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Yahoo has the opportunity to be a mirror to its users

Yahoo has the opportunity to be a mirror to its users
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First Published: Mon, Aug 31 2009. 11 19 PM IST

Updated: Mon, Aug 31 2009. 11 19 PM IST
Many people think that Yahoo Inc. is as good as dead: investors have driven the stock down almost 20% since its recent deal with Microsoft Corp. But I think the company is now in a stronger position to stake out new ground, rather than fight with Google Inc. over stale turf. Leave that to Microsoft.
Now that Yahoo has freed itself from its fight with Google, it can return to its roots as a directory company that helped Internet users make sense of the world around them. Indeed, back in 1994, Yahoo started with a team of editors who combed through the small amount of information that was then online and generated lists of the best content, complete with links.
Google showed up with an automated tool to search for content—any content—and Yahoo used that service before developing its own search capability.
But the world has changed. The problem now is not finding information; it’s filtering it and structuring it. TMI—too much information—has become a recognized acronym.
You can’t rely on human editors to structure information any more; you need automated tools, augmented by human expertise and specific domain knowledge. But search alone doesn’t work, either: search is like a flashlight in a dark room; it pinpoints one or two things but leaves the surrounding space murky. What people really want is a lighted room, with things displayed neatly on labelled shelves.
Fresh package: The Yahoo headquarters in California, US. Freed from the distraction of the search engine wars, the company can focus on making the entire Yahoo experience more consistent and integrated. Erin Lubin / Bloomberg
That’s what Microsoft has done with Bing, in a few commercially oriented domains. But the opportunity goes beyond the world of shopping, to all the stuff out there that Google helps you find (and that is so enticing but ultimately limited as a business proposition).
Yahoo’s biggest opportunity lies within its half-billion registered users’ own possessions and habits, their photos and friendships and electronic data that is now becoming sufficiently extensive and complex to need management.
This is Yahoo’s opportunity—to make sense of the world to individuals.
Several existing companies are leading the way, but they are not as trusted as Yahoo; nor do they have the large user base that will enable Yahoo to extend saving and managing to sharing, so that users can see their own data in the context of others’.
People spend a fair amount of time searching for new stuff, but in many cases they would like to relate it to old stuff—specifically, to their own information.
There’s a diffuse but gradually sharpening trend for people to manage their own information online—not just their finances at Mint or Wesabe, but also their book preferences at Amazon, cellphone records (Skydeck), physical activities (Nike, Garmin, and the like), friendships and friends’ activities (Facebook/FriendFeed and others), travel (Dopplr and TripIt), health (Polka.com), music (iTunes, iHearditOn, and so on), and so forth.
Searching the Internet gets you to places where you can book travel, buy music, find walking paths, and trade stocks, but these sites are generally not where users can aggregate, manage and analyse their own content and data. Yahoo can become that place.
What does this mean from a business point of view? Freed from the distraction of the search engine wars, the company can focus on making the entire Yahoo experience more consistent and integrated.
Internally, it needs to combine its services more closely. It has already provided a single log-on for all its services, including Yahoo Mail and acquisitions such as Upcoming (events) and Flickr (photos and video). Its new home page makes it easy for a user to assemble a variety of services in one place.
Yahoo is open enough to offer such third-party sources as The New York Times and The Wall Street Journal, but even its own services generally provide only generic content around, say, healthcare and stocks, rather than the ability to manage one’s own health data or stock portfolio.
This raises another issue: call it transparency or call it privacy. Yahoo and a number of other companies—including Google—are already working on a standard for displaying information about the advertisements a user sees: Yahoo’s edge is that it can show this information without embarrassment. It shows ads from third parties to its users, but it does not sell their data to anyone else.
In a world where users worry about—and regulators legislate against—the tracking of users, Yahoo doesn’t have to follow its users across the Web. It knows enough about them, openly, from what they do on Yahoo.
Users can specify how much of their travel plans, for example, they want to share—all the details with family and colleagues, or all the places they have been to with everyone—after the fact. I’d be happy to share my travel plans with, say, British Airways Plc. if I thought they would give me a good deal.
Its users know what Yahoo knows about them: not a record of all the sites they visited, but their behaviour on Yahoo and, potentially, their data.
But it’s the user, not Yahoo, who can make the decision about what to share with British Airways. For those who care, this is a big deal; for those who don’t, they will know only that Yahoo has a good record for two-way disclosure.
To fulfill this broad promise, Yahoo should now either buy or build a variety of services that help users manage their own data. The services described would be a good start, but there are many more, and Yahoo has the tools and the audience to build some of its own.
None of this will be easy. It could almost be as complex as designing a search engine.
But it would be worth it. After all, for many people, the most fascinating thing in the world is a mirror.
©2009/PROJECT SYNDICATE
Esther Dyson, chairman of EDventure Holdings, is anactive investor in a variety of start-ups around the world. Her interests include information technology, healthcare and private aviation and space travel.
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First Published: Mon, Aug 31 2009. 11 19 PM IST
More Topics: Net World | Esther Dyson | Yahoo | Google | Microsoft |