At the Web 2.0 Summit this week Carol Bartz gave a “clean” interview where she managed not to sound like a sailor. There are lots of easy pot shots that you can take at Yahoo these days for once being the Golden child and then now being far behind in many ways. John asked a bunch of questions along these lines but the most interesting answer she said was about Search strategy.
Battelle lobbed the “why did you give up on that” question and Bartz had a quick but very reasonable answer. She said that it was a hard problem and a huge resource suck. At first it would seem crazy, near suicidal, to be a major internet player and give up on Search but upon review it is probably a good move for Yahoo. We have long known that their nearest neighbor algorithm is not as good as Google (nor Bing now) for returning relevant results. Their monetization engine is not built around AdSense and apparently they were dumping huge resources to maintaining a worsening position so they gave up and presumably now get money from Bing. Webmasters delight as there is one less thing you have to worry about, not that anybody cared much about Yahoo link structure anymore.
This is the strategy is similar to game of Settlers of Catan when you start competing for the 2 points handed out at the end of the game for longest road. Strategically you want to win this battle early and quickly so that nobody else even bothers to try (see Google) or make a big showy bid all at once to get back in the game and scare people off (Microsoft) but you never want to just slowly send your resources to stay in second place (Yahoo). The trick is making other people not want to compete with you because it will most always hurt the two people who spend a lot of resources against each other. In some ways Bing has freed Yahoo from trying because at that point they knew that they are going to lose and can gave up and spend their resources elsewhere.
Then again that last bit is the trick, what is Yahoo going to do if they are not doing search? Where do all of those engineers and smart people focus their energy now and how does that help Yahoo win the game? Anybody have an ore card for Yahoo’s bricks and wood?