Yahoo Crawls Out on Social Web Limb

Yahoo (Nasdaq: YHOO) has rolled out a platform for third-party developers to build applications and widgets for its portal. Called "Y!OS," it is part of Yahoo's larger Open Strategy -- a go-to-market approach the company unveiled earlier this year with the goal of becoming a more inclusive -- and more trafficked -- Web site.

"We're officially cutting the ribbon for talented developers everywhere, who are now welcome to come in and access our tools and data so they can build applications for a more customized, social and relevant Yahoo network and beyond," Jay Rossiter, senior vice president of Yahoo's Open Strategy, wrote in a corporate blog post Wednesday.

Yahoo did not respond to TechNewsWorld's request for an interview.

As developers begin to dig in and build their applications, Rossiter said, users will be able to connect at even more granular levels with other Yahoo members. "At a high level, we're rolling out a social platform that will draw on the hundreds of millions of connections on Yahoo -- everything from random encounters with someone who commented on the same photo as you, to deep connections you have with friends who know nearly everything about you. By using the social contacts you already have on Yahoo -- through Mail, Messenger, Flickr, Finance, Fantasy Sports, etc. -- we'll make those social connections more active and useful."

Externally developed applications built into a particular Yahoo service are coming soon, he promised. Until then, users are most likely to discover these new apps either through a friend's invitation or via an announcement in the Profile or Messenger updates feed that a connection is using a new app.

New Changes

Other developer-friendly changes to the platform include more transparency, so users can see what friends are doing both on and off the portal -- such as commenting on a blog post, for example. "Basically, we're letting developers centralize anything you do on the Web as an update on our platform -- with your explicit permission, of course," Rossiter wrote.

Yahoo has also begun to consolidate a user's activities onto a new, single profile that includes a control panel for managing the new open applications and the social connections.

Yahoo also has made address books portable, Rossiter continued. "Even beyond the Address Book, we've built the whole system with the mentality that any personal data that you put into Yahoo is inherently your data; you own it, and you can give it to anyone or take it anywhere you would like."

The site has also introduced new customization and connection options.

Incremental Improvements

From a tech perspective, what Yahoo did is not very revolutionary, said Jeffrey McManus, principal with the consultancy Platform Associates and one of the cofounders of the Yahoo developer network.

"The vast majority of what they are announcing is not new," he told TechNewsWorld. "In a few cases, they are providing new interfaces on top of functionality that is already there." In fact, he added, some of what Yahoo rolled out Thursday had its origins in work McManus did while he was with the developer network.

Not that these changes will fall flat with the user base, he said. "I think building applications that run within Yahoo is an interesting proposition -- and the Yahoo profile concept should attract new or more loyal users."

From a developer perspective, though, these changes will not help Yahoo offer itself as a compelling destination, McManus concluded, which is one of its chief goals.

Still, Yahoo has little choice but to strive for that goal, said Tom Zawacki, cofounder and CEO of Lemonade, a site that enables individuals to set up a digital lemonade stand on their social networking profile, blog or personal Web site to sell personally selected products or services.

"Yahoo is grappling with a number of trends that is changing the game for it," Zawacki told TechNewsWorld. Increasingly, consumers -- or rather, content authors -- are influencing what products and services their friends buy and use. Also, the Internet economy in general is rapidly morphing into a social economy -- an environment in which communities, as opposed to individual Web surfers, are the dominant players.

"These people are the bread-and-butter for large destination sites -- the Yahoos of the Internet have lost 10 percent of their traffic to blogs over the last few years," said Zawacki.

The User Perspective

Leaving aside tech and business considerations, the changes will no doubt be welcomed by a user base primed for as much interaction as Web 2.0 technology can deliver, Robbie Kellman Baxter, principal with Peninsula Strategies, a consultancy that has advised Yahoo, told TechNewsWorld.

"What it should mean is more services that integrate with Yahoo's core offerings," she said. "Facebook has been tremendously effective at attracting other developers who create content for Facebook Users -- enabling them to play games, incorporate photos and videos in cool ways, or share information about their taste in movies, books or video."

In theory, Baxter explained, everyone wins from open architecture: The users get more services and content; the platform owner gets all kinds of product development that makes their users happy and increases participation; and the developers get access to a huge audience for their content and services.

Social Laggard

Indeed, given the advantages to these stakeholders it is curious that Yahoo is lagging behind other social network providers in opening its platform.

Such a move, though, entails a lot of risk along with potential reward, Baxter said.

Of the three groups -- users, platform owners and developers -- the platform owners bear the greatest risk. They risk introducing their audience to other services and potentially losing them to competing vendors.

In addition, by opening their platform, they lose control over the user experience and may end up with unhappy customers whose complaints are costly and difficult to resolve.