Is Yahoo Falling Behind Google?
2. December 2006 – 01:19 byRecently Yahoo has got under pressure both from the financial world and internally by a memo of senior vice-president Brad Garlinghouse.
In September Yahoo issued a warning that revenues will be affected by a slowdown in advertising spending by some major industries in the third quarter (see some details here). Yahoo shares fell accordingly.
Two months later Brad Garlinghouse has complained in an internal memo, which has gained popularity as the Peanut Butter Manifesto, that the company was less focused because they “want to do everything and be everything — to everyone”.
Revenues as well as technology and the brand name are often compared to Google. Many people see Google on the upswing.
But is Yahoo really falling behind Google? I am not sure. Monitoring company Hitwise has released some interesting data for both the US and the UK market this week. The studies compare the top 20 properties of Yahoo and Google.
As you can see Google is dominating the search market and its search engine is the number one property by far. But you can also see that the majority of its top 20 properties don’t even reach 1% of the market share. Data for the US is even worse than for the UK. Google is heavily relying on the search engine and revenues gained by it.
Yahoo’s properties are more balanced by comparison. So they don’t have to rely on just one property alone to make money. And I think it is always good to have different sources of revenue.
I think there is a lot of pressure on Google to remain the world’s number one search engine. However the computer and especially the internet world is changing rapidly as we know. Netscape, Altavista,… companies that used to be big. So if there will be a new search engine with innovative technology on the horizon Google will be affected much more than Yahoo for example.
Also Google probably has some similar problems in terms of focusing as Yahoo. Co-founder Sergey Brin complained that he was “getting lost in the sheer volume of the products that we were releasing”. The problem is perfectly documented by the Hitwise study. So not surprisingly Google Answers was closed as it could never compete with Yahoo Answers.
There is some hard work ahead for both companies to maintain the status quo.
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