Why Yahoo wants to sell Delicious [its just business, they are not really fools or knaves]

There has been much wailing and gnashing of teeth after Yahoo announced that it is planning to sell the online bookmarking service Delicious.

The plan has not gone down well with the blogosphere and Yahoo have been called fools and/or knaves for wanting to divest Delicious.

Nobody has asked the following questions -

1.  Why did Yahoo buy Delicious?

2.  Why do they want to sell it now?

3.  Who might want to buy Delicious?

4.  Why do companies like Yahoo and Google offer free online bookmarking services, RSS aggregators and blogging platforms?

Let me venture some answers.

Why did Yahoo buy Delicious?

Yahoo bought Delicious to improve the performance of Yahoo Search. Algorithms are all well and good in selecting the pages to return in response to a search query, but they can be fine tuned by some human input. If you are running a search engine you would like to have an army of little elves to search the web and select the best links so you can feed their finds into your search engine. You could pay elves to do that, but they are expensive. A cheaper solution is to build or buy a bookmarking service and note what people are bookmarking.  Bingo, you have a free human powered search engine working for you in return for proving the searchers with a free bookmarking service.

Why do they want to sell it now?

Because they have stopped running their own search engine. Yahoo Search is now powered by Bing. There is no longer a business case for operating Delicious. Yahoo are not selling Delicious because they are stupid or evil. Its just business.

Who might want to buy Delicious?

Some big company who is very keen on search and does not have a bookmarking service [well, they do, but it is crap]. Can you guess who they are?

Why do companies offer free online bookmarking services, RSS aggregators and blogging platforms.

The business case for running RSS aggregators is the same as for bookmarking. If you run a service you can watch which feeds people subscribe to and which items they read.  You then feed their choices into your search engine. That is why Ask had Bloglines [and dumped it when they gave up search] and Google has Reader.

So, why does Google run Blogger?  Well, it is connected with search, but in a different way. Google runs Blogger so that people will create content and give Google Search users good stuff to find.  The more good stuff people find the more they use search.

That is why companies spend money running these free services. It is because they make money from search.

No comments: