About the Microsoft-Yahoo deal, Part 1 ( the chapter of Yahoo)

It is already not a news. But it is worth to thinking of it again.

Microsoft and Yahoo have reached a deal. Despite all the jargons used, the center of the deal is as the follows. Yahoo will hire Microsoft (through the Search Engine Bing) to run the Yahoo search by rewarding Microsoft 12% of its annual searching revenue. In return, Yahoo saves the cost of operating an independent division of Web search.

After the deal was announced, the stock market and the technology blogsphere generally questioned Yahoo's decision. Shares of Yahoo dropped 11% after the deal was announced. Jason Calacanis wrote a thoughtful article criticizing why Yahoo had made another mistake. In general I lean to Jason's main point when the lesson is told to the new startup entrepreneurs. On the other hand, however, I have a few different thoughts on this deal that I believe worth of sharing.

1) Yahoo, not a definite loser but a chance to be reborn

I admire Carol Bartz. She is definitely smart and courageous, probably more than many of us think she is. In Chinese, there is an idiom called 壮士断腕. Translate it straightforwardly: a brave man (or woman) is willing to cut his (or her) own wrist to save himself (or herself). Yes, it is painful or deadly-like to cut the wrist by oneself. If the cut is the only chance to save his (or her) own life, however, a brave man (or woman) will execute the action without a hesitate. Carol Bartz is such a brave woman.

It is pitiful. But the truth is that there have been no other chances left for Yahoo to be able to be reborn by not cutting its own wrist, i.e., the once-glorious Yahoo Search.

In his article, Calacanis made very good points on why the business of Web search was too important and too valuable to abandon. Don't make me wrong. I agree to Jason. The difference between us two is that I believe Yahoo was unable to adopt this suggestion, though in the heart it was very much willing to do so.

Be realistic. Yahoo has already lost the war of Web search. Yes, to admit being a loser is painful. But not to admit the lost is more than stupid. There has been no future for Yahoo in the domain of Web search. Why? A simple reason I have repeatedly talked in this blog: you cannot defeat Google by executing in the Google way! Yahoo is not able to invent a new schema of Web search beyond the framework Google has invented. SearchMonkey and BOSS caused a few buzz. Although being highly expected, time has proved that both the technologies are still too immature to make serious threat to Google. Moreover, for years Yahoo has developed itself a gigantic base of domains to run. Its scale can no longer sustain by keeping itself in this lost-already battlefield. The only future of Yahoo is---cut the wrist to seek for another chance of reborn.

There is a key consequence of this deal that is barely mentioned until now. By giving up the Web search to Microsoft, Yahoo no longer is a Web portal, but to become a pure online data resource producer and possibly a growing major online service producer. This is probably the most critical strategic decision Bartz has made. Why is it important? Three reasons are listed in the following.

a) Commercial Web portal is dying and has no future. By giving up Web search, finally Yahoo can jump out of the illusion to restart a new life.

Ironically, the existence of the Yahoo search consistently pulls Yahoo back to the old age, the age prior to Web 2.0. Yes, in recent years Yahoo search has invented quite a few new technologies. Among the big three (Google, Yahoo, and Microsoft) Yahoo is the one most willing to embrace the new Semantic Web technology. And so on. But all of these changes in Yahoo are tactical in contrast to strategic. The main frame of Yahoo is consistently being a major (or even the) entry point of World Wide Web, which indeed has become nothing but an illusion by the rise of Web 2.0. The sad thing of Yahoo is, however, that the illusion is ineluctable as long as Yahoo search still exists since it has become a company culture despite all the changes happen outside.

Finally, Yahoo search is gone, disappeared, in the wind. Although the link remains, it is now driven by Microsoft. In the other words, even if there were still an entry point to the Web, now it is Microsoft instead of Yahoo that holds the guidance. An old chapter of Yahoo finally ends.

b) By starting a fresh new chapter, Yahoo has great chances to win back its old-time glory.

Don't be confused. Yahoo has never been lack of innovation in new technology. This is a key distinction between Yahoo and some other losers, such as AOL. Jerry Yang is consistently a great visionary, probably often too ahead of the time, however. Yahoo engineers are superior too. The invention of SearchMonkey and BOSS (and many others) continuously proves so. The real problem is as we just discussed, Yahoo is trapped into an unrealistic illusion that may eventually lead itself to nothing but collapse. By cutting the wrist, however, Carol Bartz forces Yahoo to wake up from the illusion. The surgery is so painful that Yahoo can dream no longer. Once it truly wakes up, however, I bet the future of this innovative company.

c) In the new chapter Yahoo may become a great online producer of linked data, and thus eventually leads the technological innovation again.

Producing easy-to-link and feasible-for-search data is becoming a new realm of business. Soon it can grow to be as large as the domain of search or even greater. Linked data, especially when linked data is going to be integrated into the social networks, will release tremendous power on wealth production. Essentially, it will weave scattered individual intelligence into the aggregated engines of intelligent production. Because of human creativity, we may aggregate the linked intelligence in ideally unlimited ways. Therefore, a tremendous force of new-age jobs is assembling. By leaving the lost battlefield of Web search, now Yahoo has a chance to write a fresh new page in history, especially when Yahoo has already been one of the biggest (or probably the biggest) online data resource producer for long time.

