Yahoo CEO Carl Bartz called her company an ?internet kingmaker? during her second quarter earnings call. Two weeks and a search pact later, Yahoo is doing exactly that?help software major Microsoft take on the search king Google.
As Yahoo aligns with Microsoft and promises to revamp the search landscape, it could reboot itself and shift away from technology. The much-talked about deal transforms Yahoo into a content company, focused on selling ads and attracting people to its websites. Just like any media company, Yahoo will be focused on producing more appealing content and services like the social media features of the newly revamped homepage.
The obvious question is, if Yahoo will lose its geek touch after outsourcing its search services. Even though major details of the search pact are out, there is little clarity on the merged roadmap for high-profile search technology platforms of Yahoo. The company had recently opened up its search platform for smaller developers to develop their own applications in a bid to challenge Google?s dominance in the search market.
Researchers and developer network partners are now scrambling to know if there is a future for Yahoo?s technologies when Microsoft Bing becomes the search engine for Yahoo?s sites and Yahoo becomes the primary sales partner for Bing. While the deal that comes after a series of rumours, negotiations, announcements and reversals, is subject to regulatory approvals and will not come into effect immediately, the direction is clear.
As Microsoft and Yahoo start working on integration, several question marks hang on the fate of the search technologies currently in Yahoo?s labs. Yahoo has clearly given up on the idea of taking on Google directly, but its researchers had a big focus on search innovation and the idea of producing a smarter search experience. Yahoo?s global research head, Prabhakar Raghavan had promised to ?move internet search in a new direction? during an interview with eFE last year. He seemed to have great hopes from the BOSS (build your own search engine), a platform to let third parties create their own search engines leveraging
Yahoo?s research infrastucture. ?Our prediction models suggest that Google could lose a big chunk of its market share, as BOSS partners and players come in,? he said.
Today, Yahoo bosses are reluctant to comment on the fate of these much-talked about technology platforms. Yahoo?s developer network head, Chris Yeh assures full commitment to development of its non-search technologies like YUI, YQL and Pipes, but is not confident of the future of search technologies. ?For SearchMonkey and BOSS, we currently do not have anything concrete to tell you. Clearly, we?ll need to work with Microsoft to determine what makes the most sense for you and for us,? he says in a blogpost. Yahoo lab insiders say that the team is still absorbing the implications and awaiting clarity.
Yahoo researchers and developers seem equally worried about the uncertainty on the future of these high-profile technology platforms like BOSS and SearchMonkey.
To be fair to Bartz, she had made her intentions clear about two months back, when she had declared that Yahoo is not a search company. Yahoo techies, however, were hard at work, trying to make search technologies more productive even as the deal was in works. Only last week, Yahoo launched a beta version of its search gallery, featuring plug-ins from LinkedIn, Yelp, Epicurious, Last.fm and IMDB. These use Yahoo?s SearchMonkey to spruce up the web search results.
Clearly, a new era will begin at Yahoo when it starts using Microsoft?s search engine Bing and its AdCentre advertising platform. Yahoo?s sales team will be incharge of both companies? search advertisers and Microsoft will pay Yahoo traffic acquisition costs (payment made to acquire traffic on its website) at an initial rate of 88% of search revenue generated by owned and operated sites.
The new business model is prompting analysts to draw parallels between the current Microsoft-Yahoo partnership and Google?s deal with AOL. AOL seems to have suffered because of its heavy dependence on Google for the technology that gets it a big chunk of its revenue. About four years back, Google bought 5% stake in Time Warner division AOL for about $1 billion. Even though they did not talk about it, the idea was obviously to keep Microsoft and Yahoo away from online pioneer, AOL and its traffic. AOL was dependent on Google for its search results and advertising. After struggling to attract and retain marketers, it is moving back to Time Warner fold with a lower valuation. As Yahoo decides the fate of the search technology platforms in its labs, an even bigger question facing the internet major is how to ensure that it does not go the AOL way.