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Who's the BOSS? Yahoo searches for a way to unseat Google

July 9, 2008 |  9:00 pm

Yahoo today unveiled a plan to encourage software developers to build on its search technology and allow websites to use that technology in a bid to gain ground on Google, even as Yahoo prepares to enter an online advertising partnership with the search market leader.Yang3

The plan, called BOSS (as in "build your own search service"), is part of Yahoo’s broader agenda to become more open and move away from its roots as a traditional portal that seeks to keep users captive by offering them news, e-mail and other features all in one spot.

Yahoo search executives say allowing companies access to its powerful search engine will spur innovation and extend Yahoo’s reach on the Web as it powers more searches and collects a split of the revenue from advertising that accompanies those results.

"It’s a move we are making as a principal in search that is aimed at disrupting the search market significantly from where it is today," said Prabhakar Raghavan, Yahoo’s chief strategist for search.

The way Raghavan explains it: There are thousands of entrepreneurs who could revolutionize search if they had access to Yahoo’s search technology. "The reality is that we don’t have the intellectual capacity to try every single idea. What we want to do is unleash a long tail of such experiments and let the market decide what wins," he said.

Innovation from small players that otherwise would not have the people, money or resources to build a comparable search engine could hold promise in bringing consumers a better search experience than they receive from the three major search engines today, analysts say. But the strategy is unlikely to erode the dominance of Google, which has established itself as most people’s first step onto the Internet. And it comes as Yahoo moves forward with a controversial decision to farm out some of its search advertising to Google -- a move that has roiled the ranks within the company and led to some employee departures.

Raising more doubts is the bitter proxy fight to take place at Yahoo’s annual meeting Aug. 1 when billionaire financier Carl Icahn will attempt to oust Yahoo’s board and its chief executive, company co-founder Jerry Yang, an evangelist for many of the initiatives to remake Yahoo.

Icahn is campaigning to win support from investors so he can gain control of Yahoo and sell the company’s search business or the entire business to Microsoft, which for years has struggled in last place in the three-way battle for the most lucrative part of the online advertising business. Icahn’s bid got a boost Monday when Microsoft said that it would be willing to resume talks with Yahoo if it elected a new board, but that it was too early discuss details or price.

Legg Mason portfolio manager Bill Miller said Tuesday that Icahn would get more support from investors if he pledged not to sell the company for less than $33 a share, Reuters reported. Legg Mason is the third-largest institutional shareholder of Yahoo.

Talks between Yahoo and Microsoft broke down in early May when Yahoo demanded ...

... $37 a share. JupiterResearch analyst Barry Parr says he expects to see some "genuinely new" ideas to emerge from Yahoo BOSS as software developers "with a good idea and some programming skills" play around with it. "This probably will increase the number of people who are capable of doing innovation in search by really orders of magnitude," he said.

Parr also expects consumers to eventually benefit because they will be able to retrieve search results wherever they happen to be on the Web. Hence Raghavan’s focus on the "long tail," the theory that with unlimited choices on the Web, consumers are shifting away from mainstream to niche sites.

David Mandell, co-founder and vice president of marketing of Me.dium, a partner in Yahoo’s effort, says his 30-person Boulder, Colo., start-up can now achieve far more with its social browser than he could have without being able to build on top of Yahoo's search engine. The social browser lets you surf the Web with your friends.

"The reality is that there has not been much innovation in the search space. Yahoo, Google and to some degree Microsoft have all said, ‘Here’s what search is.’ And they have done a pretty good job at it," Mandell said. "By giving access to the BOSS platform to all of the people and developers out there, there will probably be a ton of innovation and ideas laid on top of the existing infrastructure. Some will work, some won’t. But the ones that do will benefit those who are innovating and they will benefit Yahoo."

But analysts caution that most efforts to reinvent search have been unsuccessful.

Gartner analyst Andrew Frank also points out that Yahoo BOSS is similar to a Google tool that allows  websites to offer a customized version of its search engine to deliver results that are more relevant to their users. Website publishers split the revenue from advertising Google places alongside search results.

"Google is so dominant and is so good at delivering high-quality results quickly to users, disrupting them is going to be tough," Parr said. "Google is the first place most people go. It’s unlikely that Yahoo can innovate in such a way as to disrupt that behavior."

It’s not for lack of trying. Yahoo has made myriad efforts over the years. Microsoft has as well, most recently offering rebates to people who use its search technology to find and buy some products.

IDC analyst Sue Feldman says she believes the search industry eventually will fragment the way the network television market, once ruled by three major players, did. She points to experiments underway at companies large and small such as using natural language to interpret search queries.

"If you take away the barriers to entry, there’s always the chance that one of these smaller start-ups could do something big," Feldman said. "Smaller companies are more agile and are able to innovate more quickly. And we are only beginning to scratch the surface in search."

Whether that innovation comes from this particular Yahoo initiative remains to be seen, said Gartner analyst Allen Weiner: "The approach is very sensible. But getting from a sensible approach to widespread adoption is a whole other issue."

-- Jessica Guynn

Photo: Paul J. Richards, AFP/Getty Images

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