- The Washington Times - Monday, August 3, 2009

About fifteen years ago, I received a nice e-mail from a one-time graduate student in electrical engineering at Stanford University. David Filo was thanking me for the kind words I’d expressed about the search engine he and partner Jerry Yang had created, called Yahoo.

I no longer have that e-mail, and, soon, Yahoo will no longer have its full independence, should last week’s deal with Microsoft Corp. come to pass. Microsoft will get access to key Yahoo technologies and the Redmond, Wash., software giant’s relatively new Bing search engine will power Yahoo’s portal.

Equally important, perhaps, Yahoo’s sales team will market online ads for Microsoft’s sites, giving the firm more muscle against Google, which dominates that market segment.

The deal, which reportedly is worth a few hundred million dollars a year to Yahoo, and perhaps as much or more to Microsoft if ad sales go well, marks the end of an era. When Yahoo was king, Web browsers such as Netscape were sold for a $50 list price in Border’s Books & Music stores, in boxes. Now, you can download a browser free of charge.

What happened?

There are many explanations, but one popular theory holds that Netscape saw itself as a seller of software, rather than as a company offering a “portal” to the Internet. Had Netscape taken the latter course, it might have gained the commanding position Google holds in the marketplace today, and that Yahoo once held.

But portals are now almost as common as hot dogs at a baseball game. Tons of portals and wannabes exist, from Yahoo, MSN, AOL and Google to more specialized sites for women, sports fanatics and stock traders. Indeed, the Internet seems to mimic the broadcasting industry in this regard: Instead of “broad” portals such as AOL or Yahoo holding pre-eminence, many of us are looking for gateways to the Web that cater to our own tastes.

Google’s iGoogle portal is a great example of this. You get some basic tools — weather, search, Google’s Gmail, and a YouTube feed — and can add “gadgets” to bring in stock quotes, travel information, news headlines, and so on. Yahoo’s myYahoo offers the same thing, as does AOL.

Does this mean the end of Yahoo, AOL and Google? Not likely. Unlike Netscape, the online search firms and AOL understood things were changing, and they’ve rolled with the times. The success of each is still to be determined.

Google has a huge share of the online ad market, but that can change if more precise, more targeted means of advertising are found. Google’s claim to fame, after all, is based on its algorithms that are used to figure out which Web sites on a given topic are the most popular, as well as what advertising people are interested in. If someone, somewhere, comes up with a better formula, then Google can start to worry.

Or, they can write a check. Many other companies from AOL to Microsoft to Yahoo have done the same thing over the years. Someone else developed Yahoo’s e-mail service; Microsoft has acquired, and then refined, all sorts of technology as well as developing its own.

In technology, innovation can come from a checkbook as well as a slide rule. The key lies in being able to spot what’s good and then run with it, if possible.

Who will spot the next wave of “disruptive technologies” that change the way we do common tasks?

“Search,” after all, once took place in the card catalogs of the local library. Now it happens with a keystroke and a mouse click.

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