Outside of Search, Google Doesn't Matter

Includes: AABA, GOOG
by: Andrew Schmitt

There was an interesting column in the New York Times last week, outlining the different design approaches taken by Google (NASDAQ:GOOG) and Yahoo! (YHOO). It also provided quantitative values that reinforced a suspicion of mine.

Google holds a commanding lead in search queries with 45% share, compared with 30% for Yahoo! and 15% for MSN. They do a fantastic job of monetizing this share, much better than Yahoo or MSN. But the reality is - outside of search and advertising based search, Google just doesn’t matter much.

Google is fantastic at producing products that elicit the praise of the tech press and blog-jihadists. It appears to me that their solution to everything is Search, and that a white box that you type text into is the only thing that should separate a user from content.

We believe strongly in the concept of the disintermediation of media - i.e. eliminating the middleman between the content producer and the consumer. But I think Google takes too minimalist an approach to appeal to the mainstream.

Unix is a fantastic operating system for the same reasons, but what percentage of the population knows how to use vi?

Yahoo is more of an aggregator, with a less minimalist approach than Google. It is far more application and service oriented. This approach works better for applications like Finance, News, Maps, and Media. I like the fact I can get movie reviews next to the showtimes. Yahoo has always struck me as being more sticky, and more mainstream. Yahoo is what most people I know use.

Most people will love the concept of disintermediation as it extends to more and more content, but they won’t like the cold sterile approach Google uses. As the middleman is cut out of media, Google will need to adjust their approach as people seek applications and services more like their previous couch potato experience.

There is tremendous value in the aggregation Yahoo provides today. They need to figure out how to monetize that better.

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