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The Truth of Yahoo, Google and IT Enabled Services

This Yahoo internal document by Brad Garlinghouse, a Yahoo senior vice president, is a tremendous read

This Yahoo internal document by Brad Garlinghouse (a Yahoo senior vice president) is a tremendous read. Brad started by stating his love for Yahoo, for example:

I proudly bleed purple and, yellow everyday! And like so many people here, I love this company

Then he bluntly outlines the big problems he sees at Yahoo, and "I believe we must embrace our problems and challenges and that we must take decisive action".  The problems he outlined are:

  1. Yahoo lacks a focused, cohesive vision
  2. Yahoo lacks clarity of ownership and accountability
  3. Yahoo lacks decisiveness

Through the entire document, despite some harsh and blunt criticism, you can feel the passion Brad has for Yahoo, the opportunity in front of Yahoo and anxiety to seize the opportunities instead of continuing on the current slipper slope.

I definitely agree with a lot of points being raised in the document - from an outsider perspective. For quite a while, I have been wondering about Yahoo. Over the years, it has lost its edge as a company - even its CEO probably does not know what is Yahoo anymore. Yahoo started as a web portal company. What is Yahoo today? A media company? A web asset aggregator? Or what? Where is Yahoo going to be going forward? Is Yahoo capable of addressing these problems and become the leading visionary for the web again?

In contrast, Google started as a search company. For years, Google singularly focused on search and outperformed everybody else in the "search" business. They are so successful that the phrase "Google" became synonymous with "search" now.

But what is Google today and where is Google going to be in the future?

I have no idea of what Google is going to be in the future and will not embarrass myself to predict it. As far as for today, I don't think Google is a "search" company anymore. I believe Google is an Ad service company today and will stay as an Ad service company at least for a while.

Yes, Google does search better than anybody else. However, the key for Google's success is not search. It is Google's Ad service. This Ad service is distinctly different from Ad services we have seen before. It is enabled and powered by sophisticated information technology and tremendous operations facility and expertise to run IT systems. 

"Search" has been the "IT" for enabling Ad at Google, but it is not the only information technology anymore. Today, you see tons of projects coming out of Google, most of which are not related to search. The famous ones are Gmail, Google Video, YouTube, Google App For You Domain, Google Docs and Spreadsheet...All of these, and the hundreds of other Google Lab projects, are enabling technologies for Google's Ad service.

Google's official statement says that Google wants to "organize the world's information and make it universally accessible and useful".  I really do not think so. I think Google's goal is not to organize the world's information, but rather to be the "IT-enabled Ad service platform" company that dominates the new generation of advertisement.

A final thought is about IT enabled services - an area where the future belongs.

Traditionally, we start companies by building and selling technology. With growth of the web has given us a lot more and better options. Instead of selling the technology, sell services. If you believe in your technology, sell the services that are enabled by your technology.  If you do have great technology, you should be able to create great services that your technology becomes the secret sauce behind your services. If Google focused on selling its "search" technology - which it is packaged as software or appliance (which BTW, I heard Google Search Appliance is a disaster from various customers), Google would never have been as successful as it is today.  

Jeremy Geelan posed the question of "What's ahead of us in 2007" in one of his emails recently - I believe IT Enable Services is going to fly high in 2007. As a result, we will see:
  1. A lot more venture capital investments into IT Enabled Services;
  2. Of course, a lot of startup activities in IT enabled services (new company creation, merger and acquisition)
  3. There will be some significant moves made by "traditional, big companies" into IT enabled services too. For example, some of the possibilities are:
    • Massive reality shows on the web, instead of being on TV. Can you imagine American Idol on the web? Speaking of this, I think highly of Yahoo's initiative into this area, including its recently acquisition of Bix.
    • A major entertainment company (NBC, ABC, etc) fully embracing web TV

Enjoy Web 2.0!

More Stories By Coach Wei

Coach Wei is founder and CEO of Yottaa, a web performance optimization company. He is also founder and Chairman of Nexaweb, an enterprise application modernization software company. Coding, running, magic, robot, big data, speed...are among his favorite list of things (not necessarily in that order. His coding capability is really at PowerPoint level right now). Caffeine, doing something entrepreneurial and getting out of sleeping are three reasons that he gets up in the morning and gets really excited.

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