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

by Ben Elgin

Yahoo! (YHOO) is on a quiet acquisitions tear. First, it snapped up photo-sharing site Flickr in March. In December, it acquired del.icio.us, 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.

BOOKMARKS AND LINKS.

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.

TIME-CONSUMING PASSION.

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 del.icio.us, let alone spent time sharing photos online or posting bookmarks of their favorite sites. Alexa Internet ranks del.icio.us as the 364,886th most trafficked Web site. (The Web address for del.icio.us 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.