Case Study Search engines Stewart Clegg You all use search engines, right? Today they are ubiquitous - or at least the notion of Googling is. A search engine is a program that searches the web for sites based on your keyword search terms. The engines before Google reigned seemingly supreme in much of the web outside China. Ones that we recall were Ask and Dogpile. Notablynone of these have become household names or verbs in the way that Google has. Its name, incidentally, is a creative spelling of googol, a number equal to 10 to the 100th power, or more colloquially, an unfathomable number. Today, most people we know use Google but there are still a few Yahoo users out there. Indeed, Yahoo was a precursor of Google. Yahoo was started in a Stanford University dorm room in 1994 and spent its first decade building scale as the Internet's portal. Then as Google and Facebook, two companies it nearly acquired, built lucrative footholds in search and social media, Yahoo fell behind the fast-moving Internet economy it helped create. In 2017 it ceased to exist as an independent company: it was bought by Verizon for US$4.48 billion. Verizon combined Yahoo and AOL as part of a new media and technology company called Oath. Go Online To understand the history of search engines have a look at WordStream's helpful timeline. See the timeline the Internet. Up until 2002 they did not have their own scarch engine but outsourced their search services. Google rapidly emerged as its main competitor using an algorithm-powered search engine that a on enabled people to find things more easily and quickly on the web. Yahoo eventually licensed Google's technology before turning to Microsoft's Bing. Doing so was an acknowledgement that it was not a scarch company in the same way as these companies, instead it was positioning itself as a content provider and destination capable of generating considerable traffic. A great chance was missed: in 2003 Yahoo had the opportunity to buy Google for US$5 billion but tumed it down. The then CEO of Yahoo, whose background was in Hollywood, would not pay any more than US$3 billion for what was still a start-up, whose future prospects were judged uncertain. Go Online An article about Yahoo's decision not to buy Google titled 'How Yahoo blew it can be found in the online magazine Wired, which recounts the effects of the period when Terry Semel ran the company Read the Wired article Go Online An article about Yahoo's decision not to buy Google titled 'How Yahoo blew it can be found in the online magazine Wired, which recounts the effects of the period when Terry Semel ran the company Read the Wired article Yahoo has had a number of dominant figures leading it over the years, but many did not have a clear understanding of or vision for the business. The co-founder Jerry Yang (who went on to invest in Chinese Internet giant Alibaba) did. It is not clear that Semel did. Scott Thompson was sacked for being economical with the truth about his CV. In 2012, Yahoo's board hired Marissa Mayer from Google to turn the company around. Mayer invested heavily in engineering and media talent but these investments did not pay off in the form of higher revenue. Frequent leadership changes meant constant changes to strategy and direction of the business. Yahoo failed to build their own successful mobile and social products or to acquire any. Yahoo saw the potential in social media and image sharing early, as it bought Flickr for US$35 million but never realized its potential as Facebook did with Instagram Yahoo is different from some other Silicon Valley companies, as Lee (2016) points out: The most successful companies in Silicon Valley - including Google, Facebook, and Apple - have an intensely technology-focused culture. These companies are obsessive about hiring the most talented engineers and in Apple's case, designers) so they can build the best technology products. And this culture tends to be self-perpetuating - very skilled, highly motivated people like to work with other very skilled, highly motivated people. Once you have a critical mass of such people it becomes easy to recruit more of them. Yahoo has never had the same kind f obsessive focus on recruiting technical talent. Paul Graham, a well-known Silicon Valley investor who sold his company to Yahoo in 1998, has written that even in the late 1990s, Yahoo was ambivalent about its status as a technology company. One of the weirdest things about Yahoo when I went to work there was the way they insisted on calling themselves a "media company Graham wrote. Yahoo employed a lot of programmers and produced a lot of software, of course and still does. But it never made software as central to its identity as some of its major . That's probably because at the time Yahoo was founded in 1994, no onc had ever heard of an ad-supported software company. Back then, software companies sold their products in shrink-wrapped boxes in computer stores. Yahoo had the same business model as CNN and the New York Times - build up a large audience and then make money by selling ads - so it was natural for Yahoo to think of itself as being in the same industry. But one consoquence of this was that Yahoo didn't focus as much as it could have on recruiting the best programmers (see Loc, 2016).

Question: Using the web, compare and contrast Yahoo's strategy with that of Google. Drawing on the resource and capabilities-based view of the firm and other approaches to strategy with which you are familiar, answer the question what, strategically, went right at Google and what went wrong at Yahoo? Source: this case was adapted from two news reports: Goel, 2016 and McDuling, 2016