WSJ writes on Google’s rising clout, and how it has been helped along by the very companies that are competing with it. The mistake IBM made with Microsoft 20 years ago is what Yahoo did with Google.
Some rivals, particularly Yahoo, can blame themselves for helping Google take off. Three years ago, Yahoo picked Google’s search engine to provide search results on Yahoo’s network of Web sites, replacing a service by Inktomi.
Yahoo had started by providing Internet searchers with information from its own directory, functioning like a giant Yellow Pages to the Internet organized largely by human editors. If this couldn’t provide the information, Yahoo would use Google’s search technology. Increasingly, though, users went directly to Google’s Web site for results.
It was a classic case of underestimating a high-tech jewel and giving it away, similar to when International Business Machines Corp. gave the business of supplying PC operating systems to a little-known company called Microsoft. Although IBM thought it was just subcontracting a part of the PC, Microsoft’s Bill Gates saw that operating systems would someday control the lion’s share of profits and strategic influence in PCs.
Executives at Yahoo gradually realized they were losing their leadership in Internet search. The Google threat to other Yahoo businesses didn’t sink in until last year, when Google unveiled a Web site that automatically collected summaries and headlines of top news stories from the Web and displayed them.
This is a fascinating story – one of the best I have read recently in WSJ, which puts a very nice perspective on the Search space.
What could dethrone Search and Surf? Syndications and Subscriptions. More on this soon.