ALKHOBAR, 29 April 2008 — Yahoo! CTO, Ari Balogh, introduced the Yahoo! Open Strategy (Y!OS) in his keynote last week at the Web 2.0 Expo in San Francisco. Y!OS will harness what Yahoo! considers its “unique strengths” to fundamentally transform the user experience. According to Yahoo!, those strengths are its rich and relevant user experiences, an audience of half a billion users per month and the content that it controls. The plan is to open all of these to the innovations of the developer community in order to enhance the Yahoo! experience.
The Y!OS platform will centralize the user profile and social data in one place on Yahoo! and make it available across Yahoo! properties and accessible by developers outside Yahoo!. The goal is to create a standard way for developers to build extensions (applications) into Yahoo!’s most popular websites and standardize Yahoo!’s web services so it’s easier to turn them into mashups and apps. The bottom line is that with Y!OS, the company is moving from a model in which each Yahoo! property develops much of its own technology, to one where common data and frameworks are shared. Y!OS will allow developers access to these assets, build applications around them, and then get distribution on Yahoo!’s popular properties and/or use them on other websites.
Cody Simms, Y!OS Product Management, indicated that Y!OS includes:
*A Single Social Platform for Yahoo!
*Standardized Web Services.
*The Yahoo! Application Platform (YAP)
The first version of (Y!OS), including the social graph and tools for developers, will be rolled out later this year. Learn more about it at: http://developer.yahoo.com/.
Y!OS was the second major strategy announcement that Yahoo! made in a month. At the beginning of April in a keynote at CTIA Wireless 2008, Yahoo!’s Marco Boerries, executive vice president of Connected Life, had articulated the company’s strategy to foster the mobile ecosystem and extend Yahoo!’s leadership in mobile. Boerries explained that Yahoo! has spent the past three years aggressively rolling out a comprehensive offering targeted at addressing primary needs of the mobile ecosystem including consumers, developers and advertisers.
“We all agree that the mobile Internet opportunity is massive. The key question is how to enable the supporting mobile ecosystem in order to realize its full potential,” said Boerries. “With Yahoo!’s technical expertise, monetization experience, and strength in developing innovative popular consumer services, we believe we are extremely well-positioned to be a positive driving force. We are playing an increasingly essential role in helping the ecosystem’s constituents overcome some of the biggest challenges that have limited its growth to date.”
For consumers, this year Yahoo! has announced several services and initiatives that are aimed at accelerating the growth of the global mobile ecosystem, while becoming the starting point for the most mobile consumers. These include:
*Mobile Homepage — a personalized, dynamic, essential starting point to the mobile Internet.
*Yahoo! oneSearch — mobile search providing instant answers to any query, not just web links. A new version, Yahoo! oneSearch 2.0 has just been released.
*Yahoo! oneConnect — an all-in-one communications application offering giving users a way to keep in touch with the people they care about.
*Yahoo! onePlace — a content management application letting users keep tabs on everything they care about all in one place.
Yahoo!’s frantic focus on new strategies creates a bizarre contrast to the company’s total silence on Microsoft’s merger offer. The latest deadline to accept the Microsoft offer has passed and the next move in the Microsoft-Yahoo relationship will depend on which course of action Microsoft CEO Steve Ballmer pursues. It was thought that Microsoft would ramp up for a hostile takeover of Yahoo! but that plan was put in doubt by comments Microsoft’s chief financial officer Chris Liddell made during the company’s earnings conference on Thursday.
“With or without a Yahoo! combination, Microsoft is focused on the online advertising market, which is expected to double by 2010, to $80 billion. Although Yahoo! would accelerate our efforts, we have an existing strategy that is already centered on three key pillars...With respect to Yahoo!, we’ve been clear, as is evident from the size of our offer premium, that speed is of the essence for the deal to make sense and get folded into our online strategy. Unfortunately, the transaction has been anything but speedy and has been characterized by what would appear to be unrealistic expectations of value. Our initial offer was extremely generous, more than a 100 percent premium for Yahoo!’s core business, and our view on value is shaped by the long-term value of the company, and we intend to remain disciplined in our approach,” said Liddell.
“The strongest argument that I’ve heard on why we should increase our bid — simply that we can afford to — is not one that I favor,” he continued. “We’ve yet to see tangible evidence that our bid substantially undervalues the company. In fact, we see the opposite. Yahoo! continues to lose search share, and profitability continues to decline year-on-year. The results that they announced on Tuesday were in line with the guidance that they gave on their last earnings call, on January 29, after which their stock price closed at $19.05, and Wall Street analysts’ consensus on value was significantly decreased.”
Lindell concluded, “As outlined in our recent letter to the Yahoo! board, unless we make progress with Yahoo! toward an agreement by this weekend, we will reconsider our alternatives. We will provide updates as appropriate next week. These alternatives clearly include taking an offer to Yahoo! shareholders or to withdraw our proposal and focus on other opportunities, both organic and inorganic.”
What next? We all just wait for Steve Ballmer to click “Play,” and resume the game.