Fortune held its high-profile iMeme conference last week, which is billed as venue to bring together the “Thinkers of Tech.”

I found the substance of the conference lived up to its aspirational billing. Many factors influence the utility of an event including the speaker line-up, topics, format and quality of the audience. This event rated highly among those criteria. One additional consideration was the moderation style, lead by Fortune reporters, who often didn’t refrain from asking tough questions and probing into sensitive but relevant issues. Fortune played to its strength by leveraging the journalistic voices of its staff to drive meaningful dialogue amongst panelists.

This approach made for a very lively session on the search business, where rival companies were assembled to speak about business strategy. The search panel included Sheryl Sandberg (Vice President, Global Online Sales and Operations) from Google, Jeff Weiner (Executive Vice President) from Yahoo, Yusuf Mehdi (Senior Vice President and Chief Advertising Strategist) from Microsoft and Jim Lanzone (CEO) from Ask. Herding the first three companies onto the same stage in the current market environment is as close as you can come in business to pure theater. While these executives are too polished and experienced to draw direct comparisons to each other’s businesses, it’s not too difficult to read between the lines and get a glimpse into how these companies are framing high-stakes competitive dynamics.

Each company discussed current initiatives. Google didn’t share much new perspective, except to say that users still only receive a small portion of their daily information from Google despite it’s dominance, meaning more of the world’s information needs to be brought onto the web. “We think there is a long way for us to go,” said Sheryl Sandberg.

While Yahoo and Microsoft may have conceded this round of the battle, they have several initiatives in the works, some of which were explained.

Yahoo spoke in some detail about three vectors of its competitive strategy. These included focus on 1) insights; 2) content; and 3) working with third-parties (video and newspaper consortiums are two example). By insights, Yahoo means using algorithms to bring more ah-ha moments (my words) to users. Yahoo is unique from other players partially because of its rich content heritage. It’s banking on a strategy to get users more engaged with this content by making it more accessible through improved relevancy to browsing. The focus on content (and intelligent organization of it) seems to be driving Yahoo’s latest positioning which became public a few weeks ago when it claimed “Search is History.” There is some strength to this message because search is a means to an end whereas the ultimate user need is content. Yahoo hopes to drive engagement with its content by cross-promoting it in ways that make it easier to get to relevant information (e.g., connect related facets of different content). This could mean using people in a formal or informal social network to make interesting browsing associations and divine recommendations. Those who know people at Yahoo can see that the company is committing significant resources on projects of this ilk. Overall, it’s seems to be a very sound and logical way to “change the rules of the game.” I don’t see how the company’s strategists could have figured out a better way to play to disruptive strengths better than Jeff Weiner articulated. At the same time, while the approach makes sense, Yahoo’s primary weakness may be less strategy-driven and more a function of organizational inertia. The company is somewhat bureaucratic and less streamlined than it may need to move in a singular direction.

In a separate but very revealing comment, Jeff mentioned that Yahoo products and services account for 13% of time spent online by the domestic population. Considering the scale of the web (13bn pages), that’s not only sizable but unique.

Microsoft was more high-level about its game plan but Yusuf Mehdi did mention three aspects of the business plan: 1) portal; 2) advertising; 3) platforms. By portal, Yusuf said Microsoft had an advantage by putting together search with other services like email, content channels, messaging, etc. In terms of advertising, Microsoft offers search, display and interactive TV advertising vehicles. Could this breadth give it an advantage with the marketing community? There is certainly value in one-stop shopping. Unlike Yahoo, Microsoft didn’t appear resigned to give-up competing on core search. It says it began building the search product internally only four years ago and publically released in the last two years.

Ask takes a realistic approach to competition. With only 4% of the search market, the company is focused on ways to grow usage from existing users rather than take share from others. This is not a bad outcome at all, according to the CEO, who says (to paraphrase) he prefers having a “slice of a watermelon rather than an entire grape.” The strategy for accomplishing this is to offer users more variations on core search. Examples would be to conduct search based on blogs, images, news, or local information. The company is happy with its progress and says that since launching Ask 3, it’s metrics have improved. Interestingly, the number of searches per session have declined at Ask due to these improvements (users are getting what they want or need with less work). The company is smart to therefore focus on more meaningful metrics around retention and engagement. Are the session lengths growing and is repeat usage increasing to due satisfaction? Presumably, yes.

The next afternoon, there was a separate panel featuring Mitch Kapor and Jimmy Wales. Jimmy spoke about Wikia, which is growing into human-powered search. Mitch has several affiliations, one of which is Foxmarks. Mitch suggested that Foxmarks, which now has over 250mm pages in its bookmarking corpus, is building capabilities to create search results that would be different and potentially better than traditional engines.

Taking all of this into account, are we likely to see any change in the market share of the existing players? Yahoo seems best positioned to change the current model of user reliance on search. “Search as navigation” is a paradigm they’d like to de-throne. In other words, Yahoo might not care if Google has 70% of the search market if people begin to search less and do something else as a replacement.

Microsoft seems like the company positioned to have some deep technology in the works to change how search is conducted, presented or integrated because it’s spending lots of money on R&D in this area. But that’s a risky and unpredictable path to bank on. It’s also deep-pocketed enough to be aggressive about the next big disruptive acquisition. Knowing that it should have over-paid for Facebook a long time ago, Microsoft may be the company to do the next $1bn deal for the new, out-of-nowhere, hyper-growth company that comes onto the scene.

All the while, Google is racing ahead trying to organize the rest of the world’s information that it hasn’t already. Like a young person wiser than his age would suggest, Google has often stated that its biggest competitive threat is probably an unformed or unknown company. It knows that somebody will come along and figure out a way to organize the web that’s more powerful. Until then, we’ll be watching to see if the strategic initiatives of the current players can really “move the needle.”

• Fortune iMeme - What Next For The Internet Media Giants?
• Search Leaders Get Defensive
• iMeme Fa So La Ti Do
• Web Leaders - Search is Just the Beginning
• What's Right and Wrong with Yahoo

Filed under: Events, Google, Search Technology, Innovation

Email It   Digg This!   Slashdot It!

Tags: iMeme, Fortune, Google, Yahoo, Microsoft, Ask, Adam Lashinsky,