New Buzz at Yahoo!

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Yahoo! (Nasdaq: YHOO  ) is giving its social news website a mainstream push, perhaps to its own detriment. Yahoo! Buzz is now letting any of its users -- 5 million and counting -- submit stories that readers can choose as higher or lower in relevance on the site.

The move makes it a lot more like social news pioneers Digg, Reddit, and StumbleUpon. It's also a serious tactical retreat from when it launched in February. In its original incarnation, Buzz limited its story submissions to those published by sites that monetize their websites with Yahoo!-syndicated ads.

It was an intriguing premise. With the promise of promoting its top Buzz stories on its highly trafficked Yahoo! news portal, it was a great incentive for third-party publishers to consider Yahoo!'s YPN product, compared with simply handing over their contextually targeted ad space to market leader Google's (Nasdaq: GOOG  ) AdSense.

Then again, I guess the practice grew hypocritical when Yahoo! began to seek out Google to service some of its own non-display advertising needs two months later.  

This move to tear down the submission wall offers potential and potholes. Moving from 400 pre-approved publishers like New York Times (NYSE: NYT  ) and GigaOm to an open format, an already-popular site will become even more virally potent. Variety would also be nice. As of this morning, there were just 18 stories under the business category during the last 12 hours.

The problem with that wide-open democratization is that it opens up the door for some publishers to try to game the system by "buzzing" up their stories while "buzzing" down the competition. It happens. Web 2.0 still hasn't grown a conscience.

It also remains to be seen if this is traffic that can be effectively monetized. Microsoft (Nasdaq: MSFT  ) has a deal to serve up ads on Digg, but it was suspiciously absent from last month's buyout rumors. Wouldn't it be all over Digg if Mr. Softy was afraid of someone else cashing in on the site's ad-squeezing potential?

Yahoo!, after all, is a company that has never had a problem landing page views. It simply fails in that its biggest magnets are areas like free email and stock discussion boards that are notoriously tricky to turn into marketable leads.

So good luck walking the tightrope here, Yahoo! If I see this story on the site, I promise not to buzz it higher.

Some other recent Microhoo dealings:

Microsoft is a Motley Fool Inside Value recommendation. Google is a Rule Breakers pick. Try any of our Foolish newsletters today, free for 30 days.

Longtime Fool contributor Rick Munarriz is a fan of Yahoo! and Microsoft but not of bad weddings. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

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  • Report this Comment On August 19, 2008, at 5:25 PM, rockt wrote:

    That's a bit unfair Rick, you were quite critical of how closed it was in your original article, and now you're cautiously worried about it's new openness?

    I know Yahoo are far from perfect, but I still think Buzz deserves a chance. Digg suffers from the problem (and original advantage) of being used by the tech savy, so the stories dugg tended to reflect that. Yahoo might have a more mainstream audience which could make Yahoo Buzz have a wider appeal than a site like Digg. That's a big might, but considering the amount of eyeballs that Yahoo can direct towards it, I think they deserve a chance, and hey, at least they're giving it a try!

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