In 2000, you could ask someone what search engine they used, and you would most likely hear Yahoo (or possibly AskJeeves, AltaVista, possibly Google). Heck, even the movie 2000 sci-fi film Frequency mentions investing in Yahoo stock will make you rich. These days, Yahoo is typically known as “that place where I get my news sometimes.” Yet, Google, who at one time was merely a blip on Yahoo’s radar, is so well known people refer to it as a verb (Just “Google” it!). What happened to make one company rise to dominance, while the other one fell into obscurity? And is there anything Yahoo can do to bounce back?
In recent years, Yahoo! has a horrid track record when it comes to CEOs. Terry Semel, who ran the company from 2001-2007, didn’t even use email, yet he was trying to buy out Google for roughly $2 billion UNDER what many thought they were worth (Vogelstein, 2007). And as Google skyrocketed to control 70% of the search engine market, Yahoo backslid, and backslid, and backslid. In 2009, they hired Carol Bartz to be CEO, who was under pressure from her first day to turn the entire company around. An impossibly daunting task, Bartz was fired after only two years (Kopytoff & Miller, 2011). This year, Yahoo announced they would be firing they’re newly hired CEO, Scott Thompson, amid rumors he falsified his resumé (Stewart, 2012). The guy didn’t even make it 6 months!
Yahoo just announced last week that they were hiring former Google executive Marissa Mayer as their new CEO. Coming from argueably their biggest rival, maybe Mayer has what it takes to turn things around at Yahoo.
Now, where Yahoo has seemingly screwed up, how has Google been so successful? Many would argue that a lot of Google’s success has been through acquiring the right companies (YouTube, Blogger, Zagat), but a huge part of how they cornered the market is their coveted search engine algorithm. It allows for the search engine to seemingly anticipate, based on previous searches, what they user is going to search for. They have also tweaked and improved this algorithm numerous times (Levy, 2010). Knowing how people search is a key to Google’s success. After all, information can be worth a lot of money. In fact, Google’s mission statement is “to organize the world’s information.”
Google also uses an auction-style strategy when it comes to selling ad space, called AdWords. Potential advertisers can bid on key words and search terms, and the price they are willing to pay each time a user actually clicks on the ad (Levy, 2009). Websites like Amazon or Ebay could use this approach to sell ad space. Amazon and Ebay could allow manufactures to purchase keywords in order to pop up on their search bars more often.
Google has also ventured out of the search engine game to much success (more or less) by releasing the Android smart phones, Google Plus social network (not quite as successful), and their own browser, Google Chrome. The introduction of Google Chrome only intensified the “second browser wars.” (Shah, 2012)
And as of May 2012, Chrome has officially become the most used browser, beating out Firefox and former juggernaut, Internet Explorer.
Google shows no signs of slowing down in innovation, nor the stock market, so it will be interesting to see if Marissa Mayer can bring some interesting and progressive ideas to finally pull Yahoo out of the virtual ditch.