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Yahoo (Nasdaq: YHOO) wants to tie all its various services together so each user needs to log in just once to access and manage its services, and will be able to do so from one central site.
To do this, it is rewiring its architecture from the inside out and opening up its platform to third-party developers, Yahoo chief technology officer Ari Balogh said at the Web 2.0 conference in San Francisco.
Yahoo is throwing a bash for developers to learn about SearchMonkey, its open developer platform, which is part of the project, called "Yahoo Open Services," or YOS.
Yahoo will be using the OpenSocial Foundation's specifications in its application framework.
Observers think the idea is impressive but contend it is social networking, despite Yahoo's strenuous denials, and wonder if it's too little too late. They're divided on its effectiveness as a defense against the threatened takeover by Microsoft (Nasdaq: MSFT), however.
Putting It All Together
Yahoo isn't creating another social network to compete with Facebook, which isn't a member of the OpenSocial Foundation, Balogh said; instead, it wants to bring a social aspect to every interaction with Yahoo.
Yahoo serves more than 500 million unique users and 120 billion page views each month. Yahoo users "spend 235 billion minutes a month on our sites" and "10 billion relationships exist on user buddy lists and in Yahoo address books," said Neal Sample, Yahoo's chief architect for platforms. Yahoo plans to unlock its "massive latent social network," he said.
Third Party Developers
Yahoo has "previewed Yahoo OS with leading development shops and they're very excited to do their thing on Yahoo," Sample said, adding that the developers "plan to dedicate a lot of resources to this platform."
He also invited independent developers "to take advantage of our huge scale to write applications that build on our existing properties" such as Mail, Sports, Search, the Yahoo front page, Yahoo Mobile and My Yahoo.
The first project in YOS is SearchMonkey, Yahoo Search's new open developer platform. The SearchMonkey site offers a limited developer preview you have to sign up for if you want to participate.
On May 15, Yahoo will hold a developer's party for those interested in SearchMonkey, at its headquarters in Sunnyvale, Calif., from 5:30 to 8:30 p.m. Developers can register here.
The OpenSocial Foundation
OpenSocial defines a common application programming interface (API) for social applications across multiple Web sites. It is supported by the OpenSocial Foundation, a non-profit entity set up by Yahoo, MySpace and Google (Nasdaq: GOOG). Microsoft-backed Facebook is conspicuous by its absence.
OpenSocial is built from standard JavaScript and HTML, and lets developers create applications that run on social Web sites that have implemented the OpenSocial APIs. These sites will be known as "OpenSocial containers." They will let developers access their social information in exchange for a large suite of applications for their users.
The OpenSocial specifications are already in implementation version 0.7.
Doing the Right Thing
The YOS announcement is seen as a good move. "Yahoo has for a long time needed what I'm calling a social center," Greg Sterling, founding principal of Sterling Market Intelligence, told TechNewsWorld.
Yahoo "is a collection of scores and scores of potentially independent verticals and some other stuff thrown in," he added. "There hasn't been any cohesion and this effort to spread contacts and social elements across Yahoo is a good idea."
Yahoo is wise to leverage its "half billion users and focus on the content business which is their competitive advantage over Google," Michael Sprouse, chief marketing 
officer at Epic Advertising, which helps Web developers monetize social networks, specifically Facebook, told TechNewsWorld.
The Fly in the Ointment
The idea's fine, but can Yahoo execute, and if it can, is it late to the banquet?
"Relative to what they disclosed, it's a great innovative approach, and the ideas are great and they're nice, bright shiny promises, but it'll be important to see where they go and how they're executed," Sprouse said. "Also, my question is, with the social networking piece of their strategy , whether or not they're too late to jump in that game given where MySpace and Facebook are."
Sterling agrees: "Had this come a year ago or so this would have made a stronger impression on people; it may feel to some like it's a little late especially with all that social networking," he said.
What about Microsoft?
Finally, if Yahoo goes ahead with YOS, what will happen to its proposed buyout by Microsoft?
"People are waiting to see how seriously Yahoo takes this because of the idea that Microsoft might launch a proxy battle," Sterling said. He thinks, however, Microsoft's playing a win-win strategy. "The noises coming from Microsoft are designed to force Yahoo to the table -- 'We can walk away from the deal ' -- but they may also be preparing the market for the possibility that they won't complete the deal -- 'here's the bottom line and if we can't make it we'll walk away,'" he explained.
There is the slightest glimmering now that "the deal won't happen," and in that case, the fallout "could be a whole slew of lawsuits against Yahoo directors," Sterling said.
But perhaps the shoe is on the other foot and it's Yahoo that made a brilliant pincer attack. "Yahoo's announcement was a pretty good corporate strategy move because of the timing -- the day before the deadline for them to close the deal with Microsoft expires," Sprouse said. "Something like this could potentially force Microsoft to bump up their offer price because of the innovativeness of the idea and the opening up of the market."
On the other hand, if Microsoft does walk away from the deal, the second part of Yahoo's corporate strategy kicks in: "Yahoo is left with this new innovative approach they're taking, and that's a good answer to the question of why they've slipped so far behind Google," Sprouse said. "Now they can point to something from the strategy perspective leveraging their strong points."
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