Yahoo! learned a painful lesson from
slump it experienced up until this year – that relying on Internet advertising is great when companies are willing to pay for advertising but not when those companies don’t have money to spare for Internet advertising campaigns! It’s recent ventures into “paid for” services is likely to be complemented by continuing ventures into subscription-based services, perhaps involving Earthlink.Terry Semel took reigns of Yahoo! just in time to avoid Yahoo! succumbing to internet bubble burst syndrome by steering company away from purely “free content and services model” for customers, and into world of customer-oriented revenue-generating services – often against instincts and principles of Yahoo!’s founders, Jerry Yang and David Filo. With help of extremely sharp, and greatly respected Susan Decker, Terry guided company through its difficult adolescence into adulthood.
Terry certainly had right motives, though some of ventures have yet to pay off – Yahoo! Personals has been a goldmine, and Shopping and Finance have been worthwhile, whereas Yahoo! Auctions has been, predictably, less successful (primarily due to late entry into a market where Ebay had already established its loyal user base). Yahoo! has also done well offering paid premium services – not only offering larger email storage space (Gmail put a dip in those earnings but earnings are still there) but also extra web space premium services, spam blocking services, and others.
Longer term, customers will recognize benefits of Yahoo!’s mail solution over that of Google’s. Long before Google came up with idea of offering huge amounts of storage space for free (supposedly primarily aimed at users who wish to store photos and mp3s), Yahoo! was already offering free “unlimited” storage space for photos via its associated services such as Yahoo! Photos, large amounts of free storage space for web sites and mp3 files via Yahoo! Geocities, and for documents via Yahoo! Briefcase.
Being able to access these services, as well as myYahoo! (the personalized portal), games, calendar, greetings, clubs, toolbar, messenger, chat, mobile, finance, and a host of others all from a single login and password, will give Yahoo! edge over Google for a long time to come. Especially with recent announcement that Yahoo! is going to purchase MusicMatch, arguably best music player on net! What a great complement to its existing Launch music services, recently declared best on net! Integration between Google properties just is not there – even if you signed into Gmail already, you have to sign in again (often with a completely different userid and password) to get to Google Groups or to Google Adsense, for example.
Yahoo!’s respect for consumer, and recognition that consumer always has option to go elsewhere, will also win through. Already, Gmail has shown itself to be bug-ridden and problematic for end consumer, and with its security and privacy issues, it is clearly a far inferior product to Yahoo! Mail, a professionally engineered solution, architected by some of sharpest minds on planet. Every change to Yahoo! Mail is planned, designed, reviewed and tested as thoroughly as code that runs NASA space shuttle missions. It is clear that Google Gmail solution is less well-architected, and that is being very kind to Google.
The same goes for Overture compared to Adsense – Google’s marketing campaigns may have given Adsense edge up until this point, but Overture is clearly a far superior (and far cheaper) product to use. And, of course, Google search engine is great when your company is at top of listings for your selected keywords, but Florida Update made a lot of Google customers extremely unhappy, as they lost a vast number of customers overnight, with no warning - something Yahoo! has never done to its customers (another sign that Google’s engineering and testing of its software is not up to Yahoo! standards). Why Yahoo! has not capitalized on this big mistake by Google is beyond me – their ethics and professionalism probably prevent them from running down competition.
