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Re: Yahoo Gives Up, Turns Search Over to Bing
Yahoo Gives Up, Turns Search Over to Bing
* By Ryan Singel Email Author
* July 29, 2009 |
News analysis: In its search for a second act, Yahoo has decided it is no longer a technology company.
A search and advertising deal announced Wednesday means Yahoo’s once-dominant search engine will grind to a halt for 10 years, replaced by Microsoft’s often-revamped and newly branded Bing. Yahoo gets a big slice of text ad revenue, and Microsoft buys itself into a (distant) second place in the search race, still with less than half the searches as Google.
The only real change for Yahoo’s millions of users is they’ll likely see some Bing branding and search results that might feel slightly different.
For Yahoo employees and stockholders, the announcement says something else: Yahoo is now an entertainment portal, a confederation of “destinations.” It is the new AOL, minus original content.
Forget that Yahoo was one of the first significant internet brands to come out of Silicon Valley. That it has been a leader in cool web technologies, from Hadoop to Flickr to its open search interface and its support for new web standards. That it recognized and bought smart tech companies like Flickr, Zimbra and Delicious.
By letting Microsoft take over its search engine, Yahoo has essentially announced it can’t keep up with Google and Microsoft and instead will focus on amusing users with multimedia deals and Fantasy Football leagues.
Microsoft, for its part, gets a huge bump in traffic to its revamped search engine and online text ad platform. Bing, which currently handles about 8 to 10 percent of U.S. searches, will jump to something in the neighborhood of 30 percent. And by capturing one opposing army, they dramatically simplify the battle lines and create a two-sided conflict.
Google remains the dominant force: It controls 70 percent of the search market and is a cash cow. It collected more than $5.5 billion in revenue in the last three months alone — 30 percent more than Yahoo grossed all last year — the majority from text ads laid next to search results.
By contrast, Microsoft has consistently lost millions refining and trying to monetize its search, and its efforts to catch up with Google in online advertising dollars have stagnated despite billion-dollar acquisitions. With the Yahoo deal, Microsoft is clearly hoping to steal some of the billions that Google makes — using the contractual access to Yahoo search technology (which it gets exclusively under the deal) and more importantly, from the sheer volume of traffic that flows through Yahoo every day.
The stock market punished Yahoo for the deal Wednesday, sending its stock down by nearly 12 percent as the closing bell approached. That’s a bit surprising though because in the short run, Yahoo will be able to save expenses on massive server farms and make more money in search revenues. Yahoo estimates this will add $275 million to its bottom line every year.
But perhaps, for once, Wall Street is looking long-term. Yahoo, a company with a tremendous brand, millions upon millions of loyal users and hundreds of talented — but stifled — engineers, has decided to become just a middleman between a gullible and undemanding audience and eager advertisers. It will offer Flash movies to the rubes and collect bushels full of dollars from the advertisers it funnels its customers to. There might be a future in that business model, however badly it failed for AOL and Yahoo in the last few years, but either way, it’s not a glorious one.
The deal won’t be finished until federal regulators in the States and the E.U. look over the deal, but they are unlikely to stomp on it, given Google’s monstrous market share. That means Bing will be the new Yahoo search early next year.
http://www.wired.com/epicenter/2009/07/yahoo-gives-up/
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Wow, I remember when the internet was just Yahoo and AOL. Now look at them both.
Re: Yahoo Gives Up, Turns Search Over to Bing
Yahoo hasn't been relevant in years. Hell, my main email account is on yahoo, yet I rarely even check it. Only log in to their messenger service because I have family and a few friends on there.
I started to sour on yahoo in the late 90s when all they cared about was making money. They previously had the greatest personals site ever. Years later and I still haven't seen a site come close to it. Site was up to its neck in pussy. If you weren't having sex in the mid/late 90s, you have no one to blame but yourself. Even if you hate the club scene, a date was simply a click away. Then out of the blue, they destroyed that and turned it into a pay site. Everybody left.
Like the rest of the world, I use google for my search engine needs, so this doesn't really effect my surfing habits.
Re: Yahoo Gives Up, Turns Search Over to Bing
Wow, I remember when the internet was just Yahoo and AOL. Now look at them both.
Yeah, I think internet companies in general will be like this. Just come & go like a roll of toilet paper. Aside from Microsoft & Google. AOL done. Alta Vista done. Match.com done. Yahoo, going. Myspace, toilet. Facebook I predict will go out in 2010 so I'm not very interested in it. Something else will be coming along in about a year.
James I do remember Yahoo personals. I remember they even had a TV commercial for their Yahoo personals in about 2000 or 01. I guess that was to boost traffic right before they'd switch over to being a pay site, which always fails.
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