Don't mention the G word

Despite launching new innovations, Yahoo! faces an uphill task in cutting through the Google hype. Jane Perrone explains

Thursday August 25, 2005

I was at Yahoo! headquarters in Sunnyvale, California when Google fired two new salvos in the battle for web domination this week - a new version of Google desktop search, and Google Talk, an answer to its rivals' instant messaging services.

Mentioning the G word did make Yahoo!'s PRs wince, but it illustrated how the Google brand still has a cachet Yahoo! doesn't seem to be able to match.

Yahoo! faces a difficult job in cutting through the Google hype prevading the search industry. Some of the shine is starting to rub off Sergey Brin and Larry Page's baby, though - not least as a result of widespread cynicism over the firm's latest share offering and its one-year ban on talking to journalists from tech news site CNet after an article it objected to.

No doubt the press trip I was part of - which brought journalists from the UK, Germany and Australia to the Yahoo! "campus" to talk to senior staff about the company's plans to advance its search capabilities - is part of the strategy to break through the white noise of Google's domination.

The core message repeated by all the Yahoo! executives I met was "ignore the branding, look at the quality", and there was much talk of how blind independent tests had given Yahoo! a lead - albeit slight - in the relevance and accuracy of its search results, for example.

Despite its dominance as a brand, Google is still playing catch-up with its rivals as it continues to transform into a portal rather than focusing single-mindedly on search: desktop search and instant messaging are both areas already long colonised by Yahoo!, as company spokeswoman Terrell Karlsten was keen to emphasise.

"We've been in this [instant messaging] business for over seven years now, and through YM client we offer a comprehensive real time communication experience", she told me.

She also said Yahoo! was an "active advocate" of allowing users to communicate with people using other instant messaging services - something Google Talk already offers - provided users' security was not affected. However, this isn't something Yahoo! offers to customers at the moment.

Although Google's two most recent announcements are not insignificant, they don't have the "this is going to keep me awake at night" feel of the April 1 2004 launch of Gmail, which represented a quantum leap forward in the field of free email.

But as analyst Greg Sterling, of the Kelsey Group, told the San Jose Mercury News on Wednesday: "It's significant for Google because it's been a gap in their offering. As they increasingly take on the mantle of a portal, it's natural for them."

The spotlight has swung back to Google in the wake of its latest launches - but if you miss the unveiling of one new feature in the constantly innovating world of search, you can always be sure another one will be along soon, whether it's the launch of a new innovation or a "catch-up" product that attempts to keep pace with the competition by matching its offerings.

One example of the latter is the Yahoo! Publisher network, currently being beta tested in the US. It's due to roll out internationally early next year as a direct challenge to Google's Adsense, offering small publishers, niche sites and blogs the chance to buy their own advertising and make revenue from placing ads for other sites on their own pages.

One of the most interesting innovations coming from Yahoo! in the next few months is likely to be the social search services it is currently beta testing in the form of MyWeb 2.0, a service allowing you to create a network of trusted contacts with whom you can share sites and recommendations, be it your favourite restaurant or the best night schools for studying Italian.

It will be interesting to see whether MyWeb can assist Yahoo! in reaching its goal of becoming the number one in search. As John Marcom, the senior vice president of Yahoo! International, put it: "My management doesn't really like it when I say we want to be number four in things."

The $64,000 question is whether it will ever manage to displace Google as the default search engine in the mind of the web user. And that's one question you can't find the answer to by Googling (or should that be Yahooing?) it.