Yahoo picking up the pieces

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Despite all the chatter about how hurt Yahoo is at this time, the panic doesn’t impress me. In fact, I don’t believe it. I don’t think Yahoo is that irrevocably harmed–or was that harmed to begin with even before all this Microsoft-Yahoo talk.

In fact, I kind of see Yahoo being in an interesting, good position. It has lots of users. It has a good reputation among its users. And it has experience on the web. Don’t forget, it’s also the number 2 guy in search behind Google.

There’s been lots of talk over this past year about how Yahoo was going down hill. Much of it came from the Bay Area. Doesn’t surprise me one bit, because there’s so much competition for startup talent in the Bay Area. Yahoo became fertile recruiting grounds–that is if you couldn’t get anyone from Google. However, lots of people have been leaving just about everywhere over the last year or so. It doesn’t mean one thing or another–other than a handful of first generation people peaked in the organizations there were in and took the opportunity to “cash out” and a bunch of others started seeing greener grass.

I still think though that Yahoo is in a great position to ramp up. Here’s why: Google may be the darling right now but they’ve become lathargically uninspiring as of late. The slide started about two years back or so when gobs of Bay Area people started complaining about Google releasing stuff too fast and needed better processes. I cringed at the time, hoping that Google wasn’t paying attention. Unfortunately, it looks like they were. The problem? Much of the comments came from third-party management experts–not the kind of mindset that created Google in the first place. Like all companies, Google was entering a new phase, but the lesson they should have learned was not all about how to slow things down so that they could manage things better. It was to learn how to manage what they were capable of doing.

Anyway, the result has given a big opportunity to Microsoft and Yahoo. In fact, before all of this merger talk got started I was going to blog about how of GYM, Yahoo would be at least for me the most interesting of the three to work at. Why? Because I love a challenge and I could see how Yahoo has the capacity to touch a lot of lives. Yes, Google and Microsoft can too, however, it seemed to me that of the three Yahoo potentially might be the most entrepreneurially open. I could be flat wrong on this, but from the outside it seemed so.

So what I was seeing was that while Google was spending time filling holes that Microsoft was leaving behind, and Microsoft was doing whatever Microsoft was doing, Yahoo could continue doing things that ultimately meant something to people. Like what? I’d like to see Yahoo build out its archiving of reference material. Books. Encyclopedias. Dictionaries. Movies. TV. You name it. If I want to find something–something correct–I’d go to Yahoo. If I wanted to really understand something, I’d go to Yahoo. Now maybe that would give Google huge revenues from NextTag and eBay and so on from all the searches of Britney Spears, but in the long term I’m confident long term will win out.

I’d like to see Yahoo services for looking up words. For looking up medicines or treatment options. For looking up well-known people. For facts. For doing your homework. For figuring out how to fix something.

Isn’t this what Google or any other regular Internet search does? Kind of. But two things. First, Yahoo’s DNA was as a directory–somewhat like a library model. So at its core DNA it understands how to be a reference–an archive–and how to help people get access to the information. The next step would be to not just provide web pages to these look up services, but to allow access to the core services themselves and to facilitate the growth of context accessible information. For example, why can’t apps call a Yahoo service to do a dictionary lookup? Why can’t they use Yahoo to archive every step you’ve taken in every program so you can play back what you’ve done? Yes, these can all be done with offline services too. But the point is, who might be best positioned to provide them online in an always connected world? Yahoo would seem like a good match.

Now does Yahoo have to create all of the content itself? Absolutely not. But it could enable content creators–big or super small–sharing revenue along the way to publish good reference content. With the right mindset Yahoo could enable a fresh, context driven version of the web. Wikipedia is kind of doing this already in the traditional web model. But notice, it’s not in the service model. It’s not computer friendly content.

It’s not just about working with content providers that want to type in a bunch of freshly authored content. It’s about working with cellphones that have sensors that can be leveraged to automatically tag content. It’s about doing the same for smart cameras as I’ve blogged about earlier.

The money people will argue that there’s no money in this or that it’s already been done. They might be right in the short term. But then again, if someone does it, would I use it over some other “search engine?” You bet. And more importantly my programs would use it too. So slowly Yahoo would become inextricably interwoven with a large network of apps. Now once we get all of these computers talking with one another, now can you imagine how valuable and significant a systemic change that would be? I can.