cutting search, the smart thing to do.

These past few days, the internet has been filled with news of the so called “passing” of, how it was defeated by the all powerful Google, but I don’t know if it is just me, or maybe I’m missing something, but I think that this is actually a good thing.
Let’s get a few things straight, first of all, is not shutting down, as I understand it they are just backing off from the search engine business model and the “race” against Google and Bing, which, truth be told, it never was really a race. After all, they only had like 2% of the market share.
So, why this is a good thing? Well, if we do a little history launched in 1996 and, they didn’t start as a search engine, they started as place to go if you wanted answers to certain questions, and back in the day they used the image of Jeevees, as the smart butler answering the questions.
In that process their business model started to shift and they decided to go into the search-engine business and they were quite innovative during their first years, implementing some of the ideas that today we already got used to. But still they had to compete with Google, also Yahoo!, and now Bing, to whom Yahoo! already gave its search related business.
So, if we review it, they went to a successful Q&A site (even their name is, to a lesser-known search engine, to then being bought by IAC for $1.8 billion in 2005.
Still not sure why this change is the best idea? Here is another piece of information.
Earlier this year announced the launch of a new question and answer service (currently under a private invite-only beta), that mixes results from their search engine, with answers the company found on other Q&A sites, and the ability to address questions to the community directly. In other words, they are going back to what they do best.
To put this in context, Google bought a company called Aardvark to enable this same service for them, while was always about Q&A.
So basically, instead of being a mediocre company in several areas, like Q&A servicesSearch engines, and so on, they are going back to what they DO best, so they can BE the best in what they do. For those of you that were around in the 80s and 90s think about what Jack Welch did forGeneral Electric (GE), which was taking a mediocre company in I don’t even know how many industries, and make them the biggest company in America doing very few specific things extremely well.
Let’s put this in numbers, by 1980, the year before Welch became CEO, GE recorded revenues of roughly $26.8 billion. By the year 2000, before he left, the revenues increased to nearly $130 billion. So, by the time Welch left the company, it went from a market value of $14 billion to one of more than $410 billion at the end of 2004, making it the most valuable and largest company in the world.
How did he do it? Simply pu, he cut off all the fat. By the time he was CEO of GE, the company was so spread out in so many different markets that it was doing some what average revenue in lots of He was famous for it to, shutting down factories, and business units, firing people left and right, and he took a lot of heat from it, at first. As soon as the cash started flowing in, executives, investors and shareholders were all giggles and smiles.


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