Google v/s Yahoo

3 Reasons why Google bettered Yahoo

As Google celebrates its launch anniversary today (on 15th September), it has affirmed its place as the Search synonym in web space. Way back in the late 1990s and early 2000s it faced tough competition from Yahoo. Infact, Google v/s Yahoo was a yesteryear favorite tech discussion. Yahoo, once a favorite for many in the internet space, is nowhere to be seen. Let’s look at the 3 key strategic areas which defined the fate of both these companies.

Customer First

Product positioning played a major differentiator between Google and Yahoo. Google always cared and kept the end-user in mind. Hence you see that Google’s pages are defined very well and, provide far better customer experience. Yahoo on the other hand always focused on the advertisers. Hence Yahoo always has so many links to various pages and applications.

Yahoo started off as a simple web directory and after around 2000, it tried to get the most out of its customer base. In the process opened more avenues for advertisers on their home page. At one point it reached a peak of providing 255 odd links on one single page. It had to further consolidate this number heavily and bring it close to 100 over the years. However, imagine as an end customer, you want to search a single meaning of a word, and you see 100 odd links just before you start your search. The obvious lag in page load hurts user experience. Google put the customer first and has survived the test of times.

Today if you want to search for the meaning of a word, it would not even take a minute from launching google to completing your journey. Instead of becoming a platform for advertisers, Yahoo ended us selling Homepage as reality space and forgot customer experience. The strategy of keeping advertiser first along with many changing heads at Yahoo compounded the problem for them. Eventually once a favorite of many, no wonder, Yahoo suddenly become irrelevant in internet space

Build v/s Buy

Yahoo acquired Rocketmail which became Yahoo Mail, acquired Classic Games which became Yahoo Games and eGroups became Yahoo Groups. Even the very famous Yahoo Messenger was an acquisition. Google, on the other hand, did acquire some services like YouTube, however, it has developed some core functionalities in house. Yahoo’s core (or most used services) were acquired; whereas; Google built its own core. Not only this, Yahoo, which had started as a search engine, once for good 4 years was using Google’s search engine. Rather than fixing issues, Yahoo ignored them for long.

Yahoo was that energetic kid in the school who wanted to do everything in the 1990s. It wanted to be not only a search giant but also best in Mailing and Games and News and whatnot. And you know what happens to a kid when it tries to run in multiple directions and does not know what to focus on. Gmail, GTalk and many of google’s corresponding services were launched much much after Yahoo’s. But today they have been able to survive the test of the times.

Strengthening the core

This one example is one of my favorites when it comes to strategy execution. In the early 2000s, Yahoo when was focusing on expanding its base and was using rented Search of Google, Google was focusing on strengthening its core. As per this article in TechCrunch, Google focused on the underlying file system. This was done to achieve scalability and creating a lasting system for years to come. As mentioned in the article

Instead of using the latest storage appliances as a foundation, the Google File System used commodity servers to support a flexible and resilient architecture that could solve scalability and resiliency issues once and for all, simplifying and accelerating the future rollout of a wide range of web-scale applications, from maps to cloud storage

The unified core for all services meant that Google had to make changes only once for all its services, whereas, for Yahoo, it had to make changes to all its systems every time it had to modify something. Basically modifying code twice for two services, doing the exact same thing.

The early 2000s was a difficult time when the bubble had busted for many internet companies. At such a time it was easy to look for monetization options which Yahoo did. Whereas Google focused on strengthening its core which is showing results, with some amazing integrations today.

Focused one survives

All in all, when it comes to strategy, Google won the internet war by not following what competition is doing and charted its own course. Yahoo looked for short term glory and tried to become a Media company which it eventually could not become.

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