Yahoo ponders the meaning of search

There's perhaps no better way to shift attention from your failings in one era to proclaim the start of a brand-new, totally different era.

Yahoo is in the midst of a grand transition as a company, with a pending deal to sell its search assets to Microsoft in exchange for a healthy portion of the revenue generated by searches on Yahoo's pages. Yet some in the company seem a bit perturbed by talk that it's giving up on the search market.

"With all of the events that Yahoo has gone through in the last several months, one of the questions I get is: 'Does Yahoo still care about search?' The answer is: Absolutely," wrote David Pann, Yahoo vice president and general manager of search marketing, in a blog post Tuesday highlighting enhancements to Yahoo's search ads.

The thing is, Pann isn't talking about search (the business of crawling the Web, indexing the results, and matching the data against queries) so much as he is search presentation, the business of arranging the data produced by search queries in an artful and useful fashion. Under the deal Yahoo signed with Microsoft (assuming it passes regulatory review), Microsoft will be the exclusive provider of search results on Yahoo's Web pages, although Yahoo will retain the right to control the way those results are presented.

It's the manifestation of how Yahoo CEO Carol Bartz sees the search market. She recently compared Yahoo's plans for search to the way PC makers like Hewlett-Packard and Dell build different products around a common Intel chip, implying that the core search business is perhaps a commodity and what draws in the user is the fancy packaging.

But does the analogy apply to a market as relatively new as search? For one thing, the cost of switching search engines is much less than switching PCs--it's hard to beat free. And it seems presumptuous to more than a few veterans of the search world that breakthroughs on the back end are waning: after all, Advanced Micro Devices manages to come up with something that bruises Intel every five years or so, and that's an old market.

Still, Yoelle Maarek, a search expert who recently joined Yahoo Labs to lead its Haifa, Israel, office, argues that the action these days is on the presentation side. "I don't want to say we have plateaued in ranking," but the advances that have taken place since the debut of Google's PageRank are relatively minor compared with the potential to improve how results are presented to users, she said.

Maarek came to Yahoo from Google, where she was instrumental in the development of front-end presentation enhancements such as Google Suggest. In her view, the last decade brought a revolution in the way Web pages are crawled, indexed, and presented to the user: a revolution that saw Google come out a clear winner.

But over the next decade, she argues, search will become more about divining the user's intent and improving the delivery of search results. "What's making the difference now is really usage, it's how people enter queries" and what they truly mean when they enter that query, she said.

The potential problem for Yahoo is that historical innovations in search presentation haven't really moved the needle, said Danny Sullivan, editor of Search Engine Land and a veteran search industry observer.

In a 2006 post titled "Why Search Sucks & You Won't Fix It The Way You Think," Sullivan assembled screen shots of various attempts through the history of Web search to show that the simple method of "enter query, hit submit, produce list" is so ingrained into Web users that attempts to monkey with that usage pattern fail. Three years later, not much has changed, he said this week.

If Yahoo's goal after the Microsoft deal is to keep searchers on Yahoo pages in hopes of maintaining investment in search ads, focusing on search presentation isn't necessarily the best way to accomplish that goal, Sullivan said. "I don't think the presentation becomes more important, I think the brand becomes more important," he said, pointing to Microsoft's decision to invest not only in presentation improvements but to also create a huge marketing campaign to boost Bing's image before the world.

Besides, Google is working both the back end and the front end of the search business, and likely has more people working on presentation inside Google than Yahoo does, Sullivan said. "If (Yahoo) built a really unique feature that is compelling, maybe that would work. But if they do, Google will imitate it."

In any event, Yahoo can't afford to give up on search until the Microsoft deal is completed. Work goes on inside Yahoo Labs on back-end search development, Maarek said. "We don't want to disappoint our users. Until Bing replaces us, we need to do a great job."

Yahoo's goal in a post-Microsoft search world is to merely tread water by making sure Yahoo users on Sports or Finance are not so turned off by the Bing-Yahoo combination that they leave the site entirely to search on Google. Bartz has said many times that the overwhelming majority of searches done on Yahoo are done by people who are already there, rather than those who head directly to Yahoo.com or set Yahoo as the search window in their browsers.

There may very well be breakthroughs that can be made in presentation of search results, but it does that represent a competitive threat to Google and Microsoft, as Yahoo executives have argued? That is very much an open question to be pondered as Yahoo moves into a new era.

But for now, Yahoo has 359 million reasons to emphasize that it's still competing for searchers. That's how much revenue the company pulled in from search ads on its owned and operated sites during the second quarter of the year. It can't allow nearly one-quarter of its overall revenue to languish if the Microsoft deal takes longer than expected to complete.