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Yahoo’s Web 2.0 Pursuit

Yahoo continues acquiring new companies. Now it’s opening up some of its source code as well.
October 2, 2006

Yahoo is on a spending spree, purchasing small technology companies that specialize in Web 2.0 applications–the software that allows users to not only interact with media, but also create their own media. However, its moves may signal the beginning of a much larger effort to mine user data, creating a hybrid “push” experience for users.

First things first, though. Business Week has an article that outlines Yahoo’s current strategy to acquire small media businesses that offer users the ability to easily create and upload media. Within the last year, Yahoo has acquired Flickr, De.lic.ous., Upcoming, and JumpCut, while continuing to pursue the purchase of social-networking site Facebook.

All of these acquisitions point to Yahoo’s changing strategy about user interactions online. From the BW article:

Each conquest is aimed at bringing in additional tech know-how, targeted audiences, and features that will engage users longer. In the short run, the acquisitions should deliver on those assurances. “It will certainly help them grow,” says American Technology Research’s Rob Sanderson.

But Yahoo isn’t just hoping that its visitors will use tools to create media. They also announced they would open up a portion of the source code for Yahoo Mail, allowing developers to build new software add-ons and features. The idea: let users respond to deficiencies more quickly, creating a better user experience.

From the BBC News article:

Although Yahoo plans to keep control of the code that deals with user names and passwords, programmers will be able to tinker with almost every other part of the e-mail reading program. Yahoo Mail has more than 257 million registered accounts.

The initiative could result in new looks for the Yahoo e-mail reader, innovative ways to display messages to get a quick idea of message contents, or a series of add-ons that do more with the information found in mail messages.

So what’s the ultimate goal? Surely having users spend more time on their site is an exciting possibility for Yahoo. But we’ve lived through the “sticky” years already; just having people on your site isn’t a recipe for making money. Today, it’s all about analytics, those pesky numbers that break down users into their simplest components (you went here for this long and did these three actions before moving here).

Yahoo’s next move, like any big media operation, is understanding and targeting those users. Jeff Morris at TechWeb has a great article about how Web analytics is helping shape, among other things, the Web 2.0 movement.

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