Linked by David Adams on Fri 4th Dec 2009 17:16 UTC
In the News This 24/7 Wall Street article displays three common media ailments: hyperbole, a love for top ten lists, and an obsession with December predictions for the coming year (which off course OSNews is obviously also falling victim to), and there are some predictable losers on this list (Blockbuster Video, anyone?). I thought it would be an interesting topic for OSNews because three of the companies/brands are quite familiar to us: Palm, Motorola, and Sun Microsystems.
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What I see happening...
by JonathanBThompson on Fri 4th Dec 2009 19:10 UTC
JonathanBThompson
Member since:
2006-05-26

Maybe not in 2010, maybe not for a few years, but, if things don't work out well between Microsoft and Yahoo! I think there will be far more layoffs at Yahoo! as Google eats their lunch.

Even if the Microsoft-Yahoo! deal works out in terms of the legal hurdles, the whole deal removes a lot of what made Yahoo! the company they were: search. While they have lots of great content, is that enough by itself to remain truly profitable long-term, keeping in mind that they're ad-driven for revenue? Is Yahoo! turning into a pure content company? At this time, things are still up in the air: it's not clear what Yahoo!'s focus is, and that's the biggest problem for survival. The problem with Yahoo! and their product is that customers aren't locked in by needing to run their product to run other products: Microsoft may not be doing as well as they'd think they should, but it's really hard to fight the inertia of having 90% OS market share for consumer-level computers, when you consider the very large application market for apps that require Windows, that aren't that easily moved over to other platforms, because that's a costly proposition, especially when you compare potential market for other OSes. Cost of moving from Microsoft Windows to another OS: relearn various applications and their equivalents (if they exist) on the other platforms, as well as acquiring them: while some are free, there are likely far more proprietary applications that aren't on the open general market that are used and valued, and then there's the inertia of learning anything new. While for switching from one search engine/site to another, it all comes down to clicking different links, or typing them in the address bar: unless you're a social networking fool and connected via specific services to lots of your friends, it doesn't have an awful lot of stickiness to it!

There's an important lesson here: regardless of how good technology a company puts out, regardless of how great the company is, if people choose something else because they've got it on their mind, it's still failure for all practical intents and purposes. History has shown that it's not always the superior solution that sells: it's just what people adopt, good, bad or ugly, and where things are easily switched from, sooner or later, they are, en masse by the public, on a whim. Ask yourself: if a particular web-based company disappeared off the web, how much would it disrupt your life in work and home use? Even Microsoft, for all their money they can throw at problems, can't make you use their web-based stuff and be profitable at it, regardless of their claims (provable or not) of having superior web search/analytics technology: quite simply, Google has out-marketed Yahoo! and Microsoft, and by leveraging network effects for economies of scale and value of data, they've got the lion's share of network traffic for search, which only gets more valuable at a non-linear rate based on number of users. However, Google may collapse under their own weight of data: how many times have you tried to find something, only to get so many results from Google that you'd need to be immortal to get through them to separate the wheat from the chaff? Perhaps there's a natural maximum size for them they can grow to before they reach a point of diminishing/stable returns, but Microsoft, Yahoo! and any others need to have that happen soon to remain profitable (Yahoo! in general over the years has been profitable online, just not as wildly profitable as Google: Microsoft has, in general, only lost money online) or even relevant. The other big factor that may stop Google from becoming the Web Borg indefinitely: people's distrust of any single entity having too much power over their data and privacy. This may be the salt to the sugar fuel to the bread dough-like growth of Google, that causes things to stop growing at a certain point...

Reply Score: 4

RE: What I see happening...
by FealDorf on Fri 4th Dec 2009 20:28 in reply to "What I see happening..."
FealDorf Member since:
2008-01-07

[disclaimer: i'm a yahoo user, so there may be bias]

Even if the Microsoft-Yahoo! deal works out in terms of the legal hurdles, the whole deal removes a lot of what made Yahoo! the company they were: search.

I don't think so.. Yahoo! was rather something else; it was a web portal and Yahoo's the last surviving one of them. Considering how statistics suggest Bing and Google have eaten up Yahoo's share in search market; I'm not surprised they're being eaten up.
That said, Yahoo's noticeably shifting its focus and I can see their ads all over the place*. Maybe Yahoo has new incentive. Personally; I'm content with YahooI stick to Yahoo because of Mail, Messenger, Delicious and Flickr.
On the other hand, it'll definitely be interesting to see how Google will go. Who knows, maybe it'll become the IBM; dominant for years until a change will take place in the market that Goo would fail to notice. I just hope it doesn't become Intel - a *persistent* monopoly..

EDIT: * when I say ads, I don't mean web ads. I mean billboard ads in my country, India

Edited 2009-12-04 20:29 UTC

Reply Parent Score: 1

RE[2]: What I see happening...
by Moochman on Fri 4th Dec 2009 20:57 in reply to "RE: What I see happening..."
Moochman Member since:
2005-07-06

Yes, I agree that although search is how Yahoo got its start, it hasn't been its reason for existence in more than a decade.

Yahoo's main function is and has been for a long time as a portal--a kind of replacement for ex-AOL users who just upgraded to "the raw internet" (which it was long before AOL itself turned into a web-based portal). It has long been one of the most "trusted" brands by average people for webmail, news, stocks, etc. Google on the other hand, started out with just search, and added all of the stuff Yahoo already had (mail, groups, news, etc) in a gradual manner. Which is why there are still plenty of people who go to Yahoo instead of Google, because they still see Google as primarily "just a search" site.

Yahoo also has lots of cool but severely under-marketed technology up its sleeve--it has a really nice AJAX web applications platform with Zimbra, and it's got an awesome content mashup tool in Yahoo! pipes. Yahoo's main problem as I see it is an unwillingness to experiment with any kind of branding that is not "Yahoo!" When it bought Konfabulator, it totally messed with its guts and renamed it Yahoo Widgets--a recipe for fail. Ditto for Zimbra--it's now branded the Yahoo Zimbra Desktop. Just about the only thing it didn't try to impose its brand on was Flickr (and thank god it didn't).

If you compare Yahoo's approach to AOL's, AOL (believe it or not) does a much better job of building brand recognition by allowing each of its brands to flourish under its own banner, without being obviously tainted by the AOL name. Engadget, MapQuest, Moviefone, TMZ, ICQ--How many people even realize that these are AOL properties? And yet AOL still gets the advertising bucks. Yahoo could learn something. Or (my favorite pet imaginary deal) Yahoo could just buy AOL outright and acquire a large stable of great content websites at a (most likely) bargain price.

My only big pet peeve of Yahoo is that they're now the *only* major webmail provider that charges extra for POP access. What year are we living in???

Reply Parent Score: 3

Bill Shooter of Bul Member since:
2006-07-14

I don't even remember Yahoo getting its start from pure search capabilities. I remember that it excelled at its categorizations of the search results. Yahoo has had several search providers in the past, so having microsoft do it is really nothing new. Some past providers:

Altavista (starting in 1996)
Inkotomi
Google ( until 2004m then it created its own search engine)

So switching to Bing? Not that big of a deal.

Reply Parent Score: 2