One Goal, Two Approaches
An interesting bit of news made the rounds the past two days, that of the four-year old Google Answers shutting down. In theory, it made for a nice compliment to the company’s core product – a purely technology based approach for finding relevant information online. While the core search product provides almost instantaneous and extensive results to specific queries, that, as most have experienced, does not necessarily equate to finding what you want. Enter the former Google Answers, a marketplace where searches could ask others to research their question. Time costs money, so those asking had to create incentive those approved to answer with a dollar value per successful response. Again, in theory, the product had the potential to fill in the gaps left by the purely technology approach where searching is more like reserve Jeopardy – simplifying questions into keyword phrases.
As Google wrote, on its official blog, regarding Answers’ closure, “Google is a company fueled by innovation, which to us means trying lots of new things all the time — and sometimes it means reconsidering our goals for a product.” In practical terms they have stopped allowing new questions and will only allow new answers until the end of the year. So, what does this mean for those who liked the Q&A experience? Chances are many had already switched to Yahoo Answers, a parallel service that has received rave reviews and incredible traffic growth. It passed Google Answers in traffic during its third month and proving that it isn’t a me too service has (according to HitWise [http://weblogs.hitwise.com/bill-tancer/2006/11/charting_answers.html]) 24x the traffic. That Yahoo’s service was better and free tells only part of the story.
Google Answers versus Yahoo Answers reflects not just the success of one product; it embodies Google versus Yahoo. Companies can change over time, but often the original process, methodology, and competencies will continue to influence the company in its later years. Think back to the original Yahoo. It was a web directory turned portal; people put it together, not machines. Operationally, this meant two things. First users found sites initially by drilling down through a hierarchy (think of a really big site map), and second, instead of a computer actively crawling the web looking for things to include, employees and webmasters contributed. Despite Yahoo’s moving (via acquisition of Inktomi) towards a pure technological approach to search, it never gave up its reliance on people in the process. And, nowhere can this be found more than in their paid search business.
As a portal and top destination, Yahoo had the greatest share of search traffic. Being technologically savvy but not a pure technology company, they didn’t have their own paid search platform. They, like MSN and many others, relied on Overture to create the marketplace and supply them with ads. In a smart decision, Yahoo purchased Overture instead of building the paid search business from scratch. At the time of the acquisition, Google had yet to launch its own paid search, but when it did, Yahoo dropped the ball. Google came to market with a system that focused exclusively on automating the search advertising process, removing people as the bottleneck for new ads to go live. Google made the entire process available online to advertisers – no hand holding, no subjectivity.
Over time, Google only continued to improve its automation. While they have an editorial staff on hand, they get involved only after ads have started to run and have been created. With Yahoo, their editorial staff gets involved before ads can run. Advertisers couldn’t add tens of thousands of keywords by themselves. They have to wait for one of the staff to approve them. Yahoo’s emphasis on controlling the experience, also takes away from the competitiveness of the marketplace. Rather than have every word represent a unique bidding opportunity, they collapse the words, which means that cars, car, auto, autos, and automobile, etc. count as only one word. This restrictive environment also impacts affiliate marketing. In Google, two companies can bid using the same display URL; they simply choose the one that provides the best search experience (determined by a quality score influenced bid price). With Yahoo, the first URL in the system pretty much wins, and this is but the tip of the iceberg.
Ultimately, both Google and Yahoo have the same goals with respect to search. They want the user to find what they want and have a positive search experience. The two have simply gone about it differently. So far, Google’s approach has won out – the company earns more per query on average, has greater coverage, and more advertisers. Their technology based approach has yielded an arguably greater experience for end users but most certainly for advertisers. With the decision to build its new search platform, Yahoo has, without directly saying so, conceded the benefits of Google’s approach. Overture’s complacency cost them greatly, but Yahoo can still succeed, as we see with Answers. It won’t succeed though by taking on Google tit for tat. The company’s cultures and origins differ too greatly for Yahoo to win in areas that require a technology centric approach. The lesson with Answers which will have implications to search is to focus on areas that fit their strengths and culture. Adopt best practices for the other areas, e.g. search, but don’t necessarily try to become as good in something if it doesn’t fit your skills.