From the beginning, Yahoo addresses itself a data producer in contrast to Google positions itself a link producer. This essential difference failed Yahoo in the battle against Google. This same difference, however, may eventually save Yahoo from the lost and re-rise being stronger. I believe Carol Bartz had visioned it and I wish her all the best in the journey she will lead Yahoo into the future.

If Jerry Yang was the father so that Yahoo was born, I wish Carol Bartz be the mother through whom Yahoo would be reborn!

This Microsoft-Yahoo deal is an important moment in the evolution of World Wide Web. In the part 2 and part 3 of the post, I will continue my thoughts on this deal, but on the chapters of the other two companies involved---Microsoft and Google.

The Age of Google (2): Open Sesame

(the previous installment: The Age of Google (1))

It is an old Arabic story. By accident, a poor Arabic young man named Ali Baba overheard a message spoken by a group of thieves---forty in total. From the message, he learned a tremendous amount of treasure hidden in a cave. The magic spell to open the cave was "Open Sesame." Ali Baba thus entered the cave with the secret spell and took some of the treasure home.

World Wide Web is the cave full of treasure. The search engine sites are the magic doors. The user-specified keywords are, however, the "open sesame."

Among all the magic doors, Google is the most marvelous one. Google has standardized the way of ranking online information. Before Google, we had diverse standards to rank the relevancy of information on the Web. Because of Google, the standards converged. This convergence is an important sign about the age of Google.

Subjective ranking vs. Objective ranking

In primary should ranking be subjective or objective? This was (and probably is still) a crucial debate in the realm of Web search. The issue is not only a technological argument but also a business decision.

Technologically, in the time before Google the performance of subjective ranking was generally incomparable to the performance of objective ranking. Yahoo was providing significantly better relevancy in its search results than the other search engines which performed objective ranking methods. Although due to the subjective policy Yahoo's execution expense was higher, its superior quality of search results made the cost worthy.

On the side of business execution, from the beginning Web search was coupled with the online advertising business model. Popularly, Web search engines were selling their first few related search results to certain advertisers; such a policy was once the basis of online advertisement. The subjective ranking search engines apparently executed the policy better than their objective competitors because the former ones selected relevancy subjectively anyway. There was nearly no extra cost for subjective search engines to embed the business model into their framework. On the contrary, the objective search engines might have to execute two policies in parallel to reach both the technological goal and the business goal. Therefore, the overhead of subjectively deploying advertisement reduced the advantage of objective ranking in its low cost of execution.

Google cleverly resolved the dilemma on the side of objective ranking. As the result, objective ranking declared the victory over subjective ranking, at least until the present. (Be note that now the subjective search strategy is striking back. Represented by Mahalo, the subjective search policy is reclaiming its momentum. I will analyze this phenomenon in the following installment of this series when discussing the challenge Google faces.) Another consequence of the resolution is what we all know: the victory clinched Google's championship on Web search over the previous leader Yahoo.

What Google did was actually on two folds. One fold was at the technological side on which Google implemented a brand new objective ranking policy that significantly improved the performance. We will discuss this fold a little bit later in this post.

The other fold was the revision of the online advertising business model. We have known that the previous online advertising business model favored subjective search. Since Google's technology belonged to objective search, the company was trying to discover a new business model that was more compatible to the objective search. Finally, Google invented AdSense and its sister program AdWords. There have been many discussions about the two programs. In fact, at the next installment I will discuss the two programs again. At here, however, the discussion is solely on the impact of the two programs to the combat between the subjective search and the objective search.

AdSense and AdWords reshaped the online advertising business model from the subjective judgments made by the search engines to the objective decisions made by the run-time mapping between search queries and advertising words. Please be note that this change did not indeed have improved the performance of advertising in the sense of technology. It, however, brought two critical improvements for online advertising business: (1) it decreases the unit cost of deploying an advertising word, hence by spending the same amount of money advertisers may now ask for more advertising words associated to their advertisement; and (2) it is implicitly empowered by the effect of the long tail since objective search automatically associates any unpopular deployment of the advertising words to the advertisement.

In order to thoroughly exploring the advantage of objective ranking, Google made another great decision. Google abandoned mixing the search results with advertisers' product links. Google displays all search results in order purely by their objective ranks. By contrast, advertisers' links are laid separately in such as the side bar of the page of the related search results. By this revision of advertisement deployment, Google won the name of integrity and objectiveness on Web search. This fame has been a crucial part of the foundation for Google's business success.

Cluster weighting vs. Link popularity

Another debate of Web search is between ranking by cluster weighting and ranking by link popularity.

In short, ranking by cluster weighting is to classify documents based on the measurement between typed keywords and predefined clusters of information. The implementation of the methodology may be machine learning or the mathematical analysis of vector computation. Ranking by link popularity, however, is to measure the relevancy of documents based on how popular the document is linked in the Web. More popularly linked ones are assigned greater value of relevancy.

Certainly, as many of us know, Google is a supporter of the latter policy. The PageRank algorithm is a famous representative of the thought.

In theory, however, we should expect that cluster weighting must be superior to link popularity on ranking search results. Essentially, cluster weighting methodology directly looks for the content relevancy, while link popularity just indirectly reveals the favorite of relevancy through human activities. In the other words, the truth itself is always more correct than people's vote of the truth. If we can directly reveal the truth, we do not need to rely on the secondary votes to guess the truth.

The problem is, however, whether we are truly able to compute the truth or even if we could, how much the computation would cost. This is where the problem of ranking by cluster weighting is.

