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Friday, March 28, 2008

How Yahoo Could Avoid Microsoft - Part 1

The following went out to the Traffick Occasional newsletter list a few days ago. Here's the reprint.

--

Hi all,

As usual, it's been awhile.

So our industry is at something of a crossroads again. This watershed moment is the will-they or won't-they merge Yahoo into Microsoft to form a giant online powerhouse.

My main take has been that consolidation in the paid search platforms currently operated by Microsoft and Yahoo would make life easier for us marketers day-to-day. Consolidation of the search audiences would also provide the combined company with more data and make it more competitive.

http://traffick.c.topica.com/maakEKlabFWUMauv0PjbaeQx03/

http://traffick.c.topica.com/maakEKlabFWUNauv0PjbaeQx03/

But search ad platforms are part of a much bigger story - even if we confine the story only to search.

More recently, I posted a promise to map out an interesting scenario for how Yahoo could find its feet in such a way that would satisfy shareholders that they should do a different deal, and not the Microsoft one.

Here goes. These are kind of geek-mode, wacky ideas, so I thought I'd bounce them off loyal Traffick readers for comments. If you have any, please comment.

Part 1 of this exploration comes in the form of a letter I wrote to my colleagues at the consumer review site I co-founded, HomeStars.com. (To see what we're up to these days, check out http://traffick.c.topica.com/maakEKlabFWUrauv0PjbaeQx03/ -- I'm giving you the Toronto home page so you can see what an individual city home page looks like -- but it's now available in your city too!)

I had just excitedly taken in an SES New York keynote by Andrew Tomkins, Chief Scientist at Yahoo Search. I believe Andrew is saying things that say a lot about the future of Yahoo. And it would be a shame if some of this great work were interrupted by an old-school Microsoft takeover-and-purge operation.

Here, slightly edited, was my excitable note to HomeStars colleagues:

"Hi all,

Big news!

Well, I think so, anyway -- as it relates to our little world of UGC [user-generated content] which is of course actually the biggest world there is in terms of online content.

I just took in a keynote from one of Yahoo's chief scientists, Andrew Tomkins. He talked a lot about how the current "face" of search engines is quite static given how much the engines have invested and how much growth in content we've seen in the past 5 yrs. This is unlikely to remain static in the years to come.

The overall topic of the talk was really to drill down further on Yahoo's recent embrace of open formats / microformats. To take an example, they have worked with beta partners such as Yelp to embed new tags (like hreview, and various other elements of their category and visual structure, such as the star system) and to "interoperate"... the visual result on a search result is a structured type of result on a Yahoo search for a restaurant review that is totally favorable to Yelp because Yelp is communicating all of its pertinent info to Yahoo in a format that Yelp wants (to quote Tomkins directly, ***"we're structuring it that way because we're working directly with Yelp, and that's the way Yelp thought it should look"***), using a contemporary abstract vocabulary. It looks like a little Yelp microsite coming up as one of the top search results, in other words. In even more evocative words, Yahoo is essentially accepting a form of custom Yelp widget, because this is better for users than an uncommunicative one-way display method based on outdated or no standards. That goes beyond Google's "guessing method" that it uses to sometimes put a few important internal links from a given site in front of a search
user. (Google, we love that you try, but you have to admit, open formats are intriguing. And we don't love it when you remain overly proprietary, and that goes for most other tech companies we want to admire, of course.)

Other Yahoo partners in the early going of beta testing the display of OPEN FORMAT structured content include epicurious and babyzone (or babycenter or babysomething).

This may sound dryly academic but it is a major development in search, IMHO. I would like to talk more about the implications when we have time. Yahoo's market share is of course lower, but this commitment to openness as opposed to proprietary standards is potentially going to make Google's methods of spidering reviews and other UGC look awkwardly proprietary. And, if we can get traction with the engine that has 11% market share it is still better than a kick in the teeth.

The other bullet point here is: I got to ask the only question after the keynote! They really should make a rule that usual suspects like Goodman are barred from the mike :) ...

