Yahoo Channelizes to Battle Microsoft, Ichan

Yahoo is getting bossy
in its battle to stave off Microsoft’s takeover ambitions. According to
published reports, Yahool is launching its “build your own search service”
project—or BOSS—through which it will partner with third-party search engines to
take share away from Google.

In other words, Yahoo
is building a search channel.

It’s an ingenious
solution to the Microsoft cloud that Yahoo and CEO Jerry Yang just can’t get out
from under. Even as Microsoft CEO Steve Ballmer continues to play coy about
whether his company is still interested in buying Yahoo, renegade investor Carl
Icahn continues to press for a deal because of Yahoo’s perceived weaknesses to
Google in the market.

 By opening its search platform and vast data
center capacity to smaller search engine companies, Yahoo believes the whole
alliance will be greater than the sum of its individual parts and able to
represent a larger offering than Google, the world’s largest search engine, or
Microsoft, the number three search player.

"Today, the search
market is generally limited to three major search engines to drive innovation
and growth," said Prabhakar Raghavan, chief strategist for Yahoo! Search, in a
statement. "BOSS opens up the playing field for developers and companies to
disrupt the search market, become principals in search and build new Web search
experiences that offer more choice for users."

Yahoo and Google are
not strangers to the channel. Google has been selling its search appliance
through channel partners for several years. Google is also working with partner
OEMs and software companies—such as Business Objects (now owned by SAP)—to
incorporate its search technology into their analytics applications. And Google
has allowed partners to customize its search results.  Yahoo has long worked with developer partners
to create tools and applications for its vast network of portals and Web
sites.

What makes Yahoo’s
BOSS different is the opening of search code and data center capacity to
third-party search engines. According to the New York Times, Yahoo estimates the cost of building a search business at $300
million – an investment that is prohibitive give that Google owns nearly
two-thirds of the market and continues to take share away from Yahoo and
Microsoft Live. By opening up its code and platform, Yahoo is betting that its
partners will grow faster. While this strategy has the potential for taking
share away from Yahoo, too, Yahoo executives believe Google will be hurt more
because of its larger presence.

Details of how the
BOSS alliance will work or distribute revenue opportunities are still being
worked out, but the concept is sound. Microsoft was built on the development of
a vast array of channel partners comprised of resellers, solution providers,
distributors, developers and independent software vendors. Google is attempting
a similar strategy with Android, its project to develop mobile applications for
cell phones. And Salesforce.com extended its reach with its AppExchange network
of developers who build modules that augment the functionality of its CRM
software-as-a-service offering.

Yahoo and its future
partners still need to overcome a problem that plagues everyone going up against
Google: breaking user search habits. Several reports have cited that even Yahoo
users (myself included) will use Yahoo portal for news and e-mail, but then go
to Google for search. The phenomena explains why Yahoo is the world’s largest
source for news distribution (36 million unique visitors monthly for
news).  Google is a hard habit
to break; perhaps the channel is the antidote.

LawrenceM. Walsh is vice president and group publisher of
Channel Insider. How are you building the next generation network: with or
without cable? Share your experiences with Larry at lawrence.walsh@ziffdavisenterprise.com.