The beauty of PageRank is to greatly avoid the complexity of vector computation between search keywords and content keywords. The mentioned computation is very costly in both of run-time execution and off-time optimization requirement. By investing the same amount of money to store and analyze the topological structure of World Wide Web, Google believes that it might gain more reward than investing on cluster weighting computation. Indeed, Google proves itself.

In essence, public voting is probably the most cost-efficient way to approach the truth when the truth is unknown. Public voting does not always reveals the truth. But if the truth is too expensive to be revealed, public voting is what most of the people accept and it generally reveals something that is close to the truth. This is the same philosophy of democracy. So actually Google was excising Web 2.0 implicitly even before Web 2.0. In person, I believe this is an important reason that Google eventually became an early leader of Web 2.0.

But ranking by cluster weighting is not dying. The policy is actually preparing its strong fightback now. Semantic search is the modern mutation of this traditional policy. As many people suggest and expect, semantic search (if it be realized) would certainly outperform the current search executed by Google. But how to reduce the execution cost remains to be a grand challenge. We will discuss more about semantic search in the following installments.

Open Sesame

In summary, Google's "open sesame" is to explicitly execute low-cost objective ranking over implicit, free, subjective ranking (link popularity) performed by regular Web users. This is a model putting "objectiveness" on top of "subjectiveness of the crowd."

However, the business success of this "open sesame" was still not enough for Google to be an age. Google might have been just another successful company if nothing else happened. There is another crucial reason that eventually pushed Google from a successful company to a legend. At the next installment we are going to discuss it.

(The next installment: Web 2.0)

Referenced resources:

• AdSense (Wikipedia)
• AdWords (Wikipedia)
• The Long Tail (Wikipedia)
• Page Rank (Wikipedia)
  

Enough ants may bite an elephant to death

A traditional Chinese idiom says that enough ants may bite an elephant to death (Chinese: 蚁多咬死象). The idiom perfectly describes the strategy beneath Yahoo's newest Web search service---BOSS (Build your Own Search Service). Google is facing the most severe challenge ever in its history.

As we all know, until now Google is likely unbeatable by its dominating power on Web search. Neither Yahoo nor Microsoft, nor even Microhoo, may compete to Google head-to-head. Google is a huge elephant and nobody may even shake it.

Although even a leopard cannot fight an elephant, by raising a huge amount of ants they may bite the elephant to death. Yahoo thinks so, and I agree to it. Google can easily defeat any individual competitor, but Google cannot beat the united force of all competitors. It is the power of collectivity. Brilliant strategy, Yahoo!

On the other hand, however, this action is a double-edged sword. If the ants are so many numbered that they may bite an elephant to death, certainly they can kill a leopard without a question. Therefore, Yahoo search itself might be swapped out of the market even before the decaying of Google search.

A few people may be curious on why Yahoo search might be hurt. Isn't Yahoo that is the service provider of BOSS? If Amazon can make great deal of profit from its public Web service, how could Yahoo's public service eventually hurt itself? To answer this question, we must take a deep look at the difference between Yahoo' service product and Amazon's service product.

Amazon self-produces a large amount of data and makes itself be a huge data center. Amazon Web services allow users accessing and using Amazon's data for varied purposes, including business purposes. To the end, however, Amazon controls the source of data. Hence Amazon have the control over all of its service users.

Now let's turn to Yahoo. Surely Yahoo also produces data, but original data production is the secondary task in Yahoo. Primarily, Yahoo indexes the Web. In contrast to Amazon as a data-resource producer, Yahoo is primarily a link-resource producer. The problem of a link-resource producer is that it actually does not have the power of controlling the linked data. In short, Yahoo knows links, but Yahoo actually does not own the linked data. Because of this reason, any niche search engine may use Yahoo infrastructure to build up a self index of links in its niche domain during the steal mode. After the niche search engine comes to public, it can primarily works on its own index and just using Yahoo infrastructure to be a reference checker. The key point here is that links are normally not the end data users look for.

Does it mean that Yahoo has done a work only hurts others but not benefits itself? Not at all. The key point is that Yahoo must not try to charge the search flow through its opened infrastructure ever after, even if some search flow is for commercial purposes. Be not like Amazon Web services because they are totally different (thought they are similar on surface but completely varied in essence).

Yahoo should make itself be the biggest player over its own free and open search infrastructure in contrast to make itself be the leader of its not totally free and not totally open search infrastructure. Or in other words, Yahoo makes itself to be the largest ant instead of a leopard. If Yahoo can keep on its strategy in this way, Yahoo will have a chance to not only compete to Google, but also defeat Google at the end.

Keep on your great work! Jerry, your passion is truly respectful!


For readers who want to learn more details about BOSS, here are a few resources they can start for looking.

• Read/WriteWeb: Search War: Yahoo! Opens Its Search Engine to Attack Google With An Army of Verticals
  
• Yahoo! Search Blog: BOSS -- The Next Step in our Open Search Ecosystem
  
• Between the Lines: Yahoo’s desperate search times call for open source
  
• VentureBeat: Yahoo opens up its search platform to third parties, Me.dium takes the plunge
  
• GigaOM: Yahoo, Now Offering Search as a Web Service
  
• TechCrunch: Yahoo Radically Opens Web Search With BOSS
  
• zooie’s blog (a BOSS team insider): Yahoo! Boss - An Insider View

The Secret behind Powerset Acquisition

So it has been. Finally, Microsoft and PowerSet reached an agreement of acquisition. It is a deal about $100 Million in total. A question is, however, why does Microsoft acquire Powerset?

