Another month, another slow fade for the search engine that started it all.
Yahoo! (NASDAQ:YHOO) continues to slip in popularity, as the latest comScore findings show Google (NASDAQ:GOOG) and Bing-reawakened Microsoft (NASDAQ:MSFT) gaining market share at Yahoo!'s expense last month.
|
Core Search |
9/09 |
10/09 |
Change |
|---|---|---|---|
|
|
64.9% |
65.4% |
0.5% |
|
Yahoo! |
18.8% |
18.0% |
(0.8)% |
|
Microsoft |
9.4% |
9.9% |
0.5% |
|
Ask.com |
3.9% |
3.9% |
0.0% |
|
AOL |
3.0% |
2.9% |
(0.1)% |
Source: comScore qSearch.
The trend isn't surprising. Yahoo! has been slipping for months -- years, really -- on the search front. Yahoo! was serving up 20.5% of domestic searches a year ago and 22.9% in October of 2007.
Yahoo! remains a popular destination as a portal, but it's just coming up short in the lucrative niche of paid search that makes Google the envy of everyone else.
Is it curtains for Yahoo!? If we follow the trend, are we looking at a pioneer that will command just 15.5% of the country's search queries come next October?
Let's hope not. Yahoo! has a cash-rich balance sheet and a CEO who appears willing to shake things up. Yahoo! still has a shot if it's willing to be aggressive, acquisitive, and disruptive. Let's go over a few of the company's possible growth paths.
1. Kick Microsoft to the curb
I realize that Yahoo! was in a state of decline long before it decided to outsource its paid-search business to Microsoft this past summer. Stepping aside, however, is not the solution.
"Missing in the mix is the long-term cost of letting Microsoft become the silver medalist in search algorithms and paid search," I wrote at the time. In other words, once folks realize that Bing is fueling Yahoo!'s searches, folks will just cut out the middleman and start bookmarking Microsoft's hot rookie.
If there's still a chance to wiggle out of this 10-year deal, it's in Yahoo!'s best interest to break from Bing and embark on a lavish Bing-esque marketing campaign to reintroduce itself to its former audience.
2. Go mobile
Microsoft and Google have mobile operating systems out in the wild. Yahoo! has no skin in this game. Should Yahoo! dive in with a YPhone? Of course not. It's too late for that. However, the company should be trumpeting its Yahoo! Mobile suite of apps to Apple (NASDAQ:AAPL), Research In Motion (NASDAQ:RIMM), Palm (NASDAQ:PALM), and any other smartphone company with a proprietary operating system.
After all, Apple's iPhone is chummy with Google -- right down to offering YouTube as a pre-installed app -- but it won't be long before Apple and its peers realize that Google and Microsoft are the enemy. When they do, Yahoo! should benefit, since it's the only one of the three major search engines that doesn't pose a competitive threat down the line.
3. Let's go shopping
With $4.5 billion in the bank -- and billions more if it were to cash out of some of its Asian investments -- what's Yahoo! waiting for? If it's saving it's pennies for a rainy day, someone had better show CEO Carol Bartz that there's a deluge outside.
It's time to do a little shopping, but let's hope that Yahoo! hits a new mall this time. Previous acquisitions have centered primarily on display-advertising enablers. The company has also pursued rapidly growing websites that are tricky to monetize, including Flickr (which it nabbed) and Facebook (which it did not).
Yahoo! needs to acquire content in areas that segue naturally to high-paying paid-search ads. It needs to take a page out of the playbook from smaller Internet Brands (NASDAQ:INET), a network of sites that specializes in big-ticket travel, automotive, health, and real estate categories. They aren't all in favor right now, but Yahoo! needs to do more than serve up pages of free e-mail and pop open Yahoo! Messenger windows.
4. Be dependable
GeoCities and Yahoo! Briefcase are just some of the free sites and offerings that the company has shuttered this year. It axed its Mash social network last year. It can't go on like this.
Google has also killed projects, but it can afford to be finicky. Yahoo! doesn't have that luxury. If it keeps pulling the rug out from under the feet of its users, it's going to have a hard time rounding up an audience the next time it wants to introduce a new site or platform.
5. Keep turning traffic magnets into cash buckets
If you've checked your Yahoo! Mail account over the past two months, you've seen the site stepping up its promise to cash in on its "dormant social network," which happens to be its leading free e-mail service.
It certainly seems hokey to ask folks checking their email for a status update or to request updates from "contacts" lists, but at least Yahoo! is trying. The stickier it becomes to its users -- and the better it gets to know them -- the better its odds of successfully serving up ads that will be acted upon.
Yahoo! needs to lead in leads. Otherwise, it's just wandering down the road to irrelevance.
What do you think Yahoo! needs to do to grow again? Share your suggestions in the comment box below.
