"We are content--that's what we are," said Yahoo CEO Carol Bartz at Tuesday's Web 2.0 Summit . "I think [we] went off track when people thought [Yahoo] was a search company."
There's no question that Yahoo was a search company--and it still very much is. Bartz said search still represents half the company's business, and it has roughly a 17% market share. But like many in the space, Yahoo isn't interested in fighting the behemoth that is Google. That war is far too costly to wage.
"It's a big capital expenditure problem--it's an arms race," explained Bartz, ticking off the endless back-end engineering needed to keep up with Google. "You're really in a constant battle."
Bartz's comments follow a recent decision  by Ask.com to cut about 130 engineers from its algorithmic search team. In an interview with Fast Company, Ask president Doug Leeds echoed some of Yahoo's troubles:
"Our innovations in algorithmic search were either being matched by other companies or copied by those companies, particularly Google. Everyone has the exact same, vanilla results--that battle has been won. It took [us] months and months, with dozens if not hundreds of engineers, and tens of thousands of servers, just to move that needle a little bit. We realized we could move the needle just as much, really more, by putting a lot fewer resources into a very different platform.
Yahoo faced a similar issue to us: People just weren't coming to Yahoo to use keyword search. If you're going to compete in search, you're going to have to create a completely leap-frogging technology, which Google can't copy. Well, there isn't a leap-frogging technology that Google can't copy. So you have to do something that Google wouldn't want to copy, or something that Google isn't interested in copying."
And that's exactly what Yahoo is aiming to do, by focusing on original content with the help of its recently unveiled Contributor Network . But that doesn't mean it's giving up on search.
"We're aligning with Microsoft," Bartz said with a smile, describing the software giant as a company still willing to invest its "huge pile of resources."