I have been at Redmond face-to-face talking with a few Microsoft Live Search top engineers two months before. None of them, however, seemed sympathetic to the coming of Semantic Web. At the same time, however, Microsoft people did emphasize that they expected to walk in a different way from Google because Google is too powerful in its research capability to compete. Does this newest acquisition mean Microsoft suddenly changed its mind and decided to compete Google by adopting Semantic Web? I don't think so. In order to discover the secret behind this acquisition, we may need to look at and think of the following coincidental events related to the acquisition.

1) PowerSet went live to the public only at May 12.

Paul Miller thought "$100million seems like a poor return for those Powerset investors" since the investors have "injected their $12.5million way back in 2006." I agree to Paul's argument based on the assumption that Powerset is a novel semantic search engine full of potential. A question is, however, whether the Powerset approach is indeed full of potential despite of its novelty.

The ones who know the best of the answer to the previous question should be the Powerset investors mentioned by Paul. Especially after Powerset has already been public, its long-term potential must have already been thoughtfully studied by the investors. We can be confident that all of these investors are bright and knowledgeable; and moreover, they are not philanthropists. If all of these analysis are sound, there is only one conclusion we can draw---the potential of Powerset is limited.

Until now, the application domain of Powerset is limited to Wikipedia. As other technology analysts also pointed out, the Wikipedia pages are consistent in their format and there are people dedicating to polishing the English writing of many pages. Powerset's self-limitation of its service only to such a special external site indicates the existence of severe technology difficulty in its approach and it is hard to conquer. I, myself, is a Semantic Web researcher (and particularly on semantic annotation). Thus I very much understand the problem encountered.

With all the concerns, unless Microsoft really thinks of taking Semantic Web as its long-term strategy (which, however, might not be a bad idea), this acquisition is questionable to Microsoft's short-term goal. Hence it becomes confusing---is Microsoft really thinking of going long or going short? Or, maybe, Microsoft plans to take both since it just has too much money.

The investors of Powerset are not foolish, and nor should we assume Mr. Ballmer of Microsoft be so. Then what did Mr. Ballmer think when he made the decision of acquisition?

2) This deal came after the break of Microsoft-Yahoo deal.

By looking for acquiring Yahoo, Microsoft was planning to hit Google in the front. After the attempt failed, Microsoft finally decided to attack Google from the back by acquiring Powerset. This is the real story behind the scene.

Microsoft is looking for the market of online advertisement, everybody knows it. The dominator of the market at present is Google. In order to compete Google, the fastest and also the most effective way for Microsoft is to buy the company in the second place of that market, which is Yahoo. But Yahoo defended insistently to Microsoft's acquisition. Should Mr. Ballmer then abandon the plan? No, or otherwise he must not be the Ballmer. Here thus comes the acquisition of Powerset.

3) Yahoo's SearchMonkey opened up for developers at May 15.

I have said that SearchMonkey is Yahoo's strategy to come back. Although I also predicted negative to the full success of this ambitious project (partial success is however believable), Microsoft has no patience to wait for the natural death of it.

The best way to accelerate the death of SearchMonkey is to defeat the plan directly. By acquiring Powerset, Microsoft may launch a competitive Semantic Web service for SearchMonkey. SearchMonkey itself is already too ambitious. By short of volunteered developers all over the world, the date of its failure thus could be counted. At that moment, Microsoft may go back to the table and buy Yahoo in a much cheaper value. The difference would certainly be greater than $100 million.

4) Google declines to bid for acquiring PowerSet.

In the whole story, Google's situation is quite subtle. From one hand, Google certainly does not expect Microsoft to acquire Yahoo. Hence Google would not be willing to see Microsoft acquiring Powerset.

On the other hand, however, Google does not believe in Semantic Web either. Competing price of Powerset with Microsoft is meaningless for Google. The reason is simple. Neither Microsoft nor Google is really interested in Semantic Web. Microsoft buys a Semantic Web company only to attack Google from the back. If Google attends the competition, Microsoft may just raise the bid and let Google win it. Then Microsoft can simply go for another Semantic Web company. Powerset is surely not the only one who does Semantic Web technology! Google has no chance to win this battle unless it buys all of the Semantic Web companies, which is totally nonsense for its lack of interest in Semantic Web.

I have to say that Microsoft's strategy is very brilliant. The strategy directly hits Google and Google has no effective way to fight back. Now the only pity sacrifice is Yahoo again. But probably it may beg Google to save it once more.

In summary, by acquiring Powerset Microsoft has done an excellent move towards the next acquisition of Yahoo and eventually be closer to beat Google. How would Google and Yahoo take this challenge? The story is to be continued ...

A Swing between Passion and Reality

Is Yahoo dying? A recent post by Michael Arrington has caused fierce debate among readers. Firm supporters such as Jason Kolb agreed that "Yahoo is now a dead company." Optimistic analysts such as Tim O'Reilly disagreed by accusing Michael to be too narrow-minded to having overemphasized the importance of Web search. I believe, however, that Yang's decision about dealing with Google or Microsoft is his tough swing between passion and reality.

