The Business Blog at Intuitive.com

Dave Taylor has been involved with the online world since 1980 and is recognized globally as an expert on both technical and business issues. He has been published over a thousand times, launched four Internet-related startup companies, has written twenty business and technical books and holds both an MBA and MS Ed. He's a columnist for the Boulder Daily Camera and Linux Journal and frequently appears in other publications both online and in print. Additionally, Dave maintains four weblogs: The Business Blog at Intuitive.com, Ask Dave Taylor, Dave On Film, and GoFatherhood. Based in beautiful Boulder, Colorado, Dave is an award-winning speaker, sought after conference and workshop participant and frequent guest on radio and podcast programs, as well as active member of his community and busy single father to three children.

What do Yahoo, Apple and Ferrari have in common?

The blogosphere is abuzz about the quote from Yahoo's CFO Susan Decker to Bloomberg News (as run in The Seattle Post-Intelligencer) about Yahoo! search and Google. First, here's her exact quote:

"We don't think it's reasonable to assume we're going to gain a lot of share from Google," Chief Financial Officer Susan Decker said in an interview. "It's not our goal to be No. 1 in Internet search. We would be very happy to maintain our market share."

It's no surprise that not only are industry analysts misinterpreting this quote, but so are lots of bloggers too. Steve Rubel is probably getting the most visibility with his colorful comment that "Yahoo cedes search to Google and so do I", but a quick glance at memeorandum shows that this is just the beginning of the misinterpretation and cloudy thinking...

Here are some headlines to consider: Yahoo quits?, Yahoo gives up?, Yahoo content to be Google's footstool and Yahoo gives up race with Google.

As someone who has tracked the industry views on Apple Computer for years, I'm familiar with this particularly American thinking, of what I call "Win or Die."

For well over a decade, analysts, pundits, critics and clueless twits alike have been writing about how if Apple can't achieve the position of top selling personal computer vendor, it's destined for a slow, lingering death and irrelevance. You've been reading these op-ed pieces for years too, in publications like The Financial Times, Wall Street Journal and Fortune. Lots of bloggers continue to beat that staccato drumbeat of "#1 or death" too, particularly with Apple and the Macintosh.

But those of us who actually can see beyond this myopic thinking have long since realized that being a specialty vendor, differentiating from the broad world of commodity, sell-more-or-concede, is actually the best and smartest strategy of all.

That's the Ferrari Solution: don't sell the most, sell the best. I mean, think about it, why on Earth would Ferrari want to sell more cars than Honda or Toyota? It'd just give them distribution headaches, maintenance problems, and, most of all, dilute the brand to where it wasn't exclusive, wasn't a sign of success, of being above the hoi polloi.

Apple's in the same space and has done a brilliant job of, yes, being "the computer for the rest of us" who really don't want to spend hours each week worrying about viruses, spyware, and shoddy software but instead want to focus on what we're trying to accomplish, be it graphics, design, architecture, photography, or print layout.

When I read Yahoo CFO Susan Decker's comment on Yahoo's strategic direction for its search group, I do not see anything being conceded or Yahoo giving up or being "Google's footstool" (for goodness sake!) but rather a company that is being smart and sharing that it has a very specific strategic direction and is traveling towards that, not blindly competing to be #1 in the search space by traffic.

After all, companies like Dunn & Bradstreet aren't upset that they're not the search company you think of when you want to find a local pizzeria, so why is everyone thinking that Yahoo's going to crumble and be an also-ran because it doesn't want to be all things to all customers?

Even the inimitable Robert Scoble's missing this one, when he says: "I really don't care about search market share. If I did I would have bet on Alta Vista. I didn't. I went with Google because Google had better search. Tomorrow? I guess Yahoo isn't confident."

I don't think it's a confidence issue at all. I think it's everyone succumbing to the win or die! perspective. Yahoo doesn't have to be #1 to be a darn successful search system and extremely useful and valuable to the Internet at large.

It's a bit too soon to write Yahoo off, that's for sure. Let's watch the Yahoo Search Blog to see how they respond, though, shall we?

Posted by Dave Taylor at January 24, 2006 10:12 AM

Comments

I agree. Recent news accounts detailing Yahoo's "social media" focus cause me to bank on Yahoo excelling in many more significant areas.

