Is Yahoo really that Bad…How about Microsoft?!

Danny Sullivan wrote another beautiful post right before the end of 2008 titled “Tough Love for Microsoft Search“.
It’s a long but truly inspiring post. It comes as a part of the trilogy that includes “Yahoo the Failure: Myth versus Reality” and “the Google Hive Mind“.

In his post, Danny covered reasons why Microsoft failed (is failing) regarding Search despite the fact that the company started developing search engine some 11 years ago (in 1998 Nearly a year after announcing it would get into search, Microsoft finally unveiled its own search engine dubbed MSN Search):

  • Search is simply not at the heart of the company leaders. It is a chore and the company does it simply for the money. Well most companies do that but they don’t publish it out right like Microsoft…
  • The odd way of thinking about Search just like software development with different versions/updates.
  • Microsoft doesn’t even have a brand. There is a painfully/funny example that Danny used in his post. It’s regarding Eric Jackson, a dissent Yahoo investor who used to be convinced that Microsoft is the solution for Yahoo Search.

Below is the whole quote from eWeek:

I had never used Microsoft search before a couple of weeks ago. I sat down to try it and then realized I had no idea what to type in. I tried, but the only search bar was to help me search MSFT internal directories. I then remembered seeing some advertisement for ‘Live Search,’ so I tried It was some spam site. Finally, I tried, and the results were no good. I will never use it again. When I want to Google or find Yahoo, I know what to punch in. Simple as that,” Jackson said.

  • Human resources, Long term plan are all what Microsoft is lacking as well.
  • Danny also covers massive opportunities that Microsoft has due to its own brand, various distribution deals with computer makers like HP, Dell.

His posts made me reflect upon my posts on “Microsoft & Yahoo: a North Southeast Asia perspective” and “If I were Yahoo Chief for Search Engine Marketing“.

Looking at the big picture, I have to agree with Danny that most people have been too hard on Yahoo (myself included). The challenge with Yahoo is that “Yahoo sits in a sandwich, with Google the giant top slice of bread crushing it down into the thin Microsoft slice below.” Danny wrote

I totally agree with this point. Yahoo is the number 2 search engine and it’s doing a much better job than Microsoft, just not as good as Google does.
“If you are frustrated with Yahoo Panama, wait until you work with Baidu !” My “slave” Liz often says.

I have been focusing too much on the problems Yahoo has, how difficult it is for Microsoft to rebuild, should it buy Yahoo. However, i didn’t put enough thinking about the problems that Microsoft has on its own.
I guess it’s probably because of the fact that MSN does not have any significant share of the search market in this part of the world in the first place. How sad that is if you were working in MSN search team!

I have not been using MSN Ad Center a lot to give any insightful comments about its platform. Below are some observations i got so far:

  • Ad Center barely exists in Singapore. It’s certainly not available in other SouthEast Asia countries like Malaysia, Indonesia, Thailand, Vietnam or the Philippines.
  • MSN Ad Center does not exist in North Asia countries as well (as far as i know of): Hong Kong, Taiwan, China, Japan, Korea etc…
  • Since MSN has no share in North Asia markets, the issue of handling single byte vs double byte characters becomes irrelevant
  • No offline/desktop ad editor software yet
  • User interface is not as robust as Google. The same goes with Reporting functionality
  • Other Online tools like keyword research, keyword funnel, commercial intent etc.. are simply worthless since advertisers are concerned about volume, efforts putting in versus return. They won’t spend massive amount of time on a search engine which has like 5,000 searches/month on a particular subject.
  • MSN already lost in US market. Its shares in UK or EU countries are simply worse

Yup, it appears that MSN is clearly worse compared to Yahoo for advertisers in SouthEast Asia or North Asia. While Yahoo identified the emerging markets are regions where it can still put up a fight with Google, I don’t think MSN follows the same thinking. More previsely it can’t afford to do so with such little volume (both in volume of searches and revenue).

So what if Microsoft bought Yahoo, would there be any threats to Google in short/mid term in Search Marketing?
IMHO, there is none. In fact, Google needs a stronger competitor than what it has right now (Yahoo), a company that is not too strong, not too large to make the field seems to be more competitive and helps to drive Google further.
Imagine a world without Yahoo, how Advertisers can really appreciate the robustness of Google’s system like the way they do now? How can Google be motivated to constantly coming up with new solutions, integrating more services into its Adwords & Adsense platforms?
And more importantly, how can Google maintain a user friendly perception and not becoming another Microsoft?

So in a weird way, Microsoft buying Yahoo might prove to be a good thing for Google. It will strengthen Microhooo as a second player in the market, without being too threatening. The process of simply integrating Microsoft Search team and Yahoo search team will probably take 6 months or more because of the size of the two companies, Human resource issue, internal policy, work flow etc…It will probably take another 6 months for Microhoo to come up with some thing useful to compete with Google (giving the way Yahoo normally works). And in this 12 month buffer time, Google’ll probably gain so much more share for Microhoo to play catch up.

Well, i am sure that great thinkers at Microsoft considered very carefully and already had their own detailed plan when they decided to bid for Yahoo last year. It would be very interesting to see how things unfold in 2009 regarding this.

That’s about it for now.


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