Jerry Yang has his passion that has led him found Yahoo and also keeps him on the position of Chief Yahoo at present. Yahoo's mission statement tells the passion being to connect people to their passions, communities, and the world’s knowledge. This is what Yang wants Yahoo to be and he has done all he could to keep Yahoo on this direction. A very recent action on executing the passion is the announcement of SearchMonkey, the center of Yahoo's newest Y!OS effort. Surely, I have argued whether such a Y!OS effort is realistic enough on the basis of the current status of Web evolution. Unquestionably, however, the dream is beautiful and it is worth of trying.

In comparison, what is the passion of Microsoft? Bloody money. Bill Gates steps down and rumors tell that he would never come back to Microsoft administration again. After the leaving of its visionary founder, Microsoft has become a giant machine of money maker and only a money maker. It may not be a bad news for Microsoft stockholders. But it is a bad news for passionate Web innovators.

The deal with Yahoo and Microsoft would sentence the instant death of Yang's passion for the company from the beginning. It is something intolerable for long-sighted visionary leaders. Yang is willing to be the CEO of Yahoo with $1 annual salary because of his passion. Hence he will never allow the passion being a joke, at least not a joke when he still has the controlling power.

The Google-Yahoo deal is a different contract. By this deal, Yahoo reserves its right to continuously look for its dream (though for limited time period) by formally surrendering to Google on the current Web search market.

There are two critical keywords I emphasized in the previous sentence. The first one is surrendering. Michael Arrington has ceaselessly addressed that the difference between Microsoft-Yahoo deal and the Google-Yahoo deal is only the difference between instance death sentence and suspended death sentence, and he does have overemphasize the term "death" but forgotten the meaning of "suspended". To me, the suspended death sentence means more about "surrender" than about "death". By either "surrender" or "suspended", Yahoo still has its chance to come back. By "instance sentence", however, Yahoo will not have any more chances at all.

The second keyword I want to address is current. As I always advocate and I advocate it once again, the Web is evolving and it evolves faster than many of us think. Google may not be the leader of Web search forever. The SearchMonkey and Y!OS are Yahoo's announced strategy to come back. But Yahoo needs time to execute the strategy. The suspended sentence brought by the Google-Yahoo deal provides the time. Though we don't know whether the length of time might be long enough, at least the passion and dream of Yahoo have survived from the instant death at present.

Is Yang's passion unfair to Yahoo's shareholders, especially to Mr. Carl Icahn? In short term, definitely. In long term, we do not know. As I said before, "capital is near-sighted." The lack of short-term profits can easily kill a long-sighted visionary capitalist without a question. Jerry Yang is current taking this pressure. As a peer thinker, I sincerely wish him the best of his luck to be able to survive from the crudeness of capital.

In summary, Jerry Yang is taking a swing between his passion and the crude reality of capitalism. The swing is currently on the side of passion and Yang has done all he could to protect the dream of Yahoo. Be honest, it is also the dream of any free thinkers on the Web. Let's pray for Yahoo and Yang.

Y!OS, a new start of Yahoo?

In the recent Web 2.0 Expo, Yahoo exclaimed an ambitious "open" strategy (or Y!OS or short). Yahoo is going to rewire itself to be a real Web 2.0 company, i.e., a new Web platform (by contrast to a Web portal previously). As a platform, Yahoo will provide users lots of standard services so that ideally all the hidden data that Yahoo holds now will be open to the public. Will this new policy bring Yahoo a new life?

Y!OS, the positive side

The most positive signal delivered by Y!OS is that finally Yahoo understands Web 2.0. Does someone remember when Yahoo bought Flickr? It was March 2005. Three years after the Flickr purchase, Yahoo decides to rewire everything by the Web-2.0 format---a format Yahoo should have already learned from Flickr back to March 2005. But still, this action is a positive sign, isn't it?

Another good news is that we may get free access to the complete Yahoo! Directory, the once most valuable hierarchical online resource repository in the world. Yahoo has spent great amount of money on building, organizing, and maintaining this repository (and I doubt any future organization would spend such a great deal of money on this same goal again). As a researcher on Semantic Web and Web evolution, I rate the value of Yahoo! Directory to be no less than the value of Wikipedia when counting both on prompting the evolution of the Web.

Y!OS promises to provide users much freedom and many social services. Users can design fascinating products based on the Yahoo platform. Comparing to Facebook as a platform and Amazon as an online content provider, the Yahoo platform will be unquestionably larger than Facebook and contains richer data than Amazon. The success of the Facebook platform and the Amazon Web services thus suggest that Y!OS might have a bright future in front.

For readers who want to know more about Y!OS, here is a video that is worth of watching.


Y!OS, the negative side

Will Y!OS finally save Yahoo from its slide in recently years and put Yahoo back to the list of most competitive innovators? Maybe or maybe not. In order to achieve this goal, Yahoo needs to think of the following issues first.

A problem of Yahoo for many years is that the company often tries to design "big" projects that are too big to be well scaled. The original Yahoo! Directory is a typical example. Indexing the Web formally in a hierarchical structure is great, but could it be scaled with the technology at the meantime? In similar, Yahoo must try to avoid the same mistake again with this ambitious Y!OS project.

