11 April 2008

Yahoo, slow death of a portal?

Microsoft's increasingly aggressive stance on its Yahoo bid looks certain to be bolstered by recent figures on Yahoo’s overall performance as a search vehicle.

According to SearchEnginewatch nearly 10 billion "core" searches were conducted in the US in February, accounting for a 6 percent decline from January search activity.

Altogether search queries were down at all the major search engines. Google serving 5.9 billion search queries, down 5 percent from January. In February, Google's share of searches was 59.2 percent, up from 58.5 percent.

Yahoo's search share slipped from 22.2 percent in January to 21.6 percent in February. Overall, it served 2.1 billion searches, down 8 percent from the previous month.

In March, much the same scenario has also been played out over at Hitwise, whose measures have Google owning around 67.25 percent of all US searches for March. Yahoo! Search, MSN Search and Ask.com each receiving 20.29, 5.25 and 4.09 percent respectively.

In 2007 Hitwise had Yahoo with 21.26% of all searches and the year before that 22.30%. It represents not only a continuing rout by Google but also plays into suggestions that Yahoo’s market position is being eroded.

In Australia, the Yahoo7 alliance has been criticised for its inability to find focus with advertisers increasingly shunning the joint venture (See DIFFUSIONblog 23/10/07) and relegating it to a second tier advertising status.

In February Nielsen//NetRatings Yahoo!7 in third place in the market with 5 million unique users, though this figure is an aggregate and does not represent search only. It cites its recent content deals with Bebo and Disney as proof that its a real challenger to Google.

The Australian operations focus seems to be on stretching the width of advertising, rather than increase the range of opportunities for users and increasingly gain traction from engagement with the brand. In a mature market such as Australia, where Neilsen claims internet usage has peaked at 80%, the effort may go unrewarded and probably unrecognised.

This scenario is mirrored in almost all aspects of Yahoo’s attempts to rescuscitate its ailing brand.

The simple fact, as the statistics show, its market relevance with users and with advertisers is declining. From a content, usability and experience side, Yahoo now does little to differentiate itself from its competitors. Its competitors, particularly MSN, do nothing more than mimic the same.

Portals, like Yahoo, and before that Excite, Lycos and AltaVista (remember these!) all experienced year-on-year declining relevance and consequently market share as their brands no longer provided users with differentiating content and experience. It wasn’t about building advertising platforms, it was as Google worked out, about building a brand that delivered differentiating and innovative content and usability for users.

I'll let the statistics speak for themselves. According to SearchEngineWatch in 2001 Yahoo was the top search engine, referred the most traffic to web sites in the US, accounting for more than 38% percent of search referrals with MSN 15.9 percent, the nascent Google 11.3 percent and AOL 7.8 percent. Internationally, Yahoo referred 41.5 percent of all traffic, followed by Google at 13.9 percent, MSN 12.9 percent and AOL 5.4 percent.

As everyone knows, its a numbers game. And the numbers are real.