Here’s a rather interesting story where Yahoo’s new CEO Carol Bartz advises Google that they should be “diversifying”. I think this argument comes as a comedy because I believe Yahoo’s search market losses directly were affected by them diversifying Yahoo by spending money on companies that don’t make profits such as MyBlogLog and slew of others.
Apparently she thinks that her company’s far more successful web search rival needs to grow by the size of Yahoo every year in order to remain interesting. Given the rapidly diminishing size of Yahoo, that shouldn’t be too hard for Google to accomplish.
I have always felt that Google’s dominance in search engine market lead to their dominance in online advertising through Google Adsense/Adwords, which the author uses currently to make a living online.
Also, Google IS diversifying through their Android mobile operating system, which is becoming widely popular plus their purchase of the mobile advertising company AdMob could be pivotal in future “mobile” advertising, which is still in relative beginning stages.
A lot of people might also say Google’s YouTube purchase is not profitable (yet) but even YouTube is in hatching stages, it just started growing and Google is the right company to catapult it to another level. (Read my post on Future of YouTube)
Anyways, my advice to Yahoo, “focus” on search market and Yahoo will someday again be able to compete with Google. As for now, Yahoo has too much “portal”-like on their search engine, driving people to do other things than search.