Yahoo! killed off their brand universe project, and recently fired 30 people. Rumor has it that about 2,000 more layoffs might be coming soon. Yahoo! shares are nearing $20, trading at $20.78, and giving them a market capitalization of $27.8 billion.
This WSJ article highlights that about half of Yahoo!'s value is in cash and equity stakes in Alibaba and Yahoo! Japan. Over the last year Yahoo! lost significant momentum and marketshare in search. They need to outsource search and search ads, fire a bunch of employees, gain search marketshare, or there is going to be a buyout or merger before the year is out.
Pageviews Still do Not Have Much Value
Sidebar: to anyone hyping the value of pageviews and social media, think of how many pageviews Yahoo! has. If you pull out the value of Yahoo!'s large equity stakes in other companies and cash on hand, Amazon and eBay are each worth about 2 to 3 times Yahoo!, and Google is worth about 13x.
10 Key Ideas Yahoo! Needs to Implement Tomorrow (or Sooner)
After seeing the underwhelming launch of Wikia Search, I think Yahoo! should push further in human aided search. Relevancy is based on perception and marketing. Yahoo! needs to do the following if they want to compete in search:
Increase the relevancy of their directory by actually featuring it (the directory looks like a sidebar to a blog that occupies most of dir.yahoo.com), and by becoming more selective with what sites they accept. You can appreciate their bad marketing of the Yahoo! Directory by the fact that the Google Directory (a DMOZ clone) has a higher PageRank.
Yahoo! is testing integrating Del.icio.us data in their search results. Brand Yahoo! search as human edited safe search and find a way to pay end users for their contribution. Payment does not need to be monetary. Take a look at the success of Yahoo! Answers and Del.icio.us and apply those toward search. Google gives Checkout advertisers free ads and a higher ad CTR (which leads to a lower ad cost). Win search marketshare from your users by giving them rebates on your other products as well.
Create a branding and awareness campaign around the new Yahoo! Search. Hire someone to do a fake study proving that Yahoo! Search is more relavant than any of the other players. Make sure Ask or Microsoft is ranked #2 ahead of Google.
Let users comment on search results AND on listings in search results. Controversy surrounding this will lead to more people talking about and evaluating Yahoo! Search for quality.
Launch a new toolbar with a meter like PageRank in it...call it YourRank (or something the emphasizes to the user) that it is their web and what they like. Heavily push that branding message to users locked into Yahoo! email, Yahoo! Stores, and other verticals they interact with.
Create a well branded specialty search for bloggers with innovative features that make it easy to follow the conversation both ways. Also launch creative ideas to buy mindshare with other high authority communities (universities, open source projects, etc.).
Easily allow advertisers to do keyword research on Yahoo! outside of while they are setting up search campaigns. Create a reliable publicly accessible keyword tool which actually markets the Yahoo! Search product.
Give away a lot of useful search market data (like Microsoft recently did with their Ad Intelligence plug-in).
Put the Yahoo! brand on the millions of syndicated domain landing pages they power each day.
Increase the relevancy of their contextual ad product and increase payouts to 100% (buy marketshare) BEFORE Microsoft openly launches their network. Perform case studies with publishers who saw their Yahoo! monetization go up AFTER switching from AdSense (and other inferior networks) to the NEW Yahoo! Publisher Network contextual ads program. Perhaps pay key leading bloggers 150% just to get them using, talking about, and giving feedback on your ads. Buy marketshare...
How Could Yahoo! Become Relevant?
Do you still use Yahoo! Search? What could Yahoo! do to make you want to use them and talk about their search product?
Invest in Wikia search and share technology with them to attack Google from multiple fronts. Google engineers have openly admitted to frequently hand editing the search results. Now that search is back to being about people tell the USER that it is their web and THEY own it.
What if you assumed you already lost the search battle and decided to counter Google by being open about search, and being actively involved with the webmaster community? What is the worse that can happen? People start talking about you, trying your product, giving you feedback to improve your product, talk about you, and you gain marketshare. Oh no!
Previously, you were charged the same for traffic from all web sites within our distribution network. Now, with quality-based pricing, you may be charged less for certain clicks than you otherwise would pay, depending on the overall quality of the traffic provided by our distribution partners. As a result, your click charges can decrease.
As Yahoo! cleans up their content network look for many of their partners to switch to Google, which has a deeper ad network and better relevancy algorithm.
If you have launched a new site and are not getting much Yahoo! traffic, submitting a few of your highest value pages is a good call. If you have key deep high value pages that are not staying indexed in Yahoo! this program also makes sense.
