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Yahoo CEO: “Google Is Going To Have A Problem”

Bartz cites overreliance on search, difficulty of growing more

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  1. Mike

    “…in this light, Yahoo’s rather scattered network of properties starts to look a little more attractive.”

    Does it really? Bartz’s argument is ridiculous — it assumes no organic growth in Google’s core business. Yes, if the search business was a 0% growth business, then Google would need to develop very large other businesses in order to maintain a high growth rate. However, the reality is that even if Google does not gain another point of search share, the search business is going to continue to grow at a nice clip. Incremental dollars are still flowing into online from other less efficient media, and this rate will only increase as cyclical ad dollars return to the market, in many cases finding their way to online media such as search rather than the traditional media from whence they came before the downturn. And of course, as it chugs along, it will continue to spit out nearly enough cash to buy Yahoo (or a company of Yahoo’s size) each and every year.

    It is worth adding that it is also ridiculous for Yahoo to say Google is only known for search. That’s like Fresno chiding Los Angeles as only being known for its entertainment industry. Google has “small” divisions that in some cases are as big as some of Yahoo’s largest businesses. As just one obvious example, Google has been steadily kicking Yahoo’s a** in email for about 5 years now… http://news.softpedia.com/newsImage/The-Email-Battles-Gmail-VS-Yahoo-Mail-2.jpg/

    I don’t mean to fawn over Google, but I think Bartz’s remarks were ridiculous spin, and certainly do not deserve to be lent credence by this fine publication.

  2. Bob

    Mike, your “obvious” example is wrong.

    Read the caption of your graph, it’s a fantasy exponential projection based on the growth rate of both products 4 years ago.

    It can however be used as a good illustration that exponential growth rates are unsustainable.
    The real numbers show gmail’s growth slowing over time, which is perfectly normal, as it becomes harder to attract an ever-growing number of new users in an already saturated market.

    This is not entirely unlike the situation in a number of other mature markets, including search.

    It is not coincidental that Google has been frantically working to diversify their business streams, as they certainly understand their next 10 years of growth aren’t going to be coming from their search business.

  3. Mike

    Thanks Bob. I noticed after the fact that I accidentally chose a chart that was based on a prediction rather than actual data. It appears that GMail is actually only 35-40% as big as Yahoo Mail, not 75-80% as indicated by the chart. Of course, this is still a substantial portion of Yahoo Mail’s size, which is all I was trying to illustrate by comparing what is perhaps Yahoo’s most important business to one of Google’s “small” businesses.

    Net, I don’t disagree that Google is (and should be) looking for new sources of growth. What I disagree with is the notion that their dominance in the search realm is any way a “problem” for Google, or an advantage for Yahoo, as Bartz seems to claim.

  4. @JoeTierney

    Good lord Bartz is clueless. “Google is going to have a problem because they continue to smoke us across the board?” This is how she brings attention to Yahoo? She’s a female version of Ballmer. Hardworking as a person can possibly be but to arrogant and too much of a control freak to get out of her talented employees way. Yahoo has some of the best talent in the world but “has been hitting bottom” for as long as I can remember. A 10 year deal with MSFT around search was a short-sighted move by a CEO who needs to take more vacations and let smart people do smart work to give Yahoo any chance at ever being relevant again. Right now, they aren’t.

    The market cap comment? One company is more valuable than the other and that puts them at a disadvantage? Right.

    The only thing “the market” will find interesting about Yahoo in the next 5 years is the footnote in Microsoft’s annual report regarding acquisitions.

  5. Tubbo

    So Google’s problem is that it’s enormously successful at what it does (search), has discovered an awesome way to make money with it, and is doing so at a rapid pace?

    When was the last time anybody needed to visit Yahoo for anything? 1999? Tell this bitch to stop crying the blues about her shitty strategy (for the record: branching a simple concept like search into all the bullshit that yahoo puts out is a horribly inefficient business plan) and think of something cool so her COMPANY DOESN’T FAIL.

