Sramana Mitra at GigaOM tries to makes sense of the recent reorgs, cutbacks and general malaise at Yahoo. Mind you it's sometimes hard to figure out how people can cluck about a company that has over 500 million unique audience members, but clearly a USD 20 billion loss in market capitalization since its peak is bound to bring soul-searching in many major company. Sramana's suggestion is for Yahoo to focus more on excellence in specific vertical markets rather than to get lost in trying to out-everyone everyone else. Oddly Sramana gives as one suggested change the addition of photo processing service Shutterfly to Yahoo's Flickr photo community, even though Flickr has had the QOOP photo printing service for some time now.

This points out a major problem that many content aggregators face: it's almost impossible for an all-singing, all-dancing content vendor to buy enough good content to compete cost-effectively with specialists in any one market vertical. Yahoo could buy its way into a more dominant position in verticals such as travel, jobs and real estate classifieds by purchasing market leaders and then position management that wouldn't stop until they had dominant positions, but there are only so many verticals in which one can dot this effectively and still manage to maintain both rapid responses to market needs and the advantages of scale. Thomson has discovered this to a large degree as it has chosen to divest itself of market verticals in which it was both not possible to dominate effectively and to take advantage of common infrastructure for legal, scientific and financial markets more deeply.

The main problem Yahoo faces is that its brand does not resonate effectively with many of its holdings as well as many of its core offerings. In terms of breadth of content that it licenses or manages there's no single provider larger than Yahoo in online markets. That's a fine position to be in if you're a Google with a brand that is functionally oriented more than vertically oriented, but when you're more about destination content it's hard to get a broad encompassing brand to work for both functionality and destination content - even when there's comparable functionality or content available. People gravitate to Google for search over Yahoo as much for branding reasons as they do for its technology: that is, Google is a "techie" brand, so it's viewed more as a tool for solving specific problems. Yahoo has great content, but with a handful of exceptions it's not really seen as a tech tool intuitively. Strangely Yahoo's focus on well-designed user interfaces only seems to exacerbate this branding issue. By looking more user-friendly and idiot-proof than Google and other tech-oriented brands it continues to send signals that it's a company focused more on destination content than leading-edge content technology.

I'd hesitate to call Yahoo a dying brand, for it has a wealth of assets that are hard to beat in many arenas. But it is a brand in search of its soul, captive in large part to an earlier generation of the Web when aggregating content from existing media brands seemed to be a lot more powerful business concept than it is today. Google's more agnostic approach to content aggregation and more askance perspective on marketing alliances with established content brands has enabled to keep its content acquisition costs relatively low and its ability to focus resources on transformative technologies and approaches to markets relatively high. In an era in which a brand creates trust moment by moment Google's more contextual and flexible approach to brand management carries with it inherent advantages, as do many social media brands focused on transformative technologies.

Yahoo need not become another Google from a branding perspective, but it does need to think about the positioning of its brand far more carefully before it tries to focus on improving existing product lines that may not be well aligned with a repositioned Yahoo brand. I remain optimistic that this can happen over the next few years, but I don't expect a short-term turnaround.

Labels: aggregation, portals, vertical search, Yahoo

CNET News covers the first major ratings results from its revised audience ratings methodology at comScore's Media Metrix unit and the results are not altogether rosy for major portal providers. According to CNET under ComScore's new qSearch 2.0, Yahoo lost market share from a year ago and is now at 23.5 percent for July, while Google gained share, reaching 55.2 percent market share. The New York Times notes also a fall in Forbes.com's audience measurement from 15.3 million in its original February data to a revised figure of 13.2 million.

One of the key factors aiding Google in the new measurement system is comScore's inclusion of search queries initiated via Google's infrastructure through search partners, as well as queries into "universal search" categories such as news or images from a search engine's home page initiated off of an initial query.

All of this builds audience share, which despite protests from other portal providers about quality audiences is still a major factor. The difference now, though, is that ratings companies are recognizing that in a world of embedded content, OEM relationships and mashups the "here" of content is less about who comes to your site and more about how your content gets in front of audiences in many venues. Jeff Jarvis notes in a "portals are past" rant that it doesn't matter if you get 10,000 impressions on a site with an audience of 100 million impressions or from multiple sites with smaller audiences, which is somewhat to the point but misleading.

With advertisers focusing increasingly on conversational marketing and contextual ad placement the new audience metrics are rewarding publishers whose content can engage those audiences in as many finely defined contexts as possible. The issue is less the total size of a portal's audience and more the ability of a portal to define the right audiences for advertisers. It isn't so much a matter of "big is bad and small is good" as it is getting the right context for your audience no matter where they congregate.

This is where Google has done itself an enormous favor over the past several years in encouraging the use of its content via mashups, Google Co-Op and other tools that make it easy for both professionals and amateurs to use Google content in so many different contexts.
There is a lot to be said for the strategies of portals such as Yahoo! and Ask.com to engage audiences more deeply at their own destination sites to build quality audience engagement but they have lagged behind Google in defining unique contexts for content beyond their portals that may be less heavily branded but of equal value to advertisers. At publisher sites such as Forbes.com the problems are not so different, with a preponderance of traditionally syndicated content building up clicks but failing to produce enough unique content that can make a dent through their own syndication strategies to take advantage of new audience metrics.

In all of these instances Google gained an advantage by focusing on syndicating context rather than content, avoiding the expenses and lethargic pace of traditional content licensing deals in favor of making it easy for people to find anyone's content in the right context and to build additional and unique content around it. This can happen on large portals or small portals - it matters not to Google, as long as it keeps growing.

We've long held that portal strategies were topping out, so none of this comes as a terrible surprise, but it's interesting to see how advertisers in search of meaningful metrics are now one of the key drivers that are showing the way to online publishers who may have doubted the value of Google's strategies to advertisers. Traditional portals will continue to be important as branding mechanisms for content producers and marketers but the highly portable value of context is beginning to to carve away at the bottom line of portal producers.

Labels: audience measurement, embedding, mashups, portals, search, Trends