Yahoo! abandons search – Bing can’t win like this

So today Carol Bartz’ plan to destroy the search brand value of Yahoo! has finally borne its fruit. In her determination to reinvent one of the companies that invented Websearch, Bartz has signed away nearly all of Yahoo!’s search engineering capabilities and signaled Yahoo!’s exit from competitive search.

History teaches us that search brands that give up their own technologies fail and fail quickly. People abandon them in favor of the real innovators that still run their own algorithms. There is basically no hope for Yahoo! to grow its way back to the number 2 search interface. Microsoft’s Bing will now assume that position.

Of course, people have argued that Bing will increase its market share by powering Yahoo!’s search results. The truth of the matter is that by the time Yahoo! is serving Bing search results, hardly anyone will be using Yahoo! search anyway. The Bing bounce won’t happen. Microsoft will still have to grow its market share the old fashioned way: by actually competing.

Microsoft’s Bing is a very good search engine. They did not need to trick Yahoo! into strategically forfeiting its search market share in order to grow their own. Because Carl Icahn shattered people’s faith in Yahoo!’s ability to be what it always has been (a Web search service), Yahoo! has floundered and lost search users.

This kind of disaster could have been prevented if Icahn had not allowed his greed to strip him and his investors of hundreds of millions of dollars by publicly fighting Jerry Yang. Once Icahn turned on Yahoo!’s founder people lost faith in the Yahoo! brand and it began lumbering toward the kind of brand death that keeps Altavista, Excite, Infoseek, Galaxy, Northern Light, Lycos, Hotbot, and other once-famous search brands from entering daily conversation.

Carol Bartz’ complete incompetence in the industry hasn’t just hurt Yahoo! investors. She’s basically thrown in the towel on a significant number of content repositories (that the science fiction fandom community among others have depended upon). Millions of Web sites were recently tossed in the trash by Yahoo!, but she has managed to destroy a lot more content by shutting down other Yahoo! services.

Yahoo! will now seek to reposition itself as a content provider, competing with several hundred news, finance, and entertainment Websites that all have significant brand value in their respective niches. Yahoo!’s brand value was mostly in search and Web portalization.

I wrote more about this topic at length in an SEO Theory article titled Good-bye Yahoo! Search. Consumers will be hurt by the loss of a major search algorithm and advertisers will be hurt by the increased competition for advertising slots in the combined Yahoo!/Bing network.

None of this will in any way affect Microsoft’s ability (or inability) to actually compete with Google. Whatever gains Microsoft achieves in that arena it would have accomplished anyway without the Yahoo! deal. In fact, in 10 years when the deal is over, Microsoft will be free to walk away from a vague shadow of Yahoo!’s once dominant search brand having eliminated a major competitor without actually competing.

That kind of business coup just doesn’t happen every year, so appreciate the beauty of the strategic outmaneuvering in Steve Ballmer’s approach to capturing market share. By appearing to partner with Yahoo!, Ballmer only managed to destroy Yahoo!’s brand value.

Science fiction fan sites should start looking for ways to build their search visibility in Bing and Ask, which now slides into 3rd place as a major search algorithm. Ask has done a terrible job of marketing itself to the general public, even though it actually has the best search technology around.

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