  6. Vick

    Google is more vulnerable than Yahoo to go bye bye overnight. Worst now that their search engine is a mess. You can’t find anything now with Caffeine.

    Look at the Facebook threat now. Google must be praying FB doesn’t enter search as it is rumored or they will have to build a dedicated Walgreens next to their HQs to sell them Peptobismol 24/7. Google is afraid of Facebook did you know that? Read the news! They can’t sleep back at Google HQs. Everywhere they look they see “Facebook”

  7. Google is only known for search? Really? Am I wrong in thinking that GMail has overtaken Yahoo and Hotmail as the dominant free email that most people use? Maybe because it’s “GMail” and not “Google Mail”, that’s the problem she sees?

    Ms. Bartz doesn’t fully understand what Google does, and therefore doesn’t thrive the way they do. Google isn’t as obsessed with branding everything with their name, which is why they have taken off. Gmail is an example. You can have a gmail account, use it for all your “real” email addresses, and Google doesn’t care. Try that with Yahoo, and you’ll get a nice surprise – a bill. Whole industries of tools are out there based on Google’s model. Zoho, for instance, comes to mind. Google docs is there for people that just don’t want to pay Microsoft several hundred dollars every few years for Office and for people that want to be totally cloud driven.

    The reason Ms. Bartz is being blown out of the water by 7-8 times the profit per year is that Google is much more in line with what people want on the net, and not just want the investors want. Say what you will about Google, but they have exploded because they deal with their customers first, which feeds money to the investors…you know, the old model for business that has always worked.

  8. Guest

    Between GMail, Chrome, and Android, saying,

    “Google is going to have a problem because Google is only known for search.”

    …is just stupid. Really. It’s like saying, “they’re really successful, so they have more to lose.”

  9. She keeps selling off Yahoo!’s assets, so why is she bragging about Yahoo!’s network?

  10. AllyB

    Okay, I’ll be the first to admit that I’m a Google fan, mostly because they are NOT ONLY SEARCH (although I still feel the offer the best SERP). They are one of the only integrated email, documents and calendar platforms online that is free, reliable and easy. To say that 99% of their business is search is patently naive. When you add in the fact that my whole life is on my iGoogle page, my Android phone, and hopefully soon-to-be Android based tablet PC, I would put search at more like 15-20% of their business. Wave, while it definitely needs some tweaks, either is or is the foundation for how social and business communications in the future will be. How many companies, cities and states have ‘Gone Google’ again?

    Once again, Yahoo is making an ass out of themselves…perhaps they should just close their mouths and expend their energy focusing on developing offerings people actually use BEFORE their competitors.

    • Bob

      She is right. Without search there is no iphone and all those apps you use. If Google search dies, so does adsense and all the useless and buggy applications only webmasters, geeks, programmerss use.

      • Guest

        Without search? If There Is No search How is one to find there way round the net. Google Does A good job at it And I dont see search dying any time soon.

        Ebay Is Good at helping People To Find and sell things And thay are good at it, as Google is good at search. I see it like this if you are good at something why change. If it ain’t broke, don’t fix it

        • She has a point about Google’s over reliance on search as its profit center…but I do believe that it is only temporary…just wait until they release their 400Mb/s Fiber wire Broadband Internet for $50 they will quickly become the monopoly of internet services because cable/DSL can not compete with that kind of a speed/price…although as far as search though I think that Facebook may start to give them some run for their money…although I wouldn’t be surprised to find out that as I write this Facebook and Google are working out a deal…then they will definitely have a monopoly of EVERYTHING Internet. Yahoo? Old news/doesn’t really even exist in my world…she gets paid 47.2 million to say crap like that…

  11. I don’t totally agree with it. Google still have more than half the market in terms of search and other media search. Yahoo may have more diverse media properties but it’s too overwhelming for ordinary browsers.