Posted by: Daniel Perry on January 24, 2006 11:12 AM

Three points --

1) If you assume the definition of "search" remains constant - sure, Google out-guns Yahoo and Yahoo would be doing well to maintain market share. Susan Decker's comment [therefore] is spot on. But in the basement of this organization, Yahoo! architects are busy working to address the moving target of information discovery. You can see examples breaking the surface from time-to-time if you look closely - the future of search is *no* search at all.

2) In the lofts of Yahoo!, management understands the difference between a blue ocean and a red (or bloody) ocean. As you point out Dave - Yahoo! is very good at creating unique differentiators, but I think it's more than that - they are sailing for a blue ocean (see 'Blue Ocean Strategies' by Kim & Mauborgne); the course was set long ago and if they're right about the eventual replacement of 'search' as we know it, they will make their competition irrelevant.

3) Google is sailing on a slightly different course - perhaps tilting in ways that attempt to redefine the definition of the "desktop experience". This is much bigger than focusing on information discovery problems. Indeed, the day will come when Yahoo and Google interoperate. ;-)

-- bf

Posted by: Bill French on January 24, 2006 3:30 PM

I agree with your distinction between volume and value. But if Yahoo's not out to be number 1 in Internet search, I think they need to make it more clear what they DO stand for. I found this in their "Company Info" links. (Visit: brand.yahoo.com) - Very "Blue Ocean", but I'd never have guessed it from their T.V. spots and banner campaigns.

At the same time (and this may just be the clueless twit in me), I think Susan Decker's statements do sound concessionary. You don't hear Ferarri saying things like, "Well, we're okay with Hyundai selling more cars than us." They don't need to.

From a brand perspective, Yahoo's got a long road ahead before they can fulfill their mission of becoming "the most essential global Internet service for consumers and businesses." Right now they sound a little like the guy who came in second at the Tour De France. What was his name? Hold on I'll Google it...

Posted by: Mark Bixby on January 24, 2006 4:15 PM

Am i the only one who feels that this whole episode has been blown out of proportion. Geez... it's probably a defensive move to put their competitors' guards down and strike them hard once their social network has reached production level.

Posted by: theCreator on January 25, 2006 1:29 AM

Here's the response on Yahoo! Search blog:
http://www.ysearchblog.com/archives/000239.html

Posted by: Constantin Basturea on January 25, 2006 2:51 AM

I don't think Yahoo's out to a niche player like Ferrari. They are a giant. Search is vital to them. They've said this all along. My point is that simply to maintain marketshare will require continued innovation and excitement on that front. The quickest way to lose marketshare is to set out a strategy simply to remain #2.

The question is whether the rest of Yahoo's strategy, much of it based on community connections, compensates for this setback in search.

Posted by: steve baker on January 25, 2006 5:54 AM

To your list of things we Mac users are trying to accomplish, I would add "programming, system administration, content management, and business accounting." Your list focused on what lots of people still mistakenly assume is all that Mac is good at - creative applications. Today's Mac isn't just a fast car for the creative class. It gets the job done quickly and elegantly for us business and techie types, too.

Posted by: Dan McComb on January 25, 2006 3:51 PM

Yahoo!'s comments underline the difficulties any Internet company faces in trying to challenge Google's dominance of the Web search industry. Google has at least double the market share of Yahoo! and Microsoft Corp. in Internet search, the largest and most profitable segment of online advertising.

Posted by: Michle on May 24, 2006 7:24 AM

I wrote a little bit more about how Apple and Ferrari are alike. They truly are my two favorite companies and both have really pushed their industries towards advancement.

check it out: http://www.rikinontheweb.com/apple-ferrari-finding-inspiration-everywhere

Thanks for such a great post!

Posted by: Rikin on January 22, 2009 9:50 PM

It´s clear that if you sell the best products available you have a position of privilege in the market.

Posted by: Mike on June 20, 2009 6:10 PM

How things have changed for Apple since this blog post was written. With the iphone, ipod, and ipad their market share has grown enormously over the past few years.

Posted by: James Lee on July 26, 2010 6:11 PM

Before you leave a comment, a tip: If you're interested in blogging, you should sign up for my Blogsmart News so you can stay up to date on the latest insider tips and ideas for your Internet business and marketing efforts. Sign up right now and you'll get a free copy of my "Insider's Guide to Blogging" ebook too!