BUSINESS BLOGS
BUSINESS BLOGS
category: business
17 Mar 2008

The first wave of Web brands died during the Nuclear Winter of 2001-03: Excite, Lycos et al. were all fantastically strong brands and companies in the late 1990s, but they are all nowhere to be seen amongst the digital media elite.  The main argument was that Excite and Lycos - purveyors of the first search engines - all fell in love with portaldom and turned their backs on search.

Search vs. Portaldom

Those who survived, it’s not a coincidence, are those who invested in search: Google, of course, being the leader.  But also Yahoo! (it did invest to acquire Inktomi and Overture, albeit belatedly) and IAC, who plunked down $1.8B for Ask Jeeves.

But 2007-08 is ushering in an era where even some those survivors are not going to make it.

- Yahoo!?  About to be swallowed by MSFT.  It might not disappear, but its future remains uncertain.

- IAC: a mish-mash of brands, maybe, but with Jeeves the butler being kyboshed, it now looks like Ask.com will also be remade as a powered-by-Google search engine.

- Netscape (not a search engine but a browser and portal): AOL pulled the plug on that last year.

Google vs. Yahoo! - How Yahoo! Lost the Web

The Mercury News has a fantastic article on how Yahoo! lost to Google here.  I have covered Yahoo!’s misguided decision to power its search with Google as a catastrophic and ultimately fatal move.

Is YouTube to MySpace what Google was to Yahoo!?

As I was writing this, I wondered, if video is indeed where search was in 2000-02 (depending on who you ask and what metric you use), then could Yahoo!’s decision to use Google akin to how MySpace helped grow YouTube by not blocking YouTube embeds on the massively large social networking site (disclosure: WatchMojo.com provides content to both YouTube and MySpace TV).

In all fairness, that’s an unfair question: MySpace is not really directly competitive to YouTube, they were then complementary services.  Only since MySpace launched MySpace TV did it compete head on with YouTube.  But YouTube has since Day 1 been as much as social networking as it has been about video.  In fact, both MySpace and YouTube remain communities.

So in that context, while MySpace remains the largest social networking site in the world, YouTube’s lead as the largest video file sharing community continues to grow.  Are these two companies diverging or converging?  Is MySpace competing with Facebook (a social network) or YouTube (an entertainment community centered around video)?  Oddly enough, if you ask Facebook, they would say they are competing with Google, and not MySpace.

I wonder, over time, will MySpace’s decision to not block YouTube embeds go down in history the way Yahoo!’s decision to help Google does today?

My guess: probably not: MySpace is part of News Corp. now so its future success is all-but-guaranteed.  I also think that the strategy of the two companies is different enough for both of them to carve out significant pieces of the pie.

But the fact that Google owns YouTube and is partnered with MySpace by way of the massive $900M ad deal is not short in irony.  How so?

Well, Google ended up owning YouTube.  So not only did it trump Yahoo! but it also owns the company that poses a threat to Yahoo!’s supremacy in video advertising.  YouTube generates 1 out of 3 streams online.

But moreover, in owning YouTube and powering ads on MySpace, Google is in fact the ad network most exposed to social media… What is really odd is that with email being the ultimate communications tool and My.Yahoo being the original launch page… this is really a market that Yahoo! should have owned.

As we hear that Yahoo! will enable videos on Flickr, I cannot help but think how badly Yahoo! story has ended (or, I guess, will end). Why the Flickr story is relevant here, frankly, is that Flickr + del.icio.us (another unit of Yahoo!) = YouTube.  See more on that here.
With a few bounces going the other way, Yahoo! could have been Google + MySpace + Facebook + YouTube, but instead, it will be a subsidiary of Microsoft sometime in 2008.

History has a very funny way of unfolding, doesn’t it?

Disclaimer: Long - albeit lighter - on Yahoo!