  12. I agree that she has no idea about what is going on in the world.

    Android based pc’s are coming
    google maps is getting better by the day
    adsense is still giving people hope of making it rich
    search is taking over yahoo in many countries now.
    as bandwidth speeds increase then we will have youtube tv

    cant believe they gave her 48+ million to mutter this garbage as it circles down the toilet.

    this is what happens when the suits start having ideas.

    the developers are the backbone and idea factories of what can be done as they experiment with technologies, not the suits.

  13. …before giving good advice to others.

    I`m advertising on Google, Yahoo and Bing.

    At Yahoo (and Bing) my logs show rampant impression fraud going on for months, degrading the rankings of my strongest ads. I never saw similar impression patterns at Google.

    Before giving advice to others, Yahoo better should invest its energy in trying to become a competitive player in the search market.

    So far Yahoo’s ad interface and its ad engine filters are light years behind Google’s.

    I really doubt that you ever saw impression fraud patterns like these below at Google adwords:

    http://bit.ly/yho_impression_fraud
    http://bit.ly/bing_impression_fraud

    Best Regards
    Hans

  14. Marc

    Yahoo has a bigger problem than Google. Here in Belgium nobody speaks anymore of Yahoo where it was 10 years ago the number one as search engine.
    They are now taking over the market of Microsoft with all there free tools and I think they are now a danger for Apple with their new products.

  15. But what about user statistics ? It’s quite possible that a lot of people would be interested in how many people on a monthly basis use Google for search and other purposes compared to Yahoo.

    It’s obvious Google and Yahoo have a hard competition going on. Bing can probably forget about coming anywhere near these two. To me it looks like Yahoo is catching their users on a different level than Google. Correct me if I’m wrong though…

    Interesting devellopment I must say.

    Kind regards,
    A. Stoelinga

  16. Its good to hear some comments from Carol Bartz and it looks that the cold war and the lava is now erupting to stop google from being always #1.

    Google is already on its way with other many interesting and much better products than Yahoo.

    G talk replaces Yahoo messenger

    GMail replaces Yahoo Mail etc….etc… so you got to go a long way Carol from $24 billion to $169 is a huge huge gap.

    Well No offense i like both the companies they are good as far as they deliver what we want..

  17. saying that yahoo is better then google is like saying my gasoline run car goes better with diesel. that is a stupid argument in my opinion and google is lightyears better then other search engines if we take into account all the extra gadgets google offers FOR FREE.

  18. $169 billion!

    $1 billion more or less in Googel

  19. I don’t think she’s right at all… I would buy it from someone outside yahoo :)

  20. Google’s brand value and zeitgeist are lightyears ahead of Yahoo and Yahoo would have buy a clue every minute for the next ten years to match that. There’s no amount of substance that will outperform “cool,” which is a pretty sad statement about Americans, but nevertheless an accurate one.

    The real issue that Bartz is missing is that Google is messing with its search algorithm so much lately that it’s becoming an ineffective tool. So, much like the Sarah Palin vice presidential race, Yahoo should sit back and allow Google search to self-destruct and be ready to receive the fallout.

    The biggest problem with Yahoo, though, is that they love themselves a little too much and their arrogance is annoying. You are in service to the customers, Bartz. Your customers are not beholden to Yahoo.

    Oh yeah, one more thing… Bartz’ compensation, like most CEOs is obscene. And to take home that kind of compensation when ten million Americans are losing sleep because they can’t find a job is unconscionable. How many people could be employed for $42 million?

    I shun Yahoo because its leaders seem heartless and greedy. And too bad Bartz doesn’t get that something like leadership character matters because Eric Schmidt, Jeff Bezos, and Steve Jobs do and look at how their companies have performed in the past two years. Lots better than yours, Ms. Bartz. They ask “How can we serve people better” while Yahoo asks “How can we make more money.”

    When you ask the wrong questions, you get the wrong answers.

    • Guest

      Is she dating John Donahoe…..

  21. I am agreed with Bartz that Google is only known for search engine. Although I am very new in the field of online business yet I come to realise that online business do not rely only on search engine alone. In fact, there are many factors that needs to be considered when putting an advertisement online.

