Yahoo’s undercover social network

Apr 17, 2007

Yahoo's (YHOO) not one of the names you think of when you think "social network" – Facebook and News Corp.'s (NWS) MySpace are at the top of that heap. But thanks to new features in Yahoo Answers, that could soon change.

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Data from Nielsen//NetRatings, released today, shows that Answers is by far Yahoo's fastest growing channel; it went from an average monthly unique audience of 2.3 million last winter to 15.7 million this winter. (Facebook has more than 19 million monthly unique users in a system that's more closed than Yahoo Answers; you have to be a member to poke around in Facebook, but Yahoo Answers is browseable. MySpace has more than 60 million unique visitors in a typical month.)

Why did Yahoo Answers grow so fast? The numbers don't tell, but here are a couple of guesses.

One, Google (GOOG) dropped out of the answers business. That probably had an impact in two ways. Some Google users may have migrated to Yahoo, and the news of Google's failure boosted Yahoo's visibility.

Two, last month Yahoo added an "invite a friend" feature to Answers, and began allowing users to connect and make friends in the "Answers Network." That move transformed the channel from a big Q&A forum into a social network, just like that. (See Loren Baker's take at Search Engine Journal.)

For Yahoo's audience growth numbers, see below:

Yahoo's Top 5 Fastest Growing Channels, Q1 2006 - Q1 2007 (3 Month Average Monthly Unique Audience, U.S., Home and Work)

+--------------------+--------

--+----------+---------------- ---+

| Channel | Q1 2006 | Q1 2007 | Q1 - Q1 % Growth |

| | UA (000) | UA (000) | |

+--------------------+-------- --+----------+---------------- ---+

| Yahoo! Answers | 2,317 | 15,707 | 578% |

| Yahoo! Video | 2,982 | 7,987 | 168% |

| Yahoo! Real Estate | 1,245 | 2,384 | 92% |

| Yahoo! Widgets | 458* | 817 | 78% |

| Yahoo! Health | 3,029 | 5,362 | 77% |

+--------------------+-------- Source: Nielsen//NetRatings, April 2007

Note: *These web sites do not meet minimum sample size standards. Projected and average measures for these sites may exhibit large changes month-to-month as a result.

I believe there's also something else going on here, and it could be good for Yahoo. Amazon's (AMZN) four-month-old Askville site has a similar bent, and it gets a lot of questions that seem to be from the young parent demographic – questions about what kind of birthday cake to get for a 1st birthday party, how much work is right for a kindergartener, and what the best cookware brands are. These are not the sorts of discussions taking place over at MySpace and Facebook, or at professional social networks like LinkedIn. In other words, networks like Answers are expanding the market.

That's not all. Now that Yahoo has 15.7 million monthly users asking questions that range from the serious ("How could I improve this thesis?") to the not-so-serious ("What's your favorite song covered by the Ramones?") Yahoo is collecting a staggering amount of data about user questions and interests.

That data might turn out to be far more valuable than plain old page views could ever be.

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