8/15/2005

Identity Crisis

An article in The Economist, synopsized by Paid Content, suggests that Yahoo isn’t as clear on its strategy as is Google, because Yahoo keeps creating unique content while Google seems focused on scraping, searching and selling content produced by others. My own opinion matters little or not, nor is it particularly well-informed, but in the blogosphere, every bloghard is entitled to share. I wish I could have read the entire Economist piece, but a stern message on my screen said “This is premium content” and I am not a subscriber. Fortunately, Paid Content provided a link to the MIT press release about the event that provided the basis for the magazine’s analysis: “Students from MIT Sloan School of Management and Harvard Business School,” explained Paid Content, “acted out teams from Google, Yahoo, AOL and MSN, and had to discuss various strategies and scenarios. Google came first, Microsoft second, AOL/Time Warner third, and Yahoo fourth.” This scholarly smackdown was grist for the Economist’s mill. I’ll gloss over Microsoft and AOL-Time Warner. Despite their market mass they lack new media momentum, and are more likely to be followers than leaders of whatever is to come. But which of the new media giants should mini media types be following? Paid Content, delivering the thrust of the Economist piece, writes: “Google is a technology firm . . . (while) Yahoo sees itself as a media company.” Paid Content also noted “the conflict of whether Yahoo is a guide (to Web-wide content) or is trying to create a walled-garden experience with its increasing emphasis on original content. In the end, the (Economist) concludes, Yahoo has old media plans for the new-media era.” And here is where my ignorance of the full article may prove my undoing because I wonder why would that be a bad thing? Do we have to throw out the old world, and abandon its forms and wisdoms to build something new? I don’t think that is the spirit of change in the current age. Change is evolutionary: new technologies offer innovative ways to solve old problems or create new possibilities. It should be no surprise, nor shame, that some old ways are preserved. That’s not to say Yahoo hasn’t got problems. For months I have followed Paid Content report on the hiring of a succession of seasoned media and new media execs. Yahoo has been creating a new media Shangri La in Santa Monica (home of Paid Content founder Rafat Ali). Hire a bunch of executives. Put them in proximity to each other and a certain amount of bickering is inevitable. It may even be necessary and useful because we are on new ground, and therefore experimentation and failure are to be expected. But when I checked Yahoo’s financials (on Yahoo finance, my one-stop-shop for such stuff) the stock chart looks good, the profits are huge and the management is bold. I’m thinking here of the AliBaba investment, which may look like a distraction to some but which I see as the continuation of Yahoo’s view – expressed in a Dec. 1, 2004 presentation at Stanford by Yahoo CFO Susan Decker (see page 24 for a picture) – that web companies must be global. None of this diminishes my admiration for Google, a money-making machine with two core competencies – algorithmic powers of search and an awesome selling ability. Advertising accounts for something on the order of two percent of GDP by some estimates (click here and search for "Over the last decade"), and Google has positioned itself relative to advertising dollars as the whale is to plankton. Still as a content creator, I wonder whether even so magnificent an enterprise can continue to hold at arms length that which its users ultimately seek? For now this remains a philosophical question because I can see no reason why Google should not ingest an ever larger share of advertising dollars without lifting so much as a flipper to keep the content coming. Tom Abate MiniMediaGuy ‘Cause if you ain’t Mass Media, you’re Mini Media

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