The following line in Charlene Li’s post on the Yahoo! acquisition of del.icio.us stood out for me. Charlene:
“The acquisition by Yahoo! is significant for much the same reason why it bought other social computing darlings, Flickr and Konfabulator – Yahoo! is laying the groundwork for its users to add, personalize, and contribute their content and votes to the Web.”
Follow my reasoning here, and I’d love your thoughts.
- One: With telcos, a significant strategic advantage goes to the provider who controls the “last mile” – the access to the consumer’s home (“consumer” used thoughtfully here). In traditional media distribution, the “last mile” is a strategic bottleneck, and whichever entity controls it has disproportionate control over its competitors (and customers, as well). In times when “content” only flows one way, downhill, those bottlenecks are critical.
- Two: There are a variety of ways to try to control the last mile. For example, Google’s trying to do it via setting up wireless networks. Others try to control the physical lines themselves, the access to those lines, and so forth.
HOWEVER…with user-created content (be it in the form of blogs, photos, tags, what have you), it’s now a two-way content flow. It’s not just one way “down the pipes,” but also from those myriad “endpoints” back into the pipes.
- Three: Perhaps, therefore, it’s not just the “last mile” that matters, but also the “first mile” as well. That is, whomever controls the access to the means of user production of content will have symmetric power to those who control the “last mile” of the distribution mechanism.
Telcos are fighting over the last mile. Google wants to set up the GoogleNet and control the last mile.
The question: Is Yahoo! doing a strategic end-around, and trying to gobble up the significant “first mile” technologies? What would be the strategic advantages?
- Whomever controls the first mile gets “first look” at any new content
- Whomever controls the first mile can optimize the indexing of new information as it is created
- Whomever controls the first mile doesn’t need to “crawl” those sites anymore…the first mile provider gets perfect visibility into the nuggets of user-created gold as they are created…
Hmmm…
Hmm, this is a very interesting idea. Most of what I have seen about the deal is either people who love it, mostly because they already love Yahoo!, or people who hate it, mostly because they hate Yahoo! I personally have a bit of mixed feelings about it, given that Yahoo! has not exactly been a darling everytime they acquire something. Just because they acquire it, it does not mean it will get better. At any rate, I found your idea intriguing, a nice different look. Thanks for the food for thought.
Thought provoking. I agree with you that this helps to explain Yahoo!’s recent acquisition strategy. By being a content creator (or at least hoster) they do have a significantly more control and a greater strategic edge than those who simply index sites.
It is worth noting that Blogger remains the most popular bloghost around though, and it’s owned by Google. This may be a one-off however, and content hosting (as opposed to indexing) doesn’t appear to be their paramount priority. That hackneyed expression that “content is king” doesn’t seem likely to be disporived any time soon.