    For example, most advertiser looking for a site to advertise thier product especially those of site that has high rank page by Google but at the same times the rank is not necessary to have many visitors. Therefore, if I would like to place my advertisement in any site, the first thing that I need to know is the traffic that goes to a spesific site.

    Hence, in this regards the best reference is the alexa ranking that based on the traffic. More traffic means the advertisement would be exposed to more potential customer. In fact, I have found there is a site that has a good page rank yet have no visitor.

    Therefore, if Bartz says Google is going to have a problem then the possibility for the google to face a problem is cannot be deny as for me I am going to advertise my product is not a site that has a good page rank but rather has a good ranking in alexa.

  22. I agree with Bartz. perhaps, as a competitor to Google she was unwilling to elaborate as regards what direction would make sense for Google as it ponders the need to expand. In my opinion it is critically important for Google to intensify its business efforts in areas relevant to paid (advertisor supported) search marketing. I am very disappointed to see all these efforts on Google’s part to compete in the Operating System arena, the hardware arena, etc. All of these are a waste of item. I can’t help but think that they are emblematic of Eric Schmidt’s prior careers at Sun MicroSystems, and Novell. These emblems should point out that a change in top leadership should be made to get Google back to what it does best–sell advertising online.

    As far as Bartz’s compensation goes, I have no problem paying lots of dollars for lots of success.

    Just my two cents

    Ira Michael Blonder
    IMB Enterprises, Inc.
    Huntington, NY

  23. think she is absolutely right. Actually I visit Yahoo more often on a daily basis that Google. I only go to Google to search and check on my advertising with Google adwords. I find Google news to be less inviting that Yahoo. Yahoo’s news is a step above any competitors.

    I think Yahoo mail is steps beyond Google G-mail. To me Google is comparable to Wal-Mart; people use them because they feel like they have to. Yahoo is more like a mom and pop store, the customer is the focus.

    If Yahoo would put a little more focus on making search returns better, Google would be a thing of the past for me.

  24. Morgan Timney

    “apple is only known for search” is a ridiculously naive statement that doesn’t even need to be argued. I don’t know how someone so out of touch gets to be head of a tech Corp but I’d sure like a chance to do better! Somehow that’s unlikely but I would enocourager her to take take note of the breadth and level of googles services and it’s acheivements largely without the usual backlash that monoplies usually generate. Frankly I am in awe, while this “CEO” is asleep.

  25. Stephen Cole

    I think Bartz “is going to have a problem”, if all she can do in comment on a rival company. When you have a problem yourself, you deflect/hide that issue by commenting on someone else. Thereby deverting eyes away from yourself.

  26. Hobo

    Blah, blah, blah, blah – RUBBISH!

  27. I do respect to Bartz personally but I have a doubt with what she said. Google brand may be well known for search engine market but they are too well known as “Pioneer” either. I wonder how she could saying Google won’t go so far while Yahoo never made any innovation lately compared to Google. Google has done well on mobile market with Android OS and Chrome will be a future platform of industry. ie. car

    I wonder if Yahoo ever thinking about create free online document solution to beat Microsoft like Google done with Google Docs. I was the one who believed Google won’t go so far with gadget and mobile market, but they proved I was wrong.

    As long as Google could keep up their innovative, I doubt if Yahoo could even has a same phase as Google anyway.

  28. I think she is probably right. Although Yahoo is doing well financially I think they can do things better. Maybe Google could follow Yahoos foortsteps but make their site much more user friendly
    and easier to move around in and make inputs on the site easier to access.

  29. Google are a bunch of greedy money sucking ripoff artists,
    Google adwords and adsense are the two most proficient rip off tactics that google uses to destroy the young internet entrepeneur. Suck the life right out of them

    Not to mention there friggin B.S. algorithym that decides who goes where.

    There a f—kin bunch of Capitalists Duffuss’s

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