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Yahoo!, Google search for competitive edge

/ Source: CNBC

For the biggest Internet search players, Google and Yahoo!, the competition is more intense than ever.

You might think these companies, two Silicon Valley search engine titans, would have a lot of similarities. But when you're here -- when you get to know the people involved -- the corporate cultures at Google and Yahoo! show you just how different these companies are.

So you might think a Yahoo engineer like Scott Gatz would be a mathematical genius, a brilliant programmer, a geek. But he's not

"I don't consider myself a tech geek," he said.

Gatz's job is to take the most cutting edge advances in Web services software and then make that technical stuff disappear into a simple Web site.

"That's the driving force in the way we try to approach things here,” he said. “Not what's whiz bang but what actually helpful, useful and exciting."

But here at Google headquarters, the focus is on technology. Indeed, some of the buildings here were named after mathematical symbols. The idea is to invent something first, and then figure out how to market it.

Google is proud to have lots of geeks. Google employees devote twenty percent of their work time to personal projects, new inventions and other stuff that might help the company, someday.

Fundamental differences
"You might say that Google is closer to the technologists at Intel, while Yahoo! is more like the consumer product makers at Procter and Gamble.

"These are two fundamentally different cultures," said American Technology Research analyst Mark Mahaney, who notes that the search engines themselves are also very different.

"There two fundamental different approaches,” he said. “Yahoo! comes at search as a way to monetize traffic. Google goes at sponsor search as a way to monetize a very interesting technology that they've developed.

"I think our approach is integrated,” said Yahoo! co-founder Jerry Yang. “I think our approach is more about how do we take different parts of our network and how we enhance a more seamless experience."

For Yahoo!, that means a network of products Google doesn't have like Personals, HotJobs, Instant Messaging, and Launch! Music.

But what Google's got -- that Yahoo can only dream of -- is explosive growth.

"Google just posted a quarter in which they grew about 100 percent year over year," sad Mahaney.

With Google growing that quickly, Yahoo's like Scott Gatz can only hope that carefully design products make up for spectacular growth in the long run.

"Great products drive great business,” he said. “And if we focus on delivering for the users the products that they want, the business works itself out. And it's proven to be true."

The numbers don't tell you a lot about corporate cultures, but they do show two big differences. Yahoo is a bigger company: some $900 million in revenues last quarter, compared to Google's $800 million.

But Google's growth rate is spectacular, with revenues nearly doubling year over year, and rising 15 percent quarter over quarter. Yahoo! is growing at just at 9 percent clip.