Yahoo seeks geek credibility

As more applications move to the Web, companies like Yahoo are working to nourish their "ecosystem" of software developers.

A correction was made to this story. Read below for details.
Never before have small friends been so important to big companies.

Yahoo, best known as an Internet portal welcoming millions of consumers, is undergoing a transition to appeal to a different audience: software developers.

In September, for the first time, the company hosted a Hack Day, where it invited outside developers to mingle with its engineers and write ad hoc "mashup" Web applications using Yahoo's online services.

The goal behind Hack Day--and a broader developer outreach effort--is to create a diverse network, or "ecosystem," of partners, Yahoo executives said.

Making it easy for third-party companies to build applications that use Yahoo's myriad services, from photo-sharing to search, helps drive traffic to Yahoo sites. Mashups could also drive awareness of Yahoo's lineup, such as its instant-messaging service, executives said.

"We don't think of ourselves as a portal company anymore. We think of ourselves as a communications application platform," said Bradley Horowitz, Yahoo's vice president of product strategy.

Wooing coders
The Internet giant's shift in attention toward developers, particularly those at Web start-ups, highlights the strategic importance of Web development partners as more applications move online.

Web heavyweights Amazon.com, eBay, Google and Microsoft have made developer loyalty a high priority. Yahoo, which launched its Developer Network in March 2005, has taken that tack as well.

Bradley Horowitz
Bradley Horowitz,
VP, product strategy,
Yahoo

Many practices used by development tool companies are starting to become "part of the culture" at Yahoo, Horowitz said. These practices include holding developer conferences and publishing application programming interfaces (APIs) when new Yahoo services are launched, he noted.

"It's what you have to do to thrive and survive in today's environment," Horowitz said. "We're not doing this for the revenue per se. A lot of what we're doing is for the ecosystem effect."

Being in close touch with cutting-edge Web developers has also helped Yahoo snare some of the most popular Web 2.0 companies. For example, it acquired photo-sharing site Flickr and bookmark-sharing site Delicious, which both give outsiders ways to access data.

But that steady stream of acquisitions has created overlap with other Yahoo properties, a problem highlighted by a Yahoo senior vice president, Brad Garlinghouse, in a called the Peanut Butter Manifesto.

In the memo, Garlinghouse calls on Yahoo's top management to "kill the redundancies (and) align a set of new BU's (business units) so that they are not competing against each other."

Proving Bill Gates wrong
Even as Yahoo reaches out to a techie audience, it faces the challenge of changing the culture internally, as well as adjusting external perceptions.

In September 2005, Microsoft Chairman Bill Gates said Yahoo would never compete against tools powerhouse Microsoft in the developer realm.

"Yahoo doesn't think of themselves as a platform company," Gates told CNET News.com at the company's Professional Developers Conference (PDC) in Los Angeles. "I don't think you will ever have the Yahoo PDC."

Chad Dickerson, the senior director of the Yahoo Developer Network, doesn't see it that way at all. Dickerson, who started at the Web company last year, has even used that Bill Gates quote in presentations to demonstrate how Yahoo is changing.

"We are already a platform company," Dickerson said. "There is (cultural change) going on in Yahoo and every company on the Internet."

The company's services are already being used by outsiders to build new applications, he pointed out. For example, Menuism uses Yahoo's recently introduced authentication service, which lets a person log on to to the restaurant-rating site using a Yahoo name and password.

These types of applications benefit small companies because they don't have to build their own authentication service. It also increases the value of Yahoo IDs, which already used by millions of people, Dickerson said.

 

Correction: This story included incorrect information about Brad Garlinghouse's professional background. He is a senior vice president at Yahoo. The story also incorrectly cited the launch date of Yahoo's Developer Network. The network launched in March 2005.

Dave Cotter, the chief marketing officer at comparison shopping site Mpire, said that Yahoo's developer program is more varied and less structured than that of other Web properties, such as Amazon and eBay.

With such a large number of Web sites, there's a lot of potential for developers to create mashup applications that combine data from Yahoo's sites.

"Yahoo has kind of been on an acquisition tear the last couple years. The biggest opportunity on the development front is (bringing) together what they have in a centralized manner," Cotter said. "They are somewhat unique in that people can make applications that take advantage of multiple services."

Although Yahoo is stepping up its developer outreach, it remains primarily a media company tied to Web advertising revenue, rather than sales of technology.

But Dickerson contends that the line between technical software developers and content creators is blurring.

"If you look at what people are doing with our APIs, you see bloggers doing things that a publisher is interested in and a developer is interested in," he said. "They care about the same thing that media people care about, but also care about things like consistent (technical) interfaces and stable APIs."

The development program also helps speed up business deals, Dickerson said.

For example, a company called Qoop established a service to print photos from Flickr by using the site's APIs. After building the technical integration, it established a formal relationship with Flickr's parent company Yahoo.

That process is quicker than forging business deals before the technical work is done, and the arrangement sorts out whether partners can do what is promised, Dickerson said.

In addition, Horowitz contends that outsiders can provide valuable add-on products that Yahoo might not think of or devote the resources to.

"The beauty of this model is that it's extremely 'low touch.' What they want is self-service," Horowitz said. "In aggregate, the traffic and awareness generated is worth the cost of storage and bandwidth."

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