Yahoo Could Have Owned Social Networking

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Get this. Yahoo owns tons of social networking sites. They own MyBlogLog, Flickr and Del.icio.us. They own Upcoming.org. They own Konfabulator, now known as Yahoo! Widgets which is not social networking but adds features for potential social networking applications. They own Jumpcut, the upstart video platform.

Yahoo partners with Zillow to provide estimates on real estate to Yahoo! Real Estate users. Single handedly, Yahoo dominates the fantasy sports market, a demographic that is fiercely loyal and extensive use type users.

To cap it off, Yahoo could have owned Facebook if it wasn’t for management dropping the ball. Given Facebook’s recent emergence, a $1B investment in Facebook would probably return to Yahoo 3-5 times over in the next 2 years in terms of Facebook valuation.

The problem with Yahoo, of course, is not Yahoo. Yahoo has certainly not helped itself. But as Elise Ackerman at the Merc points out, “…that Yahoo shouldn’t try to out-Google Google“.

Google is the king of search. It is the king of remnant advertising in terms of pure marketshare. It is the king of web-based productivity tools (Gmail, Documents & Spreadsheets, Calendar). Yahoo can’t compete on Google’s turf.

However, they can beef up their social networking and become the king of that niche. Web 2.0 is all about the mashup so Yahoo’s challenge is figuring out how to actually integrate all these social networks they own into a compelling product or group of products.

Incidentally, the buzz today is that Fox Interactive may be in talks with Yahoo to trade off MySpace for a 30% stake in Yahoo. There be dragons in those talks. Watch closely!

Comments

  1. says

    If yahoo bought facebook for 1 billion and not messed with it, let the founders implement their vision including the f8 apps, then yes. But I dont think they could have allowed that course. They would have messed with it like they did with flickr and face book would not be what it is today.

  2. says

    To be honest, I don’t think that MySpace is worth that much. I’d love to know how many *unique* (and real) people are actually using it regularly.

    If Yahoo goes the MySpace route, they should fix it up so that it’s a comparable product to Facebook. Right now, Facebook (imo) is totally winning out in every way.

  3. says

    Tamar: I have a post coming tomorrow morning that analyzes this rumored deal. You’ll want to check it out as I talk about what this deal would need to be successful.

  4. says

    Yahoo can’t out-Google Google; the question, for me, is if the social stuff can act as a new paradigm for using the web that beats search. I’m not sure it does. It’s useful, but it doesn’t monetize as easily, and it is by definition constraining rather than expansive.

  5. says

    My point is that they are two different areas. Google has little reach in social networking outside of youtube. It’s an area waiting to be exploited by one of the giants and yahoo is most poised to do so.

  6. says

    @Aaron

    “Google has little reach in social networking outside of youtube.”

    Well orkut.com practically owns the Social networking in India…… not even met one college guy whos joined facebook or myspace out here. With the worlds second alrgest population livin oblivious to myspace and facebook. Those highest subriber stats dont seem that mighty to me. Altho would agree that orkut is way behind in terms of features…but who knows..all it takes is one fine day..

  7. says

    You are so right about yahoo, they have admitted to dropping the ball on social networking.

    Bebo.com was another social networking site they have been rumored in purchasing, there was the failed Facebook deal, and now this rumored MySpace deal. I am interested to see if Google steps in with this though because of the deal they have with MySpace with their advertising.

    You are right about Orkut.com, it is HUGE in India. The features are horrible, like you said, I have tried to use it to review it and I have had nothing but technical problems with it.

    It will be interesting to see how this all plays out. I always wonder if yahoo is just going to acquire, blow up 360 and do it right, or just continually drop the ball.

  8. says

    Good points…Yahoo is playing catch-up when they shouldn’t have to. I expect them to overpay for whatever social networking service they end up with. Yahoo needs to make some moves, especially after Semel leaving.

  9. Deisha says

    Hey is Yahoo aquiring student based Social Networking site in India???? Heard Yahoo is in Negotiations with a competetor of Orkut.com in India. That site is a simple student site called bharatstudent.com. we dont know how yahoo tries to compete with Orkut which is already a leader in India using a start up site like Bharatstudent.com.