Wednesday, August 30, 2006

The secret to Yahoo Answers' success
The search giant has stumbled lately, but its popular Q&A service shows that getting people to create their own content can really pay off.

By Susanna Hamner, Business 2.0 Magazine

(Business 2.0 Magazine) -- There are a few clouds gathering around Yahoo these days. The Internet star's delay in rolling out a crucial new advertising system sideswiped its stock price in July, and investors remain jittery about its prospects against Google, Microsoft, and other rivals.

But one ray of sunshine is beaming at the company's Sunnyvale, Calif., headquarters: Yahoo Answers.

An online Q&A service, Yahoo Answers has become the second most popular Internet reference site after Wikipedia, according to Comscore. In June, Yahoo Answers attracted 12.3 million unique visitors, a 35 percent spike from the previous month. (For comparison, media sensation YouTube had 13.4 million visitors in June.) During the same period, 947,000 people clicked on Google Answers, down 4 percent from May.

The secret to Yahoo Answers's success?

Get your tens of millions of users to create your next hot product - and then give it away. On Yahoo Answers, anyone can ask any question, from the inane to the articulate, and get a response from, well, just about anyone. For free. It's a MySpace for know-it-alls and the perpetually clueless.

Peer content production

Yahoo (Charts) Answers is another example of the so-called peer production trend. Google (Charts), on the other hand, has taken an old-school approach, deploying more than 500 "carefully screened researchers" who answer questions if they like the price the asker is willing to pay. Some answers cost as much as $200.

The give-and-take on Yahoo Answers is decidedly more freewheeling and seems to be connecting with the hordes of young Web surfers increasingly accustomed to user-generated content that costs nothing.

Take the woman who recently sought advice on losing weight. Within five hours she received 21 responses, most sincere, notwithstanding the occasional juvenile gibe. Since the site went live in December, more than 30 million answers have been posted in the United States.

"Yahoo has been rapidly losing market share in search to Google," says Jim Friedland, senior Internet analyst with Cowen & Co., "so this is a clever way to get people to interact with the site."

John Cocozza, a Matawan, N.J., financial adviser, spends an hour every evening answering questions. "And I enjoy getting answers as well," he says, "because I receive multiple perspectives rather than the often irrelevant links a traditional search engine provides."

Of course, you might not want to take advice from Stinkydirtball or Sexymommy79, to name two recent Yahoo answerers. To manage any credibility gap, a Yahoo review team deletes inappropriate answers. Coming soon: an eBay-style system to let people rank individuals on the quality of their answers.

Will Yahoo Answers and its unpaid legions of content contributors ever amount to a significant weapon against the likes of Google and Microsoft (Charts)? The company won't break out revenue for the service, but Bradley Horowitz, Yahoo's VP for product strategy, says it will soon feature more advertising. The site currently sports only small text ads. Not for long. On the way are graphical ads that let major brands sponsor specific categories.

But maybe the site's profit potential is a question better put to Yahoo Answers. Who knows, Yahoo CEO Terry Semel might just give you the answer.