Friday, September 4, 2009

Copying Twitter won't help Yahoo

For some time now, Yahoo Meme has been operational in two languages - Spanish and Portuguese. But it has bigger ambitions - to take on Twitter, the world's largest and most newsmaking microblogging service.

So, when Yahoo quietly launched its English language service for Meme, it was not surprising.

But was it really? Twitter already has a staggering following around the world, with around 44.5 million users recorded by June 2009, and a three-digit month-on-month growth rate. So to compete with a service that is so much ahead of the race that even the granddaddy of all social networks - Facebook - is forced to follow Twitter's design and user-interface (UI) ethic, would seem a bit odd. Especially when its Indian-developed social network SpotM died an unsung death last month and Yahoo 360 was shut down in July this year.

Social networks - like email or online photo sharing services - can be tricky business propositions. Facebook, even with its 220 million user base, has been able to make an estimated $ 300 million in revenue in 2008 according to Forbes magazine, mostly through banner ads and referral marketing. Twitter projected - according to leaked documents - that it would earn a grand quarterly revenue of $400,000 by the end of the year.

In the world of American business, both figures are insignificant (Google earns almost $22 billion a year and Microsoft earns thrice as much as Google).

But what Facebook and Twitter have done is what no other Internet company, including Google, has been able to do. Both have managed to integrate a large part of the world's Internet users under one service. So in terms of influence, both Facebook and Twitter are on par with Google and Microsoft. Ahem, and yes, Yahoo.

The Meme service in English has features similar to Twitter, according to TechCrunch, an Internet blog company that reports on, among other things, developments on the Web.
So the question arises why Yahoo, a company that pioneered so much on the Internet at one time, should just copy Twitter down to the last "Retweet" (although Meme calls it "Repost"), and behave as if it is reinventing the wheel?

The answer is simple - Yahoo has been desperately trying to reinvent itself after its crisisridden past few years, in which it lost a significant part of its workforce to retrenchment and organisational restructuring. Its email service, though still popular, has lost ground to Microsoft's Live (Hotmail) and Google's Gmail. In instant messengers, Windows Live messenger with 343 million users is way ahead of Yahoo's 285 million accounts (Yahoo does not give a breakup of individual services, but an agglomeration of all its services).

Its management problems have further dented its progress in several areas although CEO Carol Bartz's almost headmaster- like disciplining has brought the company back in the reckoning. One of her key decisions was the appointment of Arun Tadanki as the head of Yahoo for South Asia, Middle East and Africa.

Yahoo's strategic alliance with Microsoft for its search services to take on Google is another step that could hurt the latter's business plans.

To be sure, those are important business decisions. But it is innovation that Yahoo has lagged behind in pathetically.

For all its expertise, many of Yahoo's new services post 2004 (Flickr, Yahoo Voice, Jumpcut, to name a few) have come through acquisitions, and even though it has fantastic R& D teams based in Bangalore and in the US, a large part of their work still consists of upgrading its existing services, while innovations are few and far between.

For Yahoo to compete successfully with the rest of the world, that needs to change. Which is why, it is disappointing to hear about Meme's features being similar to Twitter's. It was only recently that Yahoo showed the gumption to take on erstwhile followers which have now become market leaders. Its investment in Meme would only pull back Yahoo further.

Now if only we were all proven wrong and Yahoo pulled a rabbit out of the hat.

That would be fun. But will Yahoo bite the bullet?

News Source:§ionid=4&secid=&Itemid=1&issueid=122

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