Is YHOO overtaking GOOG in innovation?

Includes: GOOG, MSFT, YHOO
by: David Jackson

Yahoo (ticker: YHOO) is aggressively implementing Really Simple Syndication (RSS) across its network, with the recent upgrade to Yahoo News and the introduction of RSS feeds for Yahoo Shopping. Geeks are beginning to argue that Google (ticker: GOOG) is becoming a technology laggard, behind Yahoo and (gasp!) Microsoft (ticker: MSFT). Details and a quick thought:

  • Yahoo unveiled a beta
    of Yahoo News, including: a toggle feature that lets you see news
    headlines from a particular news source at a glance, a "My Sources" tab
    on each section that lets you see your RSS headlines and add feeds to
    the page; tabbed navigation on top of each page, with more weight and
    space given to the top story package; Y!Q contextual search technology
    embedded into key words in stories which brings pop-up boxes with links
    to relevant Yahoo and Web pages; reduced ads on story pages (one square
    ad within story instead of a top and side banner); and an "IM story"
    option that lets you send a news story via Yahoo Messenger instant
    messaging service. Mark Glaser gave it a glowing in-depth review, and reported that Yahoo has hired key people from MSN and the Wall Street Journal Online.
  • Yahoo also rolled out RSS feeds for Yahoo Shopping,
    allowing users to track updates to most popular categories such as
    digital cameras and new releases of music and DVDs.
  • Yahoo told Mark
    Glaser that it has "more people using RSS than any other service, a
    number of users that's "in the low millions.""
Note that Google (ticker: GOOG) was recently considered the leading
technology pioneer among Internet companies, and Yahoo the laggard. But
influential geeks (I'm writing this for investors; some of my best
friends are geeks...) are beginning to criticise Google for failure to
keep up with Yahoo, particularly vis a vis RSS:

  • Dave Winer says
    that "Perhaps it's NIH that's keeping them from embracing RSS as their
    two main competitors have. Whatever it is, Yahoo is dashing in front,
    with Microsoft close behind".
  • Richard MacManus writes
    that the Google News team are " being challenged by Associated News
    (NYSE:AP), they're inconsistent about which news sources they allow onto
    their pages, and they rather strangely don't offer RSS feeds".

Comment: This reversal of perception hasn't yet been adopted by hedge funds, sell-side analysts or mainstream investors. Implications???