Why Yahoo was right to hold out (and Google has it wrong)

In the last few weeks there has been many articles about Yahoo, that they are unfocused, and should have sold to Microsoft, but in one area they are the leaders and are killing Google. Don’t get me wrong here, I love Googles stuff in general but on the mobile phone, they suck!

First let me explain why this is a big deal. There is a growing tendency for people to access the web via their mobile and all the big players in the search market want a slice of the action. Why is this of interest to them? Simply because of the numbers involved. There are about 850 million PC’s out there at the moment where search engines can make their money, but 2.7 billion mobile phones. That is more than 3 times the number of phones than PC’s.

Think about it in terms of market share, at the moment Google has 60% of the PC market say, but if you add mobiles into the mix, that would be just a 14% share of the total available market. If someone moves into that mobile space, Google could be sidelined!

Okay, so having said that, where are they going to make their money? Ads are the obvious answer, and to a large extent an ad served to a mobile is even more compelling than those served on a PC search. The advantage of mobile is that they know where you are, so can send you ads that may not relate to the search, but more to your location? Maybe you can resist that coffee now, but could you if you were given 20% discount from the place you are just passing?

So what do Yahoo do so write that Google do wrong? They look at intent rather than just content.

If you do a search on Google mobile, you will be returned almost exactly the same results as you will be on their desktop browser. If you look at Yahoo though you get their top 3 normal web links, and their top 3 mobile web links. You can chose to navigate to more normal or more mobile links from there.

At this point you can see there is a fundamental difference between the two approaches. My guess is that Google is expecting that you would use an iPhone or similar which has full browsing capabilities, however this is missing the point. If you are out on the road somewhere, navigating with one hand you need content and design to suit that requirement.

As an example I live in Brisbane Australia and often travel into the city by train. If I search on Google for Brisbane Train Times using my Sony K800i, or my iPod Touch I get a list of full websites that often to be honest don’t give me what I want, train times quickly and in a form factor convenient form. However go to Yahoo and do the same and you get the local council version, and a mobile specific train times program, which gives me just what I want. This shows that Yahoo is looking at the intent of mobile browsing, and is inherently more usable.

On the iPod Touch I can obviously navigate full website with not too much effort, but the different is still astonishing. Try looking at http://www.qr.com.au and http://www.tad.tw and you can see for yourself.

The end result is that on my mobile I use Yahoo, and on my Mac I use Google. If this were to replicate through the mobile space with the positions of Yahoo and Google reversed on the different platforms, where would things sit? Google would end up with 29.6% of the market, and Yahoo with 50.4%*. Even if only half of the people used the mobile web Yahoo would still overtake Google in the total search market.

In short, Yahoo was right to hold off on Microsoft. If they can maintain their focus on the mobile market, in 2 or 3 years we could all be buying their stock.

* Figures are based on 60% of the 850 million PC using Google, and 20% using Yahoo. One the mobile 60% using Yahoo and 20% using Google.

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