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Answer by Igor Markov, EECS Professor at Michigan:
Yahoo started as a manually constructed list of links to websites and aspired to be a media portal to the web. The culture that developed at Yahoo apparently shortchanged engineering in the grand scheme of things; media people were viewed more important. At Google, engineers were first-class citizens, so Google attracted top engineers and could be very selective in hiring. Over the years, Google (and later Facebook) assembled a greater brain and skill capital than Yahoo. Google started later than Yahoo and viewed the core challenge as an algorithmic problem—finding the best websites through automated indexing and real-time search, not manual indexing like Yahoo. So, Google relied on automation more; used a memorable, minimalistic interface that didn’t require daily maintenance; focused on a better-defined objective; and leap-frogged the competition.
With a leaner operation, Google wasn’t hit as hard by the dot-com bubble bursting (the dot-bomb) as Yahoo. Facebook started much later; had a crisp goal; and also managed to attract great engineers, many from Google. Like Google, Facebook stayed lean for a while, remaining flexible and sensitive to what prospective customers wanted.
Lessons learned (for the long term):
- Focusing on one thing and becoming the best at it is important
- Effective automation beats manual labor
- Quality hiring and retention are important
- Lean operation helps survive in a slow economy
Google’s obsession with infrastructure and its data-driven culture of self-improvement were prescient. (Amazon is another example.) Reliable and scalable infrastructure is very attractive to engineers—it improves the learning curve, avoids routine, provides a valuable experience, and helps building résumés even when projects fail. It also makes possible acquisition more attractive to innovative companies that can leverage their technology at the Google scale.
Google realized this advantage early and made a number of strategic acquisitions, such as YouTube, the team that developed the Android OS, and more recently DeepMind. In contrast, Yahoo wasn’t as successful in acquisitions and their integration and missed many market opportunities.
Another lesson learned: Planning and optimizing for the large scale—data, processing, engineering, business, branding—ensures continuing innovation and helps capture new markets
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