The blogosphere is abuzz over whether Yahoo has given up an search. There’s too much parsing going on here. Yahoo isn’t giving up. Yahoo is staking a claim as to where it sees the greatest growth opportunities.
A couple points here. Let’s get serious. It’s very unlikely that Yahoo is going to overtake Google in search anytime soon. Scratch that. It’s extremely unlikely. It probably wasn’t a good PR technique for CFO Susan Decker to make a statement in a negative form, but it is reality.
Nonetheless, what Yahoo and every other company can do is work towards creating the best product it can in its own unique way. Let’s assume that Yahoo will continue to improve search–as all the competitors will. But this is just one piece of the competitive landscape. In general, the essential building blocks of success are to innovate, communicate, inspire, and nurture.
And here, it appears that Yahoo has a strategy for growing its market. Their argument goes that it’s not just about searching. It’s about the social networks that bring us together. It’s about the theory that we are communicating when we search. It’s about facilitating micro and macro communities of pictures, links, knowledge, or whatever.
I have no idea if this is where the markets want to go in the future. However, it’s a reasonable strategy for growing networks of consumers as well as networks of publishers. Facilitate enough people on each end and you have an economy.
(As an aside: You have to go no further than Apple to see the value of doing something well and not being the biggest leader in a de facto market. The markets will often reward a competitor for finding and facilitating growth. Apple has done this with the micro-consumption of music.)
Is there room for search to grow? Yes. Is there more room for growth outside of search proper? It appears that Yahoo is gambling that the answer is yes. We’ll have to see who win, but it is clear that Yahoo isn’t quiting.