So here’s something you don’t see every day: a company conceding its market space to the competition. My favorite comment: “To boost revenue from each search, Yahoo! plans to make ads more relevant to search terms, meaning people will be more likely to click on them. Advertisers pay Yahoo! a fee when Internet users click on the ads.” What? Umm… won’t their ads be, you know, irrelevant (at least from a marketer’s standpoint) once folks stop using Yahoo! to conduct search?
Two fairly smart folks, Anne Zelenka of Anne 2.0 and Steve Rubel of Micro Persuasion, took opposite viewpoints on this one; Anne says it’s all good, while Steve basically loses his mind and says, “Screw ’em.” As compelling as Anne’s argument is, I have a tough time agreeing with her overall. I think she’s right, in that companies can thrive in a knowledge economy by staking out its territory along the fringe (which vaguely echoes the old Reis and Trout positioning mantra, too). Additionally, I think she’s taking a look at the broader picture and looking for alternative forms of success. Admirable, though I’m not fully convinced that that’s the right way to go on this one.
Steve’s probably gone around the bend on the other side, but I think he’s closer to the fact on this. Except for one thing. To his comment, “I have no interest in using a product that the company doesn’t aspire to make best of breed,” I ask one question: what kind of cell phone do you have? ‘Cause pretty much all of them in this country are pretty lousy. Anyway, I do think that Yahoo! is taking an odd approach on this one and is going to hurt themselves in the short term. It does make me wonder what they’re up to in the longer term. And, drawing on Anne’s advice one more time, it might be worth some deeper, more reflective thought.