For example, the size of Yahoo platform will be greater than the size of Facebook platform. To the end, Facebook is only a social networking site. All the services based on Facebook platform are focused on prompting better social networking. This focused theme makes Facebook platform be efficient and effective and the scalability issue could be reasonably controlled. But what is Yahoo platform going to project? Very "broad", this is the only word I can say. Yahoo claims that the company is leading in at least seven major vertical realms. Hence I suppose all these seven vertical realms would certainly be included in the Yahoo platform; and I am quite sure that Yahoo would not just stop at the seven (by its tradition from the beginning Yahoo likes to claim everything). Does Yahoo have a well-designed plan on how to really manage all of these complicated issues of multiple realms and the cross-communication between the realms? The Yahoo platform could be a mess (as if the classic Yahoo! Directory) at the end.

On the other side, the complexity of Yahoo data is much greater than the complexity of Amazon data. Amazon focuses on selling products and hence the majority of its data is well formed and the semantics of data are narrowed in a few fields. In consequence, Amazon is able to process its services in huge scale efficiently. By contrast, Yahoo is originally a generic Web portal and thus it contains a mixture of data in various forms and to highly diverse aspects. This difference means that Yahoo services must be more complex than Amazon services in order to well process the underlying data. Yahoo may accomplish this duty, but unquestionably it is not an easy task to address in short time.

Final Address

By Y!OS, new Yahoo = Facebook + Amazon. This is a great proposal.

But is the project too ambitious to practice in real? We do not have an answer. By the history of the company, however, I feel a little bit pessimistic on the plan. This plan is too huge to be well executed. In comparison, Google's strategy to build individual products solidly one-by-one rather than designing generic open services upon a general platform might be a slow but more effective and convincing approach. But time will tell which strategy would indeed be the better.

Is Microhoo a right movement to the future Web?

A very recent news said that Microsoft wants to buy Yahoo with about $44.6 billion. Although I am recently too busy to blog much, this is a news that I have to say something.

Is Microhoo a right movement to the future Web? This is the question I raise; and my prompt feeling is that this deal, if it ever becomes true, is a bad call.

In short, if Microsoft want to challenge Google in the market of web search, it should look for next-generation search strategies rather than Yahoo. By owning Yahoo Microsoft can immediately get the share of web search that Yahoo occupies at present. But this share is declining. Partial of the declining is due to the bad performance of Yahoo administration; and Microsoft might believe that this problem is the main issue and thus Microsoft can solve this problem. But indeed, from my viewpoint upon web evolution, the decline of Yahoo is due to its fundamental web search strategy that does not match the progress of web evolution. What Yahoo does is always either beyond the trend or behind the trend, and it never hits the right target. By buying such a team would only hurt the future of Microsoft. If this deal would become true, it shows the end of Microsoft search as well.

The Web is evolving rapidly. And very soon completely new thoughts of web search will come to the world to be compatible to the new Web. By buying Yahoo, Microsoft is to buy a huge burden that will soon damage itself in few years.

The Difference between Yahoo and Facebook

Web 2.0 is a web of platform; this is a commonly accepted viewpoint. But what does a platform mean to particular companies? The answers are not necessarily the same.

For example, do the platform of Facebook and the platform of Yahoo (if it would ever be built) mean the same? In a recent report from Bits, a blog hosted by The New York Times, Jerry Yang explained Yahoo's interpretation of platform. "A business that has a set of standards that allows a set of companies to participate and find benefit from it," he said. This is, however, exactly what the Facebook Platform is: "Facebook Platform is a set of APIs and tools that provides a way for external applications to access Facebook content on behalf of Facebook users." So did Yang suggest that every platform was the same?

What is the difference between Yahoo and Facebook? Yahoo produces web resources by itself, while the present Facebook does not. Facebook is only a social playground. Facebook itself produces few unique data but only service functions. Facebook very much relies on user-contributed data to survive. Yahoo is, however, a major web-resource manufacturer. Yahoo produces numerous unique consumable data to the public every day. Yahoo can survive without user-contributed data. But Yahoo can certainly live better when effectively engaged with user-contributed data. This is the difference between Yahoo and Facebook at present.

Facebook knows its strengths and weaknesses. So the strategy of its platform is to be fully open and maximizes user contribution. This policy both facilitates the usage of its main products (services) and minimizes its main shortcomings (lack of data production line by itself).

Yahoo can simply clone this successful policy, as Yang said. But it is a pity if Yahoo would not adjust this policy with its own strength. As we have discussed, Yahoo produces a lot of data. Yahoo could transform its data production line to user-accessible services. By this transformation, Yahoo is not only a social-network platform as Facebook is, but also a data production platform that Facebook is not. Jeff Jarvis suggested that Yahoo should "turn absolutely every — every — piece of Yahoo into a widget any of us could export and use on our own sites." This is what Yahoo really should approach.

Summary

Although the web of a platform is a general concept, individual platforms are different. Every company should design their own unique platform based on their own strengths and weaknesses. Simply cloning others may lead to a tremendous waste of its resources. This case study between Yahoo and Facebook is an example.

Yahoo updated its search

Believe or not, I like Yahoo though many of my discussions about Yahoo are negative so far. It was because of Yahoo that I were able to learn Unite States. I still remember those old days when I explored the Yahoo list of US universities and how much exciting I was. I do love Yahoo.

But I do blame Yahoo a lot too. Yahoo has been just stayed where it was for long time. The Yahoo site is still popular. But the reputation of Yahoo search is ruined indefinitely. I blog about and blame Yahoo because in personal feeling I still love it, though I am now using Google as my default search engine.

My Experiences on New Yahoo! Search

It has been long time not hearing Yahoo search declaring exciting news of its creation. Finally, it seems we got one. Yahoo updates it search engine and brings us some new hope for this classic site.



