Tuesday, October 30, 2007

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.


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.


TJGodel said...

I agree with what you idea of what Yahoo should do to play to it's strength by creating widgets for all it's data services. But what if Yahoo widgets and/or APIs encompassed completely Google's forth coming open widget API in addition to it's own specific Yahoo API? I believe this would significantly strengthen Yahoo as a major platform versus Facebook being a narrow social networking platform. What is your opinion?

Yihong Ding said...


Thank you for your questions. Certainly Yahoo is competing with Google. Besides, Yahoo is also competing with Amazon especially if Yahoo really decides to open its APIs. But Yahoo has the potential to be a strong competitor. Remember that Yahoo is still the leading entry-portal on the Web. Although the idea of entry-portal is dying, Yahoo can obtain its new life when it transforms the entry-portal to a platform. Yahoo has the better foundation than almost all of the other web sites.

Yahoo platform needs not be another Google platform. It is just like that Yahoo platform needs not be another Facebook platform. Every company should has its unique view about what kind of platform fits itself the best.

The difference between Yahoo and Google is, however, not so significant as the difference between Yahoo and Facebook. But still, if we look deeper to the core products of these two companies, they are quite different on their data production lines.

The tradition of Yahoo is to have hierarchical, organized data products. From the old Yahoo repository to the current Yahoo portal, you can always find the traces of the Yahoo hierarchy. Google, however, abandoned the hierarchical data production line from the beginning. Google's products are more parallelized. As the result, Google becomes the center hub of multiple flat networks. And Google's platform is basically flat.

Yahoo is different. Because of its previous occupancies, Yahoo may develop the first successful hierarchical platform. By opening its data production line, Yahoo can lead the Web to its internal structure. So when Google expands its platform in the horizontal direction, Yahoo can expand its platform in the vertical direction. By this strategy, Yahoo can both compete and cooperate with other companies, such as Google and Facebook, in the realm of web platform.

I am sorry that these thoughts are not organized. But hopefully they can be somehow helpful to you.

-- Yihong

TJGodel said...

Thanks for the response! Yes you answered my question. If Yahoo opens up it's core products it can't if it adopts OpenSocial as a part of it's overall YahooAPI and maybe it will have an advantage over Google because of it's beginning structure is maybe in a better position to provide structure to the Internet as a whole if enough develops adopt it's API.