Anyway, I asked:

(1) In terms of recurring elements of UGC page structures, like the "star format" - (Yahoo is displaying red stars for Yelp on their 5-star system), I asked if there might come to be some standardization - would there be an attempt to normalize these or would a site that had "a big banana with a number in the middle" be able to convey that methodology to Yahoo and so forth;

(2) What did he think of the ecosystem in terms of what happens if Epicurious or Yelp potentially being acquired by Yahoo - does it now become a situation where other players no longer have as good a chance of coming up in search results around let's say restaurant reviews...

His answers were:

(1) For some time to come he would expect many niche industries and sites and user bases to have their own numbering and visual systems, so there would be no standardization forced on them, i.e. the display box might even show a yellow banana with a number in it;

(2) He said the right things about the need for outside content to be valued highly and that a preference for showing users the best third-party results should be "hard-baked" into the design of search.

Now the purpose of the good scientist's talk was certainly not to explain to folks how they can jump the queue and sign what amounts to a "metadata partnership" with Yahoo.... but that does lead to a whole new discussion of how Yahoo - if the scientists have their way - may be able to replace its non-transparent paid inclusion program with a much richer, "unpaid inclusion" cooperative effort with quality publishers.

** This potential to participate in microformat communications with a search engine confers no promised ranking benefit** , but obviously I'd expect good things from being on a SE's radar in this way. This is a big departure from the Yahoo of years ago standing up and announcing the format of its paid inclusion program, as if this would solve all the problems of publishers.

The new direction in organic search is, on one hand, open, free, and informational; on the other, you have to think that if they are identifying "ideal types" like Yelp, there will be an indirect bias towards a smaller universe of known players. It's a new opportunity to get on the ground floor of a genuine and sincere effort to serve users, as opposed to trying to play catchup on a 10-year-old, broken, PageRank system that has allowed all sorts of perverse incentives (the ones that are causing us to bend over backwards trying to get links rather than letting them develop naturally).

For developers, Yahoo are creating a development kit so that abstract formats can be built easily. This sounds promising.

The reality of the massive growth in web content (most of it user-gen) is - something must change so that search engines work better with formatted, quality content, rather than their own proprietary, generic, semi-intuiting way of trying to sort out what's what. Google long ago broke with the majority of "troglodyte metadata" conventions, but nothing really solid has risen to take its place (Google Base is a failure). I see the new adoption of contemporary open formats by Yahoo as a big step in an evolution towards a more usable web, much more so than, say, the SiteMaps protocol.

Fun fact: we are, in orders of magnitude, not far off as a planet from creating nearly as much content daily as we would if, given current cognition abilities and typing speeds, we sat down and typed every waking hour. The amount of UGC, then, is ridiculously high today, to the point where something fundamental has shifted already, and so fundamental that we can already point to and imagine the upper limit, and that hypothetical upper limit looks not much different from what is currently happening (much of this content is private of course - look at your email and Skype chat logs). [Thanks to Dr. Tomkins for these insights.]

The need for a "communicative" approach in relation to publishers, as Tomkins sees it, is contrasted with the "overly high hopes" search idealists have in things like personalization. Personalization methods work a tiny percentage of the time, but generally give worse results 98% of the time. User personalization is pie in the sky compared with the potential of improved ecosystem communication with publishers.

Thanks again, Dr. Tomkins.


Best,

Andrew

--

To sum up: some of what they're working on is game-changing. It changes the face of "organic search" and so-called SEO. Yahoo has a vision. It's a compelling one, in my opinion.

But that isn't the end of the story. It will help to flesh out the vision a little further. I'll explain how startups like Mahalo are on the right track, but ultimately, utterly wrong. I'll talk about how Yahoo has it right, if they move forward in a certain direction. And I'll discuss their target audience and the potential that yes, they could still come back to be a credible alternative to Google in many markets. They could do it with a friendly version of a Microsoft takeover. But they could do it with another partner too.

Part 2 to your inbox in a day or two. Stay tuned.

Really over and out this time,

Andrew Goodman
Editor-at-Large, Traffick.com
www.traffick.com

Founder & Principal, Page Zero Media
www.pagezero.com

Posted by Andrew Goodman




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