In April 1994, Yang and Filo, two Stanford students developed the first hierarchical directory of sites that consisted of a list of favourite Internet Web sites named “Yet Another Hierarchical Officious Oracle''. Yahoo's directory was maintained by staff who surfed the Web, searched for "new and cool" sites, which were two main navigation buttons on the company's Web page, and classified them for input into the database accessed through Yahoo's directory. The firm's service also benefited suggestions provided by its users. Through a human-centered directory resource, Yahoo entered the search market, allowing the firm to establish a powerful consumer-focused brand.
Unlike its initial competitor, Excite who was more software-driven and geared its investments towards technological assets, Yahoo’s servers were "PCs run by a third party. Yahoo had never patented its search technology, instead, they used AltaVista’s algorithmic search engine to support their search service. AltaVista invented a technology that automated search, creating a software-based searchable index of page contents and algorithms that ranked page relevance based on keyword frequency. However, Yahoo replaced AltaVista with Inktomi in 1998 because Inktomi offered a faster process and a larger index.
As website developers abused search algorithms by repeating keywords on their page resulting in irrelevant listings that bothered users. In 1998, Sergey Brin and Larry Page made an algorithm to solve this problem. The PageRank algorithm preferred pages to which other pages referred. The links signalled that another page’s designer thought the focal page deserved attention. The importance of the focal page was determined by the count of its inbound links, weighted more when they were cast by pages that Google had previously deemed to be important. Google algorithm outcompeted rivals such as Inktomi because of its superior capability in indexing and bigger index size. In 2000, a similar number of full-text pages were indexed on Google at 560 M and Inktomi at 500 M. By 2002 Google had indexed 2.1 B pages while Inktomi was no longer in operation. Therefore, although Google entered the search market relatively late, it performed well with strong capabilities that helped it reshape the competition in the industry.
Opportunity discovery is related to the study of externally-driven market imperfections induced by technological developments, consumer preferences, or any other attributes of the framework within industries or sectors. Yahoo’s sensing approach is consistent with a view to sensing opportunities through low-cost resource-based and risk-sharing partnerships. Other than AltaVista and Inktomi, Yahoo partnered with VISA for ecommerce and Viaweb for an online store hosting system. Partnering enabled Yahoo to create a broad opportunity network across a wide range of markets because it is less resource-intensive than other alternatives.
Opportunity creation, on the other hand, is understood as an enactment process based on the actions of entrepreneurs exploring ways to produce new products. Developed a patented results-rated algorithm, Google entered the commoditised search market, mainly aimed at the business market. It continued investing in other specialised technological resources, including index development. Google's strategy differs from Yahoo's in making more intensive resource commitments to sensing through internal deployment, which accounts for 50% of its operation. Such a strategy is consistent with the aim of shaping, rather than adapting; uncertainty and creating, rather than discovering opportunities.
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