By typing in my name "Yihong Ding", I got several suggestion of related concepts about this search request. Fortunately (or unfortunately), all of the Yahoo suggested keywords are actually about me. (Sorry, the other "Yihong Ding"s.) For instance, "semantic web", "ontologies", "web evolution", and "Web 2.0". Bingo! All of them are in my expertise areas.

Moreover, Yahoo also suggested "innsbruck, austria". Good enough, this is where I did my internship last summer. The next one is "w. embley", who is my PhD advisor. Weird! Where does his first name go? The rest ones are "semantic annotation" and "rdf". All of them are indeed related to me. Done!

Am I satisfied? Sure, indeed. But how about the other "Yihong Ding"s (not me), are they satisfied? Probably not. Very likely they, if any, will drop off Yahoo for another search engine immediately.

So the problem is that this suggested set is heavily biased. They are only about one particular "Yihong Ding" but not the others. This is an intrinsic problem of the current semantic understanding technologies.

If the semantic technology would succeed at the end, it must overcome the winner-take-all problem. In this world, the general public are unpopular ones and they do not want to see that their existence has been overlooked.

Discussion

To me, the really inspiring contribution this new Yahoo search brings is the philosophy beneath these keyword suggestions, i.e. the idea of "search assist". Presented by Yahoo researchers, search assist is an attempt of changing from what to do to what have done. By leveraging the search history collected by Yahoo servers, Yahoo tries to provide as many suggestions as possible to help users rapidly get their search assignment done. This is definitely a positive progress.

A curious question about this new Yahoo search assist is which direction it is going to pursue. I feel two paths, while one is dangerous and the other is adventurous. The dangerous path is to repeat the fallacy of Yahoo Directory. Eventually, the search assist becomes a tedious human-managed taxonomy. The adventurous path is, however, to upgrade "search assist" to "search assistant". That is, Yahoo should give up the control of search assist. By contrast, Yahoo hands the power of control to individual users and let them hire Yahoo search assistant to search. Yahoo changes its role from a central web search hub to a central search distribution hub. Digital search assistants become Yahoo's employees who work for individual web users.

In summary, new Yahoo Search does bring new hope. Will Yahoo start to go for a new path and avoid being trapped again into the same old problem? We don't know, but I wish Yahoo the best of its future.

Lessons Learned from Yahoo's Mistake

Yahoo was a phenomenon, but no longer. What is its problem? Jeff Jarvis had a fairly good summary about Yahoo's mistake by comparing the declining Yahoo and the rising Google. He pointed out that "Google is a platform. Yahoo is a portal. Google is a network. Yahoo is a destination. Google is a tool. Yahoo is a thing."

Yahoo still follows an old and out-of-date philosophy---controlling web resources and making profit based on the dominating power. Yahoo tries to be a portal, through which normal web users can access the public web. Yahoo at present is still trying to win back its dominating position of being the leading portal that web users can get best information from the Web only if they pass through the gate of Yahoo. Unfortunately, however, this dream is out of date.

In short, portals are out of date. This claim is, however, not the same as Jeff's "portals are dead." Out-of-date at here means that constructing portals is hardly still a good way to make money. For non-profit purposes, however, building portals certainly remains being a simple and convenient solution.

Portals are out of date because they are "destinations" and "things" rather than "networks" and "tools." By being either destination or thing, a portal is a site that is independent to users' participation. For example, Yahoo plays like a dictating nanny who believe that she could fully represent all the babies. As an web-entry portal, Yahoo answers user requests and barely facilitating mutual information exchange between information requesters and providers. This is a standard Web-1.0 style of design.

With emergence of Web 2.0, Google has started changing its role from a traditional web-entry portal to a central hub at a distributional network. Google continuously provides new services to allow web users building their own sites and facilitating information exchange among these sites. As the result, Google develops a network of Google users. The ones who join this network automatically make Google to be the central hub due to that Google is the service provider, but not because Google is the gate to the public web. This role change makes Google be more user-friendly. In users' eye, Google is not a dictating nanny, but a kind big brother. Users are happy to join and share information using this friendly network. This is a typical Web-2.0 style of strategy.

Old institutions die hard. Certainly Yahoo is still one of the leading web companies at present. But if its basic strategy about who it is would not be upgraded soon, its leading position is going to be shaken greater and greater. Using an old Chinese idiom, a big bug with one-hundred legs must not die soon. Unless something deadly happens inside its body, one can hardly kill such a bug in real. This strategic mistake, however, is a deadly internal reason to Yahoo.

Yahoo! had a new CEO. Can Jerry Yang lead the company to a new level?

A very recent news, Jerry Yang has replaced Terry Semel to be Yahoo's CEO. Though Yahoo! had survived from the dot-com bust under the lead of Semel, its influence declines conspicuously in recent years accompanied by the rise of Google. Can the crowning of Yang slow down or even reverse the decline of Yahoo? It is hard to tell at this moment. But one thing is for sure---Yang will have a long to-do list to accomplish. In a recent survey, up to now (people still can vote at this moment) 44% of people believed that Yang might not be the right choice for Yahoo CEO; in contrast to that only 22% voted yes.

