on Thursday Yahoo is opening its search technology and powerful data centers to other companies, allowing them to build new or customized search engines without having to make the huge investments needed to develop a search service from scratch. Yahoo, in turn, will sell ads on those new search engines; if some grab even small slivers of the search market, Yahoo will share in their success.Yahoo is embracing principles of innovation in networks. It is striving to capitalize on network effects involving its customers embracing this platform to create more customized search than possible with Google.
Erik Schonfeld has a good blogpost on this. He observes that:
All of this forms just the first half of Yahoo’s intentions with BOSS. In a few months, Yahoo will also release APIs for what it’s calling “BOSS Custom”. This version of BOSS will allow developers to actually push data to Yahoo’s servers for indexing, and then perform highly customizable search queries against them.
So in a way, BOSS starts by opening up web search to 3rd parties, but it will go far beyond that by providing cloud-based search for all imaginable types of data. Yahoo has already enlisted a handful of partners for BOSS Custom, including us here at TechCrunch. We’re working on a search implementation that will enable readers to conduct searches across the entire network and retrieve results that have been weighted using a custom relevance model. Readers will also be able to drill down by author, comments, date, and other criteria.
BOSS is the second concrete product to come out of Yahoo’s Open Strategy. The first was SearchMonkey back in April.
This is a brilliant strategy for the #2 player. It is in line with network-strategy thinking. However, for Yang & Co., the timing is all wrong. On the one hand, they want to partner with Google (after the fiasco with Microsoft) and then they want to create an alternative model. Different modes of experimentation (that are mutually conflicting) may be OK when the company is doing well. But, when the company is under attack as Yahoo has been, such initiatives may come across as incoherent. I am waiting to see how Yang & Decker will convince their shareholders to retain their slate of directors against Icahn. What they need is a simple-yet-powerful strategic vision and credible numbers that people can rally behind. The first six months have been nightmarish for them. Will the next six months be significantly better? All will depend on August 1. This is a good piece of the larger and compelling vision that Yang & Co. need to unveil...
Clearly, this strategy has risks. As NY Times reported:
Yahoo executives acknowledged that the new strategy, if successful, could cannibalize Yahoo’s own search business. But they said that if a search start-up became popular, it would probably take more users away from Google than from Yahoo, as Google has a far larger share of the market.
“We did a lot of analysis,” said Bill Michels, senior director for Yahoo’s open search platform. “We are comfortable with the risks associated with it.”
In the coming days, we will continue to see more announcements detailing Yahoo's strategy. Otherwise, Yang & Co. have their days numbered and Ballmer & Icahn may be trying to work out a deal.