YNOT – It wasn’t long ago when internet search company Yahoo dominated the online search business. Yahoo was bolstered by its hand-edited directory of websites, while competitors like Alta Vista and Infoseek struggled to return relevant results through automated search technologies. A listing in Yahoo was as good as gold for commercial website developers, and the search giant was the center of almost every online marketing campaign.Then Google showed up.
Google’s arrival on the internet search scene had an immediate impact, and it has been a steady decline for the once-mighty Yahoo ever since.
To be fair, Alexa still ranks Yahoo as the fourth most popular website on the Internet, behind Google, Facebook and YouTube. That’s not bad company. It puts Yahoo ahead of popular sites like Wikipedia, Twitter, MySpace and MSN.
Fourth place is still fourth place, however, and the decline has been a hard pill to swallow for a company that once looked down on all others.
About a year ago, Yahoo hired Carol A. Bartz to take the helm of the company and tackle the daunting task of turning things around. Yahoo had just suffered through a tough patch that involved a failed takeover attempt by Microsoft, and Bartz was well respected for her role is starting the software firm Autodesk. Not only was she trying to pick up the pieces of a company that was being clobbered by aggressive and capable competitors, but she was also operating under the constraints of a massive economic recession.
“We came out of one of the worst climates ever,” Bartz said recently. “And if you look at growth of Fortune 500 companies, only being down 12 or 15 percent is damn good. I’m not going to apologize for our growth.”
Bartz immediately rekindled discussions with Microsoft, and cut a deal that sold off Yahoo’s interest in search in exchange for most of the profits generated by search-related ad sales on Yahoo. Microsoft would shoulder all of the costs of developing and operating Yahoo’s search business, and Yahoo would take 88% of the profits – for the first five years, at least.
Bartz took this approach so Yahoo could focus on content development, an area that the company had done well for many years, and something she saw as a means for Yahoo to compete with Google, Facebook and others.
In the meantime, Yahoo has dropped off the radar for many webmasters and search engine specialists – at best an afterthought, while most marketers keep their eyes locked on Google.
There has been some good news recently for Yahoo. The company just announced it turned a $153 million profit during the fourth quarter of 2009, up from losses of $303 million during that same quarter the prior year. But even that news was tempered by the fact that while profits were up, overall revenue was down by 4%.
It remains to be seen if Yahoo can assert itself once again in the lucrative search market, or if the company has simply conceded second place in search to Microsoft while it tries to reinvent itself with original content and social networking tools. The company did secure a new “default search” deal with Linux-based operating system Ubuntu. That’s a small victory though for a company that is routinely losing similar deals with PC makers who are opting instead to go with Microsoft or Google.
“Our business has positive momentum and we feel good as we head into 2010,” Bartz said in a statement.
But then, what else could she say?
