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How were they to know that Netscape would turn out to be Microsoft's last victim?It would have been a clever move to pretend to be a media company to throw Microsoft off their scent.Users train the search: you can start out finding matches based on mere textual similarity, and as users buy more stuff the search results get better and better. I couldn't tell whether I was explaining it badly, or he was just very poker faced.I didn't realize the answer till later, after I went to work at Yahoo. The reason Yahoo didn't care about a technique that extracted the full value of traffic was that advertisers were already overpaying for it.Which caused yet more revenue growth for Yahoo, and further convinced investors the Internet was worth investing in. But they had the most opaque obstacle in the world between them and the truth: money.When I realized this one day, sitting in my cubicle, I jumped up like Archimedes in his bathtub, except instead of "Eureka! "Both the Internet startups and the Procter & Gambles were doing brand advertising. As long as customers were writing big checks for banner ads, it was hard to take search seriously. Hackers But Yahoo also had another problem that made it hard to change directions.The cubicles were full of programmers writing code, product managers thinking about feature lists and ship dates, support people (yes, there were actually support people) telling users to restart their browsers, and so on, just like a software company. One reason was the way they made money: by selling ads. If anyone at Yahoo considered the idea that they should be a technology company, the next thought would have been that Microsoft would crush them.
Revenue Loop was the optimal sort for shopping search, in the sense that it sorted in order of how much money Yahoo would make from each link. Ranking search results by user behavior also makes search better. I was showing him technology that extracted the maximum value from search traffic, and he didn't care?But there was another source even more dangerous: other Internet startups. " I said "Oh, ok." Because I didn't realize either how much search traffic was worth. If they had, Google presumably wouldn't have expended any effort on enterprise search.By 1998, Yahoo was the beneficiary of a de facto Ponzi scheme. One reason they were excited was Yahoo's revenue growth. The startups then used the money to buy ads on Yahoo to get traffic. If circumstances had been different, the people running Yahoo might have realized sooner how important search was.They'd been thrown off balance from the start by their ambivalence about being 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." If you walked around their offices, it seemed like a software company.