Yahoo!: more like human activity and less like software
I’ve been thinking about open systems, the Long Tail and branding a lot lately and Jeremy Zawodny’s talk at OpenTech2005 and some comments he made over lunch made me think that Yahoo! is a great example of a company where the brand is created through the customer, information and their filter [in this case their algorithm].
You hear about Yahoo! being a great company now, that the company follows a strategy of an open system from its technical innovation. I was sceptical that such a large company could be driven by it’s development teams. But it is. Jeremy Zawodny said that the technology team really does ‘lead’ the company’s strategic direction – they approached the senior management with what they wanted to do and the management were enthusiastic – they wanted to employ an open strategy but didn’t know how and were grateful for the development team to give them a solution. Now Yahoo! look to see how they can create ‘open’ systems from everything they produce. The different departments from around the world create products and [for now..] the team in California role it out in the developer network.
Why? Well, this seems quite straightforward. They want to get people innovating around their products to see what they can themselves produce, to see where the market can go, to get the early developers, the people at the ‘edges’ doing stuff which could potentially be mainstream – because the people at the edges are are usually those ahead of the crowd. And while many of the things at the edges will remain there we know that niche, Long Tail products are incredibly valuable, especially to a company like Yahoo!
There is a clear marketing and revenue model here. The marketing model is the blogosphere. Let developers in the Yahoo! network make products and generate a buzz about them which will reflect well on Yahoo! This innovative buzz seeps through into mainstream journalism and eventually the NASDAQ…
But so far that’s just paper money. Real revenue is harder to come by. Jeremy sees SMEs as providing the core market for new products – licensing services to this group could be very profitable but that needs to be done in a way that caters for their niche requirements at the same time as keeping the costs of personalising those requirements down. So they are speaking to and canvassing opinion from a number of smaller companies about their needs. Identifying generic core features, functions around a service and working our how that can be delivered to these SME’s.
Good ,yeah? yeah. But Yahoo! have, according to Jeremy*, recently added terms to their licence which will allow them to copy your prototype without you suing them. Of course that doesn’t mean they would but they can. So all those niche services and products being created by intelligent and industrious bedroom developers all over the world could become the potential products for the Yahoo! SME shop.
The Yahoo! model sits with the marketing model put forward by Chris Anderson. Yahoo! are a media company at the cutting edge of the industry. Their brand is their information, their service and much of that is provided by other small developers in the long tail, to the niche. Cumulatively these developers and invaluable marketing buzz… tipping the perception of Yahoo! from second rate internet company to leading edge innovative media giant.. it helps that their products match the hype. People live their products everday and they’re great.
How are Yahoo! looking to leverage their ‘brand’. Well, obviously through the service, through the information. And what is the information consist of? Data, metadata about the way things are described and used. Jeremy Zawodny’s talked a lot about how to utilise data in his OpenTech presentation. The data provided by others will, essentially, for the basis upon which they will build new services. Services such as:
- movie / tv ratings
- im networks and conversations
The majority of this data is implicitly trust worthy. They are the result of recommendations. But the recommendations may be private or retained within a community of users. Yahoo! and others have the potential to create shared social library’s. In other words the experience of using the internet becomes "more like human activity and less like software".
This makes a lot of sense – your activity becomes the social network. The community is the internet!
There are a lot of issues with attaining such a model – not least the unique identifiers of each asset [music track, artist, tv show, actor, etc] which Brendan Quinn mentioned in the Q&A with Jeremy at OpenTech and the standardisation around how they are themselves ‘identified’. Taking all that as a given 😮 the main issue will then be around trust. Who do you trust to provide this information? How do you ‘know’ the data is itself trustworthy? You don’t. You have to go with the filter you use – and the ‘brand values’ of ‘trust’. Who do you trust? Yahoo!? Google? the BBC? And to what extent?
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