Yahoo's Got An Answer for Google

By Ben Charny  |  Posted 2006-06-05

Yahoo's nascent Yahoo Answers feature may be just the thing to help Yahoo to take on a hard-charging Google and other competitors, believes Lehman Brothers analyst Douglas Anmuth.

Answers, which debuted in December, in theory allows anyone to mine the collective knowledge of Yahoo's 208 million active registered users. In practice, the feature allows people to pose a question at the Answers site to be answered by Yahoo visitors.

Anmuth believes the feature's got real, long-term potential to attract more users to Yahoo and keep them at the site longer. To Yahoo, that translates to more advertising revenues, the amount of which is impossible to predict at this early stage of the feature's life.

One of Anmuth's chief arguments is that Yahoo Answers is apparently the first of its kind from a major U.S. search engine, giving Yahoo "first-mover advantage," Anmuth says.

Also, traffic to the site has been growing at a rapid clip, nearly doubling since April, which if anything shows the feature is resonating with users.

Further down the road, Yahoo is likely to use the feature to wring more advertising dollars out of its Fortune 500 partners, Anmuth believes.

"Answers is worth keeping an eye on given its long-term potential," Anmuth writes.

To a large degree, Answers is merely Yahoo falling in line with the rest of the Internet search industry, which has been very hot for user-created content. The idea behind the trend is to create a unique data set that keeps people coming back for more.

Search engines aren't doing anything new here. But the user-generated features are now of note because of how the three leading search engines are now incorporating this newfound information into general search engine results.

Because more than 90 percent of all Internet searches are performed using Google, Yahoo or MSN, the audience for the material is going to be significantly expanded.

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