilize it? I have noticed the search results on Yahoo & Bing are starting to fall in line a bit more when I’m checking rankings for the sites I work with. They aren’t exactly yet, but they’re coming closer and closer, so you wonder how long before Yahoo search just redirects to Bing.

  • http://www.frankthinking.com Frank Reed

    LOL! It was funny that you used content over and over at the end of the post because what Yahoo REALLY is is the other meaning and pronunciation of that word; they are a content company. They outsourced their search then bought Associated Content for its ability to churn out mind numbing ‘content’ designed for – you guessed it – the search engines!

    Yahoo is lost. They had boatloads of potential ( ;-) ) but they have lost their way.

  • http://www.toddmintz.com Todd Mintz

    I have a great affinity for all things Costco so I think you are being far too lenient on Yahoo…I would think the better analogy is “flea market”.

  • http://WebPieRat.com Jill Kocher

    Shashi Seth implied that there’s still some Yahoo in the mix with search — that they’re pulling in other data sources besides Bing’s results to make their results unique.

    “Yahoo! Search supplements Microsoft’s web Index with Yahoo!’s own content, content from third party relationships, and content from social networks like Twitter.”

    So that would make Yahoo more like a Slushee bought at Walmart’s food court: A couple of syrupy ingredients blended together in neon colors.

    As a good Stanford alum of the ’90’s, I always rooted for Yahoo. I’m sorry to see them limp out of the game like this.

    • SBR

      “As a good Stanford alum of the ’90′s, I always rooted for Yahoo. I’m sorry to see them limp out of the game like this.”

      Yeah, I’m sure you were using Yahoo Search all the time instead of google search to support yahoo….haha

      So many people say that they’re sorry to see yahoo search go, but they never used yahoo search anyway. If people wanted to see Yahoo search do better, then they should have used yahoo search more! It would have made yahoo’s algo and relevance better due to a larger search share. It’s why yahoo and microsoft developed the alliance….a larger search share drives more relevant searches.

      Many people use the yahoo homepage, mail, news, sports, finance, etc (all that good content which makes yahoo #1 in terms of traffic in many categories) but when it came to search, they used Google. It’s not a crime, it’s just reality. People like Yahoo’s content and Google’s search engine.

      This only proves the point though that it was worth it for yahoo to get out of the search algo game and let microsoft drive the backend because MSFT was going to spend hundreds of millions of dollars anyway trying to catch Yahoo first and then Google.

      So why not put a focus on content (which yahoo is very good at) and continue to drive additional revenue through search, display, and mobile ad sales?

      Everybody wants to talk about the “should have”, “could have” and the “would have” of yahoo, but that’s in the past. Get over it! You still have a choice of using yahoo google or bing to run your searches. They are so similar these days anyway, that it really doesn’t matter. It mattered in the past, which is why Google took off, but there really isn’t a difference in the search results now. The only reason why Google makes so much money now is because they have that large search share. If you want to start changing that dominance, then start using yahoo or bing. If not, then keep using google.

      But don’t say that yahoo was a “has been” when everybody could start seaching on yahoo again and change the whole picture around.

      Same with facebook. If you don’t want to see facebook get huge, then don’t use it!

      • http://www.marketingpilgrim.com Andy Beal

        Some interesting points. But I wouldn’t use a sinking ship and just hope that they patch the leaks now that more people are onboard. ;-)

        Yahoo needed to make a better search engine, then people would have switched. They didn’t. So they lost the war to Google.

  • Tod

    The Costco analogy is not giving Kirkland Signature enough credit and giving Yahoo too much credit. My experience is that Kirkland Signature gives you a custom built premium quality product without paying a ton of money for the “name”, not simply a “get it done cheap” product. Conversely, Yahoo has always been “name brand hype” marketing machine with no unique search quality. Store brand would be fair – Kirkland Signature… they wish.

    • http://halloweencostumesonline.org Halloween Costumes Online

      It would be very sad indeed if Yahoo just became the generic label for Bing. There is lots of wonderful technology behind the search engine and hopefully Microsoft is sharp enough to see the potential, build an even better search product, and then utilize the popularity of the Yahoo brand. This is their time to gain a foothold in the search engine market. Hopefully, they won’t waste the opportunity.

  • http://www.websight.net.au Santa SEO

    You never fail to crack me up Andy….poor Yahoo..I can recall the days when folk would readily give up their left testicle to score a listing in their human-edited directory. The recent exits of key people demonstrate that innovation is out the door and greener/more creative paths live elsewhere. Aloha

  • http://tessarexroat.com Tessa

    I saw the title of this post and nearly spit my coffee all over my keyboard I was laughing so hard, but after reading this your metaphor makes complete sense. Do you think Yahoo will start offering bulk discounts if you buy 100 gallons of ads at once?

  • http://www.internet-marketing-muscle.com Bill Davis

    Comparing Yahoo to Kmart would have been more appropriate: Declining market share, fading customer base, more trendy upstart competition…

    Kirkland is a private label. Yahoo is not. But the point is well taken. They’ve lost search and aren’t even trying to win anymore.

    However, I’m not sure Yahoo has been trying to win in search for quite some time now.

  • http://www.zinsrechner-info.de Mike

    as long as the costco-burgers stay the same i don`t care ;-)