Yahoo might be in news for all the wrong reasons. But Yahoo Inc research head Prabhakar Raghavan seems to believe that he has found the magic mantra to dethrone the internet search king—Google. His unconventional ideas include open source search model to cut into Google’s growing market share. Also a consulting professor at Stanford, he has earlier worked with Verity and IBM Research. Raghavan takes Pragati Verma through the complex maze of internet search and Yahoo’s plans to disrupt the search market and make room for more players and consumer choice. Excerpts:
Microsoft’s hostile bid to acquire Yahoo has dominated headlines? How did it impact employee morale in the research team?
People were obviously unsettled, when no one can comment on what would happen the next day. I advised my colleagues that if you are contributing to a profitable growth, there should be no sense of personal insecurity. Sometimes, the best move that you can make is to stand still.
You have taken the unusual decision of hiring researchers from fields other than computer sciences? How much has it helped?
Internet companies have traditionally researched on computing technologies. We were the first to hire micro-economists. The fact that Google and MSN followed us should tell you how much has the move worked. As computer science professionals, we could design systems that do huge damage to economic value. For instance, we need micro-economists to help us best place click-on ads. To figure out how satisfied is our userbase with a search result, we need social science and not just IT.
Our micro-economists suggested market-reserve pricing, basically using microeconomic theory to set minimum bids, based on the work of Roger Meyerson, who won the Nobel Prize in 2007. We rolled the suggestion into our advertising. By adjusting the reserve price, you could make a lot more money. While I can’t give you the money it made for Yahoo, I can tell you it paid many times over compared to the cost of research.
As we move into social networking domains, sociologists and cognitive psychologists are valuable and tell us how people behave. We need to understand how networks of people behave and influence each other. You might know of the Six degree theory of Duncan Watts. It builds on networks of acquaintanceships; there are six hops between any two people. He has done pioneering work on that. People like him give us insights into how network of