When Yahoo! bought Overture they had the market default position as being THE KEYWORD TOOL. As a company that makes most of its profits from selling keywords, how dumb is is for them to let their keyword research tool die without warning? If they are upgrading their paid search platform, killing the current tools without warning is a dumb first step toward getting marketers to warm up to the exciting new system.
Stop double and triple mailing the direct mail pieces. Do a bit of market analysis on your market position and current resources. Fire the people who keep doing the dumb things. Your easiest points of improvement come from analyzing your market position and leveraging what you already have. When you start again from an established market position is is silly to kill off your old market position, especially if you are already behind.
I need to fix my keyword research tool, since the death of Overture killed my keyword tool. I am thinking about either switching it to being driven from Wordtracker or Keyword Discovery. More on that soon.
It seems a large part of the reason that Yahoo!'s stock recently tanked was the market was punishing them for delaying their ad system.
I know factoring clickthrough rates into ad costs will help optimize their revenue stream, but does anyone think the new system will help them catch Google on the monetization front?
I don't. The three main reasons are
They are losing marketshare daily. Google has a stronger search technology and search related brand, and the next version of IE is going to integrate search into the browser. Even if MSN loses most of the associated browser distribution deals they will still drive up the traffic acquisition costs for those who win them, and since Yahoo! has a less efficient marketplace than Google they are not going to be able to outbid Google.
Google is already busy taxing noise out of their ad network when Yahoo! is just fighting to keep up with pricing, let alone creating easy account management tools.
Yahoo! is more cautious with trademark protection in search ads. Since branded terms are some of the highest converting and most valuable terms that choice probably costs them a fat packet of cash.
Caveman, one of my best friends in the biz, is great at picking up the high level changes (and maybe that is why he got the nickname algo guy). He made a couple great posts in a WMW thread about the update
Here he talks about filtering out the most appropriate page
Odd. I see orphaned pages (i.e., abandoned; not doorway pages) - with NO inbound internal or external links any more - ranking on page 1 of numerous SERP's. Don't think I've ever seen that before. ... They seem to be filtering out the best sub page to show for a specific search (e.g., "red widgets") and instead are now showing a page above it or below it or beside it.
When I mentioned Google ranking a home mortgage type page for a consumer loan (a few weeks back in a rant post) that I am now seeing the exact same page rank for the exact same query in Yahoo! (not due to any type of spam, but due to algorithms that are ranking page B for having navigation related to page A on it - see DaveN's post about a recent Google non-relevancy fiasco).
I am seeing some sub pages rank for things you would expect the more authoritative home page to rank for, and in other cases I am seeing the home page rank for rather specific queries where far more relevant sub pages exist.
I am seeing the move toward promoting authoritative domains in Yahoo!'s SERPs in general. Not only is the trend visible as a general rule of thumb, but I also have a crusty old authoritative domain. I extended the domain out from its initial focus into related higher margin fields. I have not built up the authority on those new pages yet, but they ranked well in Google due to crustiness and high authority links to the site in general. They also ranked well in MSN due to on the page optimization. The site was not getting much love in Yahoo! until this algorithm update. The love (and increased earnings) are likely due to Yahoo! placing far more weight on core domain authority and applying that throughout relevancy scoring for all documents on the authoritative site.
Here Caveman talks about Yahoo!'s shift away from a literal MSN type algorithm to attempting to move more towards a more elegant link based Google type algorithm
What if, for example, Y! substantially altered the way that links factor into the algo: Both from a quality and quantity standpoint.
Y's algo used to be much more onpage and kw oriented. Last year that began to change. Links became more a factor.
In this new update, links are again, IMO, playing a significant role: Both the quality and quality of links. Y seems to be exploring ways to push authoritative links more to the fore.
Brilliant stuff Caveman.
As a marketer, I think Yahoo! shifting toward a sitewide authority type algorithm that tries matching natural text is a big deal since it leaves MSN as the last literal type search algorithm. The current Y! algorithm hints that Yahoo! is willing to throw a bit of paid inclusion revenue in the trash can if it leads to more relevant search results. Within a year I wouldn't be surprised if
Yahoo! solves their guestbook and blog spam link problems (and some of the other low quality link issues)
common forum questions about things like keyword density and the like are replaced by people talking more about spreading out your keywords, writing naturally, and using semantically related phrases
many people trade websites instead of just buying / selling / renting individual links
about 100,000 free service sites pop up that are nothing more than link schemes (via stuff like add our link to your site with this badge or whatever)