Over the coming days, weeks and months plenty will be written about what happened today.  Yahoo has officially entered an agreement to turn over their search engine (and all of the monetization of search results) to be handled by Microsoft using their relatively new Bing technology.

I watched Carol Bartz’s offiicial address this morning.  Although her demeanor was certainly polished and confident, I did sense a bit of resignation.  Afterall, Yahoo stood firm against Microsoft believing that the company was undervalued.  Now, it would seem, Yahoo has been distilled into what I have been saying it has always been— the most powerful destination site on the web.

But, there’s a second part to what I have been saying all along— and that is that no matter how good of a destination site Yahoo is, the revenue that comes with being a content site and not an advertiser platform is significantly smaller.  Thus, I expect it won’t be long before we see a leaner Yahoo altogether.  I feel for the staff who works to support search products, and the stress this must be causing you.

On a lighter note, in typical Yahoo versus Microsoft style, the homepages of each do seem reflective of the different takes on what is transpiring:

This morning, Bing features a bridge spanning two majestic and beautiful mountains (in Geneva, nonetheless).  I have no thoughts on what the dam might represent, except possibly Google:

While Yahoo has a lighter presentation on their homepage.  The image and story I was greeted with (sure it varies depending on the layout of your new Yahoo homepage) is about ‘armswinging’.  Saying that scientists have finally solved the mystery of why people swing their arms when they walk.  Well, Yahoo, that speaks volumes of the situation, in my opinion.  Microsoft is connecting mountains, and Yahoo is swinging arms.  I guess that would support what I thought I read as resignation in Carol Bartz’s presentation.

The new Yahoo homepage is truly Web 2.0… or Web 3.0, I can’t keep track of which version we are now on.  My initial reaction is that Yahoo has done a good job of achieving what their obvious goals were:

• Keep users on Yahoo pages by embedding content from other sites into the Yahoo homepage as ‘apps’
• Monetize page views of other sites’ content in those apps

I find it pretty incredible that the top 3 businesses in such a competitive marketplace have such a different approach to selling their products.  Google, Yahoo and Microsoft Live.com peddle more or less the same goods: search ads.  How they get you to that point, however, is very different.

Google decided long ago that the main page of Google.com would feature little more than the search box.  This seems wise, in my opinion.  Google does offer a lot of extranenous features and services, but the bulk of their revenue comes from one thing: search ads.  Why would Google want its users to do anything but to trigger those ads? 

For my screengrab today, Google was featuring Magritte’s birthday.  Classy, and appealing to their user base.

It only took a few years (decades in internet time) for Microsoft to figure out that Google had the right idea, and remove everything else from their site.  This change required (or enabled, depending on your opinion) rebranding MSN to be Live.com (in turn, they improved both their ad matching and ad serving capabilities). 

For my screengrab today, Live.com was featuring London.  I found the page very appealing, and aside from spending extra time on the site not searching, I give Microsoft credit for putting up something with such class:

Then, there is Yahoo.  Now, again and again I remind everyone that I am a diehard Yahoo fan.  I have stuck with them for years and years, and I will stick with them until the bitter end (which, by the looks of things lately might not be that far off).  Yahoo’s site seems to becoming sillier and sillier.

Today’s Yahoo homepage featured a photograph of man stretching to fit his mouth around a hamburger, and his date’s horrified reaction. 

So, here’s what I think.  It isn’t fair to compare these page, and here’s why:

Yahoo isn’t like the other two.  Yahoo is a content site.  I have been saying this for years, and Yahoo’s attempted deal for Google to serve their ads (failed) may be evidence that others are thinking the exact same way.  Yahoo’s value isn’t search.  Their value isn’t serving search ads.  Yahoo’s value is content, page view, readership.  Yahoo needs to refocus on serving effective ads on their content pages.  They should have beat Google to the browser punch, too.  That writing has been on the wall for years and years (think AOL, Prodigy, etc).  Instead of being a good site on the internet, Yahoo had the opportunity to be the “springboard” to the internet for millions of users. 

Now, it may be too late.  I’ll do whatever I can to support you, Yahoo.  But, at some point you are going to have to come to terms with what you are deep inside.  A content site.  With all those geniuses you have on staff, someone’s got to be able to see this and figure out how to monetize it. 

According to the latest Comscore data, Yahoo sites still generate the most unique visitors of any internet property (121,962,000 as compared to Google’s 85,685,000). 

This is no surprise, as Yahoo is a content play before anything else.  With thousands and thousands of pages of proprietary content, discussion groups, forums, email, and everything else under the sun, being a search engine has never seemed to be the biggest priority in Sunnyvale.  With all these page views— one would think that Yahoo would reap enormous revenues. 

According to Yahoo’s own finance page on their business, Yahoo posted gross revenues of $1,817,602,000 for the first quarter of 2008.  By dividing gross revenue by the latest Comscore data on unique visitors (extrapolated to be representative of the same 3 month time period), Yahoo appears to have grossed $4.96 per visitor per month.  And, using a 41.5% cost of revenue (calculated using data from the same balance sheet), that would effectively reduce Yahoo’s net profit to $2.90 per user per month.  Yahoo claims to average 3.4 billion page views per day.  That’s 102 billion page views a month.  So, if my math is correct, Yahoo makes about $0.017 per page view.

When you are talking about how much money you make per page view, less than 2 tenths of a cent per page isn’t too good.

Compare this with Google.  By the same calculation, Google posted gross revenues of $5,186,043,000 for the same period.  Divided by the number of users in the Comscore report, adjusted for time, that equates to $20.17 gross, or $11.90 net per user (profit margin being calculated in the same manner).  Good luck finding accurate page view per user data from Google— so, let’s just say it is 2.7B (thanks to SearchEngineWatch for the guess).  That means, by the same calculation, Google makes $0.52 per page view (that’s 30X more per page).

Now, I’ll be the first to admit that this math is absolutely and completely flawed beyond being in any way accurate.  It fails to take into account any variables that exist, including revenue from other sources (content network, partnerships to name a few).  But, I would argue that this analysis is “directionally correct” at the very least, if not true to scale.

Although terribly simplified, this analysis does illustrate the problem Yahoo has.  All the users in the world are worthless if they don’t generate revenue.  That’s why Yahoo’s stock is at $21.45 (as of June 22) and Google’s is $545.21. 

But, don’t count Yahoo out— it takes many years, millions of dedicated users, and billions of dollars to generate the depth of content Yahoo has across its properties.  Search is easy, serving ads is easy.  A recent deal with Google might finally give Yahoo the means to better monetize that traffic.  Combine that with true dedicated usership, and Yahoo still might have a chance to win in the end.

It is possible.

Here’s something you don’t see every day:

A San Francisco photographer posted pictures on Flickr (yes, Flickr and not Picasa) of the Google Maps “Street View” camera vehicle pulled over by the police in the Presidio.  It seems that a SF motorcycle cop found the enormous apparatus mounted to the roof of this lady’s Prius to be a little suspicious.  Either that, or she was speeding. 

I have always wondered what Google’s camera apparatus for Streetview looked like, and thanks to Damian Spain, now I know.  Some bloggers are speculating what the hardware included– with some convinced Google is working on collecting 3D data for some new functionality to add to Street View.

So, now we know what it looks like.  And, the next time you see a hybrid vehicle with a 5-foot camera array following you down the street, don’t miss your chance.  Do something visible and memorable for the camera, write down where you were when you saw it, and watch for it on Google Maps.  When else will you get a chance for such fame?