Yahoo's Social Circle

In a bid to challenge search giant Google, the Web's most-used portal is betting on the wisdom of crowds

Yahoo! (YHOO) is on a quiet acquisitions tear. First, it snapped up photo-sharing site Flickr in March. In December, it acquired, a service that bookmarks and shares users' favorite Web sites. And on Jan. 6, Yahoo purchased WebJay, a site for creating and sharing music playlists. Over 10 months, Yahoo has acquired at least five fledgling Internet companies, all pursuing a similar goal: to build communities of Internet users that interact with one another over the Web.

What's afoot? These deals are key building blocks in one of Yahoo's biggest bets. By cultivating online communities -- and encouraging people to tap into the collective knowledge of these groups -- Yahoo is hoping to change the way people find information online. Known in industry parlance as "social search," it presents a significant departure from Google's (GOOG) main approach, which relies on complicated mathematical models to help users find sites.

Done right, the new method could help Yahoo take back share ceded to Google in search (see BW Online, 10/21/05, "Google and Yahoo!: Rolling in It"). Google snared 46% of U.S. searches in November, compared with 23% for Yahoo, according to Nielsen/NetRatings.


Search technology has improved dramatically over the past several years (see BW, 1/23/06, "Math Will Rock Your World"), but computer algorithms can only go so far in divining the intent of the user. That's because your typical Web user taps just a couple of words into the search box. Someone searching for "Mozart," for instance, could be looking for CDs, sheet music, history of the composer, or even the music-notation software that bears his name.

Social search tries to fill this information gap by gleaning input and preferences from the communities with which the searcher is associated. Someone seeking "Mexican restaurants," for instance, would arguably be better served by results reflecting preferences of people in the same neighborhood. Or a person searching for "scary movies" might prefer the suggestions of his or her circle of friends over those from whole Internet.

It could represent a monumental shift in search technology. All major engines analyze the link structure of the Web as a key ingredient in determining what pages are most relevant -- a breakthrough that Google championed when it launched in 1998. A Web page that has a lot of other sites linking to it will rank higher, figuring more prominently in a given search, than one with only a few incoming links. Social search aims to shift power from Web publishers, who create these links, to everyday Internet users by examining their bookmarks or giving them tools to express their opinions.


Current technology "delegates to Webmasters to decide what is important for the rest of us," says Bradley Horowitz, director of technology development at Yahoo. "Social search is about democratizing this power."

It sounds great, but there are plenty of skeptics. Most Internet users haven't even heard of Flickr or, let alone spent time sharing photos online or posting bookmarks of their favorite sites. Alexa Internet ranks as the 364,886th most trafficked Web site. (The Web address for fares better, but at No. 793 is still far from a household name.) Google is ranked third by the researcher.

Some question whether enough Internet users will spend the time on these sites needed to make them effective. The idea is to turn Web search from a passive activity to an interactive one, and the first major effort involves selecting a circle of friends. That means e-mailing people, inviting them to join a network, and responding to requests from others. After that, the more users interact with content, the more power social search will have.

But that could involve more time-consuming online activities, from simple bookmarking to labeling and reviewing Web sites. It's not clear users will make that kind of investment.

Others doubt the wisdom of crowds will offer much of an upgrade over the feats of raw computing power. "It really adds very little value to what is available now," says Raul Valdes-Perez, CEO of Vivisimo, which provides search technology to enterprises. "The best description of a document is the document itself."


Google, by most appearances, is also tepid on the prospects of social search. Sure, the search giant has developed and acquired social-networking sites, such as Orkut and Dodgeball. But it has done far less than Yahoo in the arena of online community building. Analysts take that to mean Google's long-term bet remains on personalization -- using its mammoth computing horsepower to sort through data and better discern what users are thinking. Google declined to comment.

Yahoo didn't invent social search. The idea of tapping the collective wisdom of communities has floated around academia for years. Startup Eurekster hit the market first with its social search technology in early 2004. Since then, several other upstarts have jumped in with different twists on the general concept, including Jeteye Technologies and Kaboodle.

But Yahoo represents its greatest opportunity for traction, due to its hefty $4 billion war chest and 200 million active registered users. If Yahoo can begin to entice its legions of visitors to try some of its community offerings, be it sharing photos on Flickr or listing favorite blogs via, it can begin to apply social search on a wider scale.


Currently, Yahoo is applying social search on a limited basis in its My Web 2.0 beta product. Users can save pages, as well as "tag" particular sites with descriptors such as "funny" or "research." These bookmarks and tags can be shared with others within a network of friends and contacts. Yahoo won't disclose the number of people using the service, but the site says that there have been 614,000 pages saved and 141,000 tags authored.

As with all community sites, the benefits grow with the size and activity of the group. That means Yahoo's social-search trial, still in its infancy, could take months or years before reaching its potential. "Social search is not one of these things that will take off overnight," says Forrester Research analyst Charlene Li. "It will take a lot of time to build."

Although far from a slam dunk, it appears a technology gamble worth the wait. Meantime, Yahoo -- with its unique vision for the future of search -- can at least relish the chance to emerge from Google's shadow.

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