Search Engine Wars: Google Versus Yahoo

By | November 19, 2004

When talking about online wars, battles and battle lines being drawn, it is hard not to compare Yahoo and Google. Both companies do search, email, local searching, photo searching, shopping, personal sites and they even have simple utilities such as Google’s Toolbar and Yahoo’s Instant Messaging application.

There are so many crossovers that it’s hard to imagine the two companies as anything but at war. However when you get right down to it, the two companies are trying to do two very different things. In fact, the two companies are so different that it’s hard to say which of the two is “bigger”. Yahoo has better financials, but Google is by far the leader in the search industry. Google does search incredibly well, but has few other publicly consumable features that are gaining any traction.

It may be easiest to look at these companies based on where they are going, instead of based on what they do – though we’ll do that later in this piece as well.

Yahoo! is, and has always been, a portal company. Provide all of the services users need or would want, wrap it up in some attractive options and hope you can hit the magic million user per service mark.

Yahoo’s list of properties is staggering. Email, online games, finance, music, shopping, auctions, news… In fact, Yahoo has more than 100 distinct properties that do everything. On top of that, Yahoo has the second most popular search engine and one of the top 5 portals on the web. Yahoo’s goal is to ultimately become the portal to the web not just in terms of pointing to other companies’ services, but also in terms of providing every service to its users. Some industry experts are surprised that Yahoo hasn’t formed an AOL-like network that allows its users to access every service under the sun for a mere $50 per month. Maybe one day.

Google, on the other hand, is an information company. As we mentioned in our last article, Google is looking to ultimately be the holder of all of the world’s data, and to be the single place you go to search, categorize and use that data. Google is looking to become an information platform.

In this way, Yahoo is aiming to be a consumer company and Google is aiming to be a platform – A platform that every other company wants to use, but still a platform. Yahoo will continue to provide services, and Google will continue to provide information.

The differences are even more striking when you get right down to how each company provides certain basic services: search, email and shopping.

Searching for the Truth

Yahoo’s search engine is designed to do two things: draw users and display ads. The more eyes Yahoo can bring to the search engine, the more eyes it can bring to its homepage. The homepage is where Yahoo highlights news, finance and a myriad of other services such as its popular instant messaging program and its music services.

Google’s search engine, on the other hand is geared towards helping users find information. There are no other services Google tries to push through the search engine. In fact, the Google search homepage is a perfect example of a slimmed down, minimalist search engine. In addition, Google provides seamless ways to search other data such as images, news and newsgroups. Even Google’s advertising and paid inclusion are more contextual than Yahoo’s, ultimately designed to always help users towards the answer they might be looking for.

Yahoo’s goal is clearly to drive users to its other properties, which Google’s goal is obviously to help users find the right information.

You’ve Got Mail

Yahoo’s email application, Yahoo! Mail is the world’s most popular online mail service, with 40M active users. It allows for a decent amount of space – 250MB – and also allows users to pay for a Premium upgrade which gives them more space as well as some decent features. Yahoo’s email platform also includes calendars and other applications which tie in nicely, allowing users to effectively have a “personal information management” application, available from anywhere with an Internet connection.

Google’s email application, GMail is still in beta, and has been for more than 6 months with little indication of a production version being made available. GMail was made famous by its “invite only” policy – users could only get a GMail account from an existing GMail member. Google further increased the popularity of GMail by limiting the number of invites users could send. GMail was such a desired feature that an entire industry was born on EBay with invites going for as much as $1,000 at the peak of GMail Mania.

Google allows users to store 4 times the amount of data as Yahoo, sort messages into “conversations” and has an aggressive anti-spam layer guarding users from unwanted messages. It has no personal information management features and, really, has few features beyond receiving, sorting and searching for emails. But, these things are all things Google does well because its goal is to ultimately let you receive as much mail as you want and then be able to search that mail whenever you need to.

In this sector, Yahoo is attempting to provide users with all of the services they would need, while Google is trying to provide users with all the information they would need.

Shop till you Drop

Yahoo’s shopping and auction channels are popular destinations for people who are looking for something wider than EBay as well as looking for more than just information, which is what Google’s Froogle service provides. Yahoo’s Stores are incredibly popular with merchants, as it lets them setup a store in minutes, and provides an incredible opportunity for exposure through Yahoo’s search results and other properties. Popular for merchants and popular for users, Yahoo’s stores, shopping and auctions are ultimately a single destination where you should be able to find whatever you are looking for.

Google’s shopping website, Froogle, on the other hand is much like Google’s search engine: a way to search thousands of stores for tens of millions of products, all based on the best price and other search criteria users are looking for. Google’s Froogle search engine is, like GMail, still in beta after nearly 30 months of public consumption.

Like all Google properties, Froogle is ultimately designed to help you find the information you are looking for, whereas Yahoo is designed to be the information you are looking for.

At the End of the Day

As we mentioned earlier in this article, while both companies provide similar services, they couldn’t be more different. Yahoo’s service is itself, which is very profitable for Yahoo. Google’s service is finding information to other services. There isn’t much doubt that both companies will have a solid place in the future, as long as they can continue to bring in the visitors and continue to do what they do best.

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