A month ago, you would be hard pressed to find an author who dared criticize Google and say anything positive about Yahoo! The former was about to put [insert any company and industry here] out of business and the latter could not do anything right.
Today, a mere month later and with nothing material having taken place, people are starting to question Google’s Midas touch and praising Yahoo!
Earlier this week Google announced that it was shutting down its Answers product, and many were quick to point out that Google Answers was far less popular than Yahoo!’s answers. Of course, neither product had much impact to their respective company’s bottom line. The symbolic thereof was what wsa important: Yahoo! could beat Google at something, and Google was not invincible.
Today TheStreet.com’s Vinesh Kumar also points out that much like Google Answers, Google’s Finance product offering is getting beaten by Yahoo! by its Finance product:
But Google Finance has failed to make a dent so far. Yahoo! Finance had 13.7 million users in October, about 24 times more than Google’s 579,000, according to the research firm Nielsen Net Ratings. And users also tend to spend 28 minutes on Yahoo! Finance — nearly twice as much time as users of Google Finance.
Kumas goes out to correctly point out that when it comes to content plays, Google is an engineering powerhouse but fails to package content in a way that engages users: hence the problem with Answers and Finance. Although, Answers’ problem was that Google wanted answer-seekers to pay those doing the research and answering; since when do people pay for things online?
Meanwhile, Yahoo! simply allowed a platform for people to answer others’ questions. Yes, that comes with a double edged sword because there is no guarantee that the answers are accurate and reliable.
Nonetheless, this entire issue does shed a problem on Google and overall trend we are seeing of placing so much premium on automation, technology-alone strategies. Business has always, in the long run, rewarded solutions that integrate a human touch with technology’s benefits.
What we are seeing in the Google vs. Yahoo! is the latest manifestation of that. When there is a regression to the mean, Googlers will realize that bragging too much about automation is not necessarily beneficial. As everyone in the universe has pointed out, Google makes 99.9% of its revenue from Ad Sense text ads because its mustered an effective monetization strategy. It’s also highly profitable because its automation of services help it drive a lot of top line revenue to the bottom line.
But if it chooses to diversify away from a pure search income statement, then it needs to understand that a computer, no matter how smart and fast cannot possible package content the way a human being can.
I was speaking to a fellow Googler about some ideas for an initiative we are working together and it was clear that as much as each individual Googler has a desire to work with partners, they know that only ideas that have instant automation and maximum scaleability will fly. The problem is that most great ideas in media (and many in technology too) do not necessarily fit in those categories.
Mark my words: Google is passing up some of the best ideas and potential areas of growth and diversification because it fails to let go of its automation is king, technology is the sole solution to everything mantra. It might not hurt it per se, but the opportunities it lets slide will not help it maintain its lead over the long term.
Other nimbler, more flexible companies will continue to beat it in niche categories and Google will content itself to acquire those over time… but that in itself will only add to their long term problem, not solve it.
Disclosure: Long YHOO!
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