Yahoo! (YHOO) may not be buying large internet properties, but it could be creating its own competitors to them. TechCrunch says that Yahoo!’s new Suggestion Board section where users can comment on Yahoo! features is not a competitor to huge community news site Digg.com. But, it could be a prototype, and, if it draws traffic, Yahoo! may decide that the opportunity to enter the market is too good to pass up.
Digg is ranked as the 74th largest website in the world according to Alexa.com. Web measurement service Quantcast puts Digg’s unique monthly audience at 4.6 million. And, most of the audience is young.
One of the financial advantages for Digg is that it is community created. A large web portal could drive traffic to a site like this but would not have to pay for content. While Digg is not as large as YouTube (GOOG) or MySpace (NWS), the cost of acquiring these companies was high. Yahoo! might be able to roll its own.
A drawback to the possibility of Yahoo! entering the community news site business is the relatively poor reception that AOL’s Netscape (TWX) received when it was converted from a web portal to a community news site.
But, that, by itself, does not mean that Yahoo! would fail in entering the same market.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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