Indeed, I don't think that the fate of the battle between Yahoo and Google will be any difference only if Yahoo has gotten a new CEO, even if this one is Jerry Yang. Personally, I have great respect to Yang for his great vision of founding such a great company (Yahoo) in history. But the once glory of Yahoo has gone with the rise of Google. Yahoo had once established a new model of web search. But Google perfected this model to its ultimate. Once upon a time, Google was a little follower of Yahoo. Except of the PageRank algorithm, Google followed everything Yahoo had invented. But now, many evidences show that Yahoo is following Google. Google has invented so many great applications by facilitating searched web resources. It is even difficult for Yahoo to follow up; let it alone beating the ambitious Google. At present, the opponent of Google is no longer Yahoo, it is Microsoft.

In the second part of my web evolution article, I have presented a brief study of the rise of Google, as well as the decline of Yahoo. Along with several of my previous posts, I believed that the future of Yahoo is lay on a complete new vision of web search. I doubt anybody could beat against Google any more underlying this traditional web search model. Google has executed it too well. And this traditional web search model allows the winner taking all the shares eventually. Yahoo must figure out a new solution, an alternative solution. Otherwise, Novell's present would be Yahoo's future. Novell was once a company leading the world in the network realm, and it had the power to decide the fate of others. But now Novell becomes barely more than a normal middle-size company that is struggling its own survival among the big brothers (once he was one of them).

Can Yang again lead Yahoo to a new route as he had done several years before? Can my vision of web evolution be realized by Yahoo? Best wishes to Yang and Yahoo!

New web battle is announced

(updated Dec. 21, 2007)

Google enters deeper and deeper into the realm of Microsoft. Yesterday at Web 2.0 Expo, Eric Schmidt was interviewed by John Battelle. During the interview, Eric announced a new launched presentation feature for Docs & Spreadsheets. Together with the previously released Google Apps, Google is now right on the track to fight against Microsoft, another great battle since Google versus Yahoo. In common, in both of the battles Google is the challenger.

The battle between Google and Yahoo was thought as a search-engine war; and many current observers watch the coming battle between Google and Microsoft as a word-processing war. These beliefs are, however, nearsighted. In fact, both of the battles are consequences of web evolution. They are about one issue: whether we want to leverage producing new quality resources or to supplement methods of operating old quality resources. Let's take the Google-Yahoo battle as the example to explain this viewpoint. In this battle, Google represented the leveraging of new-quality resources and Yahoo represented the supplementing of old quality resources.



One thing we have to clarify before approaching. The reason that Yahoo lose the battle to Google was not completely due to the PageRank algorithm. The PageRank algorithm had helped Google grow to be Yahoo-scale and it helped Google declare the war to Yahoo. But Yahoo was not defeated by this algorithm. By contrast, it was the rise of Web 2.0 that finally defeated Yahoo and prompted the rise of Google.

Web 2.0 provides a new collaborative solution to operate web resources. Consequently, it demands new quality resources that can further leverage its ability of collaboration. This is the pattern: collaborative methods ---> collaboration-friendly resources ---> more collaboration-friendly resources. Google caught this trend and led the revolution of producing new quality resources, such as GMail, Google Map, Google Earth, Google Apps, etc. These products not only provide old-style services (such as supporting emails or map search), but also enable users to collaboratively customize the services into their own frameworks. As the result, by using these products people produce more new-quality collaboration-friendly resources, which could be hardly produced (and thus used) on the pre-2.0 Web. At the meantime, Yahoo, however, still aimed to facilitate its old production line to prompt the production of old quality (generally collaboration-unfriendly) resources. It is this difference that caused the inevitable decline of Yahoo.

Will the history repeat itself again? Will Microsoft repeat the failure of Yahoo in this new battle? Maybe. This new battle is on the realm of word-processing, but indeed it is again about web evolution. They are about whether we will produce more new quality (Web-2.0 quality) documents or produce more old quality (Web-1.0 quality) documents. Web-2.0 quality documents can be easily shared, edited, and collaboratively edited on the web, as Google is projecting. Web-1.0 quality documents, however, are continuing being edited offline primarily. Though we may augment these Web-1.0 documents with the ability of online sharing, as Microsoft is proposing, collaborative editing is certainly more difficult to be implemented if the developers still want to preserve its fundamental functions on the offline side. Since Microsoft has already invested so much on its Office product and been succeeded so far, it is really difficult for Microsoft to start over again in another path that directly competes to one of its most successful and profitable products. As a result, Google will win the battle again.

But there is a problem Google needs to be aware. In yesterday's San Francisco Chronicle, Dan Fost wrote another article about this interview. In the article, there was an interesting paragraph.

The main problem with the Google approach, as Forrester Research analyst Josh Bernoff pointed out just before the speech, is "if you're on an airplane or anywhere else where you have no connection, it doesn't work. They need to make it like Outlook, where you can compose offline and then when you get online, it syncs up."

Online or offline, is it a critical issue? In fact, several others have already pointed out: after some point of time, there will be no offline unless someone particularly wants to be. Though apparently at this moment we still may encounter the offline problem, it is indeed not a critical issue for a long term.

By contrast, another side of this online or offline problem is much more critical than the problem itself. On the web, online means being public, while offline means being private. No matter how much we have advanced our Internet security protection techniques, offline is always the ultimate solution to protect privacy. In the other words, less online always means greater secure. Online applications will never completely replace offline applications since we always have something that is needed to be private, i.e. will not be shared with others. This is why Google must provide not only online resolutions, but also offline alternatives at the same time so as to maintain a private space for end-users.