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Yahoo vs. Google
There was an interesting column in the New York Times last week. The article outlines the different design approaches taken by Google (GOOG) and Yahoo (YHOO). It also provided quantitative values that reinforced a suspicion of mine.
Google holds a commanding lead in search queries with 45% share, compared with 30% for Yahoo! and 15% for MSN. They do a fantastic job of monetizing this share, much better than Yahoo or MSN. But the reality is – outside of search and advertising based search, Google just doesn’t matter much.
Google is fantastic at producing products that elicit the praise of the tech press and blog-jihadists, but it appears to me that their solution to everything is Search, and that a white box that you type text into is the only thing that should seperate a user from content.
I strongly believe in the concept of the disintermediation of media – i.e. eliminating the middleman between the content producer and the consumer. But I think Google takes too minimalist an approach to appeal to the mainstream.
Unix is a fantastic operating system for the same reasons, but what percentage of the population knows how to use vi?
Yahoo is more of an aggregator, with a less minimalist approach than Google. It is far more application and service oriented. This approach works better for applications like Finance, News, Maps, and Media. I like the fact I can get movie reviews next to the showtimes. Yahoo has always struck me as being more sticky, and more mainstream. Yahoo is what most people I know use.
Most people will love the concept of disintermediation as it extends to more and more content, but they won’t like the cold sterile approach Google uses. As the middleman is cut out of media, Google will need to adjust their approach as people seek applications and services more like their previous couch potato experience.
There is tremendous value in the aggregation Yahoo provides today. They need to figure out how to monetize that better.
You are overestimating the potential and value of disintermediated content. Content has to be brokered — selection, editing and re-selling is the difference between content, good content and great content. Publishing is about defining a menu and reliably satisfying expectations; like a restaurant we must keep the food hot. This is quite different from proprietary “publishing” — Wall Street research, think tank narratives, nonprofit political research — where “intermediation” never much existed. You’re confusing private publishing — never sustained by paying audiences — with genuine publishing.
Disintermediation was a term widely used on Wall Street in the 80s — it referred to an alleged new relationship between providers and consumers of capital. The term was code for the death of commercial banking, and perhaps even traditional securities underwriting. Notwithstanding the growth of private equity in the last decade, Wall Street continues to mediate capital; the major brokers of content — TWX, Viacom, GCI, DJ — will be no less dominant 15 years from now.
BTW, Google’s lead is much, much higher than 15 percentage points, particularly among the affluent. Check Nielsen. And Yahoo is a content mess.