It's late and no quick fix, but the Yahoo Open Strategy has the potential to move the Web pioneer closer to the center of the Internet action again.
SUNNYVALE, Calif.--On Friday, 300 programmers will descend upon Sunnyvale, Calif., to plant the seeds of what Yahoo hopes will be an answer to Google's Internet might.
The event is called Open Hack Day 2008, and at it the coders will be the first from outside the company to get their hands on a number of programming interfaces Yahoo is releasing in an attempt to enliven its stodgy but still powerful Internet properties.
There's no guarantee that the release, a key step in what the company calls its Yahoo Open Strategy, will improve Yahoo's financial misfortunes. But it holds promise a strategy that could help Yahoo without having to try to out-Google Google.
That's because YOS marries the best of what Yahoo is with the best of what's happening on the Internet today. More than 500 million people come to Yahoo sites each month, 300 million of them registered users who log on, and they're coming for Yahoo's content and services. Yahoo may not be able to match Google's search engine and accompanying search ad money machine, but YOS ultimately could help improve Yahoo's assets, attract new partners, and bolster the company's advertising revenue.
"We believe openness is going to happen with or without us. We'd rather be at the center of it," said co-founder David Filo in an interview.
Here's an example of YOS in action that Ash Patel, head of Yahoo's audience products division, showed Thursday. The Yahoo home page, which is being revamped to show content customized for each user, houses an application from Netflix showing the movies a user ordered and new recommendations. Yahoo search is augmented to let people order more movies straight from the search results. And an application within Yahoo Mail could let users rate their movies and chat with Netflix members on their buddy list who've already seen it.
The pressure's on
Here's the rub, though: YOS will take time to build, and time is not on Yahoo's side.
Yahoo, faced with near-term pressures from Microsoft and activist investor and now board member Carl Icahn, would have preferred a quick fix to its business, and perhaps a cash infusion from Yahoo's search-ad partnership with rival Google will help in that regard.
YOS is a longer-term strategy, though. It's taken months to rewire the company's infrastructure to accommodate the vision. It'll take more months to coax programmers and business partners into using it. And still longer to attract Yahoo users to adopt the new features.
As Yahoo languished in recent years, new online services squarely in Yahoo's back yard, such as Facebook and Twitter, had time to put down serious roots. And of course Google has encroached, too: its search-ad revenue has funded any number of affronts to Yahoo, including Gmail, Google Docs, Google News, Google Finance, Orkut, and Blogger.
Of course, Yahoo believes that its clout on the Internet will give it the necessary leg up. So the next start-up, for example, could get traction quickly by drafting off Yahoo's page views and user base.
"Yahoo allows developers to create applications for the world's biggest audience," Patel said. "And they're able to do monetization for advertising. Those two are huge value propositions."
The company is betting the money will come its way, too. Yahoo expects to gain better insight into what users are doing, and consequently better predict what sorts of content or advertising the users want. "The better signals you have, the better you can serve the right content," and being able to target ads better means Yahoo can charge higher rates, said Chief Technology Officer Ari Balogh. "We expect lots of material benefit."
What's coming Friday
So what will be new on Friday? For those programmers who made the Hack Day cut, a pizza- and soda-fueled opportunity to toy with two broad categories of new Yahoo APIs (application programming interfaces), said Neal Sample, chief architect for Yahoo's platforms.
First is a collection of social APIs that let programmers use data such as a Yahoo user's address book contacts, status messages, profile information, and news feed items. Second is the Yahoo Application Platform (YAP), which will be used to write the applications that actually will run on Yahoo Web pages. YAP has some similarities to the OpenSocial project initially begun by Google but now supported by several others, including Yahoo.
The first Yahoo property to get the application support will be a redesigned profile page, a "control panel" site where people can record personal information, update their status, and see their social connections, Sample said. "We're going to get to the point where all our profiles can start coalescing so you have the concept of a single identity on Yahoo."
Over this year and into 2009, the support will extend to the My Yahoo personalized home page, Yahoo Mail with its 270 million users, and the Yahoo front page that's being redesigned with a customization feature called the content optimization engine.
If all goes according to plan, the collection of new interfaces and applications will "light up a user's social graph," building Yahoo more deeply into a person's online interactions, for example by spotlighting a person's most important contacts in Yahoo Mail.
Yahoo will call Open Hack Day a success if it produces developers happy with the company and feedback about the interfaces, said Chris Yeh, head of the Yahoo Developer Network. But there's something in it for Yahoo, too: a breath of fresh air. "Big companies do become insular at times...We do everything we can to try to avoid that."
Programmers not at Open Hack Day will only be able to see the API documentation at first, but the final APIs will be public soon. "In a few weeks, we're making them generally available," after Yahoo gets feedback from the early testers, Sample said.
These new programming interfaces will join other parts of YOS already released recent months: SearchMonkey lets people write applications that spruce up search results with elements such as LinkedIn profiles or restaurant reviews. BOSS (Build Your Own Search Service) lets others build their own search engines on Yahoo's, reordering or modifying results however they want and sharing search ads or revenue if they get popular.
Newest is Fire Eagle can keep track of a person's location information, including a mechanism to let users control what services may employ that information.
A few other APIs are planned for later release, Sample added, including some for geographic services.
Embracing openness--standards, open-source software, open interfaces--is a tried and true way technology companies try to leapfrog incumbent competitors. But retrofitting openness to a company that's been closed is difficult, and Yahoo clearly is concerned about breaking what it's built by moving at start-up speeds.
"Getting it right with hundreds of millions of users is harder than if you're starting from scratch," Filo said.
And it's not just about revealing APIs and doing some marketing. "We have to get the platform right so we can ensure the applications don't degrade the user experience," Patel said, for example by caching applications on Yahoo servers so pages load fast. "It is stuff that does keep us up at night."
Consequently, Patel said, the company will vet applications before letting them onto Yahoo sites--especially for Yahoo Mail site, where so much personal information resides.
Yahoo also wants to ensure users are in control when it comes to the permissions they grant to applications, said Venkat Panchapakesan, leader of Yahoo's audience technology group.
So it's tricky work for a lumbering giant. If successful, though, Yahoo will be able to reclaim some of the Internet initiative it once had in spades, potentially rearranging today's competitive landscape.
"Yes, we have lots of competitors," Filo said. "In some ways, we're opening up new level of competition by letting people build on top of us. Ultimately, this is good for the consumer and the Internet."
Yahoo gives a taste of its 'open' overhaul