Hey, Google, Yahoo's CEO Says You Have Problems

Yahoo CEO Carol Bartz has put Google under a microscope -- and found some flaws. The search executive talked to the media about Google's weak spots, but some say she's not in a position to scrutinize a company when there are many problems at her own.

In an interview with BBC News tech reporter Jonathan Fildes, Bartz said Google will have to "do a lot more than search." As she sees it, Google needs to diversify to avoid problems and "grow a company the size of Yahoo every year."

Yahoo once dominated the search market and actually had an opportunity to acquire Google in its upstart days but declined. Now Google owns 65 percent of the U.S. search market, compared to Yahoo's 17 percent -- and Yahoo has been losing ground to its partner, Microsoft's Bing.

Google's Revenue Pie

"Google is going to have a problem because Google is only known for search," Bartz told BBC News. "It is only half our business; it's 99.9 percent of their business. They've got to find other things to do."

With more than 70 web sites and services, Yahoo is indeed much more diverse than Google. Yahoo makes editorial content and services available in 20 languages in nations around the world. Although some have criticized Yahoo for its breadth, especially in the face of its struggles, Bartz believes it will be beneficial to the company over time.

"Yahoo is a company with a lot more fingers in a lot more pots," said Brad Shimmin, an analyst at Current Analysis. "If Google was to lose its stature or there was something to come along that prevented them from realizing the same level of revenue they have now with their advertising platforms, they would be in trouble compared to another more diversified company."

Can Yahoo Take on Facebook?

Bartz's comments weren't reserved for Google alone. The CEO also mentioned Facebook, calling it a "frenemy" that Yahoo can hold its own against.

"They certainly are taking people's attention and time," Bartz told BBC News. "But what is kind of wrong about the conversation is that social just means Facebook. Social is interaction. Social is commenting on news stories. It's blogging. It's sharing photos. So there are social capabilities running throughout all of our sites, including Twitter feeds and Facebook feeds."

Shimmin said Yahoo's thoughts of competing with Facebook are "a little up in the night." Although Yahoo has some capabilities that are on par with Facebook from a technical perspective, he said, even those are lagging because Yahoo hasn't put much recent effort into developing them.

"Yahoo has some products like Flickr, which is a very popular photo-sharing social-networking site, and they have a few others that are of good stature," Shimmin said. "But they have nothing like Facebook."

May 1, 2010 12:18

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