December 12, 2005

On Friday, Yahoo acquired the bookmarking site Del.icio.us.

Specific financial terms of the deal weren't disclosed to the media.

Yahoo's acquisition comes less than a year after it acquired Flickr, an online photo-sharing site that derives its value from user interaction.

Launched in 2003 by Joshua Schachter, Del.icio.us uses a non-hierarchical keyword grouping system whereby users "tag" each of their Web bookmarks with a set of chosen keywords.

For Yahoo, Del.icio.us and Flickr represent an alternative approach to traditional Web search and its reliance on computer algorithms to determine relevance, said Eckhart Walther, vice president of product management at Yahoo Search.

"We now see search and online communities at the heart of our mission," Walther said.

As with Flickr, Yahoo will support the growth of Del.icio.us as an independent entity--helping to scale the site's infrastructure to meet demand--while using Del.icio.us' resources to enhance new and existing Yahoo products.

"Don't be surprised if you see My Web and Del.icio.us borrow a few ideas from each other in the future," wrote Jeremy Zawodny on the Yahoo Search blog on Friday.

Zawodny was referring to My Web 2.0, the "social search engine" that Yahoo! launched over the summer, and is based on a page-ranking technology that organizes pages based on a user's search patterns as well as "the shared knowledge of the people they trust."

As in the case of Flickr and Del.icio.us, Yahoo has developed a reputation for acquiring promising startups for their devoted community of users as well as their intellectual property. Flickr's team, for instance, contributed significantly to the look and communal sensibility of Yahoo Answers, a new question-and-answer site that launched last week.

By design, Answers is more conducive to common language and human intuition than your average search engine because it is powered by people.

One challenge for Yahoo when buying a community site is not alienating its members in the process. At Flickr, there was an initial backlash against Yahoo! ownership. "The Flickr folks said: 'We're going to Flickr-ize Yahoo!' when we acquired them," said Walther.

But since then, Flickr has grown its audience, with unique monthly traffic surging from 874,000 in February to 3.1 million in October, according to Nielsen//NetRatings.

Source: MediaPost

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