Photo: “Scott Beale/Laughing Squid”

Yahoo! Jellytalks is a monthly speaker series aimed at developers, designers and entrepreneurs. Each month a relevant speaker attends a Jelly (casual co-working space for collaborative work) and they are streamed live. Tune in online: http://jellytalks.yahoo.com/

Here’s how it works

1. We’ll invite an interesting speaker to a local Jelly, have ‘em talk for 30-45 minutes.
2. We’ll stream the talk live so Jellies around the world can tune in.
3. After the talk, anyone watching can ask the speaker questions via live chat.

Through a Meebo chat in page and a Twitter feed the global audience can ask questions and receive answers by using the Twitter hash tag i#jellytalks

Gary Vaynerchuk will talk about personal branding, consumer branding and business equity. He will touch on how he used social tools to engage his audience and how you can do the same from yourself or your business.
March 19th, 2010 – 2:30pm EST

More on the speaker:
Gary Vaynerchuk is a New York Times bestselling author and American businessman who was born in Belarus and immigrated to the United States as a young child. Gary’s entrepreneurial instincts took over at a young age, when he owned a franchise of neighborhood lemonade stands and made $1,000 a weekend selling baseball cards. Much to his dismay, his father Sasha pulled Gary into the family business, a local liquor store called Shopper’s Discount Liquors. Before long, Gary recognized that consumers collected rare wines just like people collected baseball cards, and he was off to the races. Gary transformed himself into a wine expert, rebranded the store as Wine Library, launched a retail website in 1997, and by 2008 he had raised annual revenue from $4 million to $60 million. In 2006 Gary achieved one of his life-long goals when he was caricatured on the front page of the Wall Street Journal in an article about online wine sales.

In the past month, Yahoo! Sports has proven that it is the destination that sports fans turn to when news happens.  Not only did the site surpass all of its competitors to become the #1 online destination for the Winter Olympics, it also set a traffic record, generating more than 39 million unique monthly users in February (comScore, February 2010).

And now, Yahoo! is announcing that it has entered an agreement to acquire Citizen Sports, a leading social media company.  Home to the #1 fantasy football app on Facebook, Citizen Sports engages and unites fans across the globe around their favorite sports and teams.

As Yahoo! pursues our social strategy of enriching, aggregating and distributing social content from across the Web, Citizen Sports will strengthen how we go about doing this in the Sports category and beyond.  The combination of these two powerhouses will make the Yahoo! experience more personally relevant, create new opportunities for users and advertisers across Yahoo!, mobile and social networks and thrill sports fans everywhere.

Yahoo! Sports’ best in class news and information will be integrated into Citizen Sports’ range of products and applications for football, hockey, soccer, baseball, racing, rugby, hockey and cricket.  In addition, Yahoo! Sports users will be able to broadcast their allegiances, create or join a conversation with friends and fans and cheer for their teams through Citizen Sports’ applications.

So…what are you waiting for?  The race is on.  Go get your March Madness on with the Bracket Challenge by Citizen Sports app and Yahoo!’s Tourney Pick ‘Em!

– Jeff Kinder, SVP, Media Products & Solutions

We invite you to join a new experiment we cooked up at Yahoo! Labs called Predictalot, a game that takes NCAA tournament pick ‘em to entirely new extremes.

Here’s how it works. You can invest virtual points on almost any prediction you can think of about the men’s college basketball tournament, like “Duke will advance further than Texas,” or “Every final four team’s name will start with the letter U.” For example, you can invest one point predicting that “there will be exactly 2 upsets in the Elite Eight” and, according to the current Predictalot odds, you’ll win ten points if you’re right.

You can keep your predictions and see how they turn out, or you can sell them at any time, even while you’re following the action on the court. How does that work? Think of your predictions like stocks that can be priced, sold and traded (for virtual points, of course) just like you’d buy and sell stocks, options and futures on the financial exchanges of the world. Predictalot offers hundreds of millions of such predictions, constantly computing prices for them all.

Throughout the tournament, the prices of all the predictions in the system will go up and down based on what’s actually happening in the tournament and on what everyone else thinks those predictions are worth. Based on the value of the predictions you invest in you’ll accumulate points and climb your way to the top of the Predictalot leader board.

In technical terms, Predictalot is what is called a combinatorial prediction market. Some of us at Yahoo! Labs, along with academics like George Mason University professor Robin Hanson, have been studying and writing about them for quite some time, and dreaming about trying them out in the real world. We built the first version of Predictalot during an internal Yahoo! Hack Day. And this year we used the Yahoo! Application Platform to finally build a public version of the game. Like any Yahoo! App, you can install Predictalot to play right on the Yahoo! homepage. (Note that we’re not special in that regard: anyone can develop a Yahoo! App that’s available to millions of Yahoo! users — there’s good sample code, it supports YUI and OpenSocial, and it’s easy to get started. Seriously, try it.)

After some fits and starts, a few late nights, and eventually a few all nighters, we’re proud and excited to go live with Predictalot, version 1.0. I can’t rave enough about the talent and dedication of the research engineers who gave the game a professional look and feel and some real production speed. They turned a very pie-in-the-sky idea into a reality. We have a lot feature ideas in mind for future versions, but the core is in place and we hope you enjoy the game.

With 9.2 quintillion outcomes, or nearly as many as the number of individual insects on Earth, Predictalot is to our knowledge the largest prediction market ever built. We hope that with your participation it will prove a great test to the limits of what the wisdom of crowds can produce.  We’d also like to pave the way for the serious use of combinatorial prediction market technology in a host of other arenas down the road.

Smarter markets will be extremely valuable in a variety of applications, especially online, where markets and exchanges decide prices and allocations for all kinds of goods and services, including advertising inventory. And more and more, the matching of buyers with sellers – which is the core function of any market – is requiring sophisticated algorithms, machine learning and optimization technology. Predictalot attempts to help us better understand these dynamics while also giving us the great satisfaction of picking Duke to go all the way.

(Duke alum) David Pennock and the Predictalot Team:
Mani Abrol, Janet George, Tom Gulik, Mridul Muralidharan, Sudar Muthu, Navneet Nair, Abe Othman, Daniel Reeves, Pras Sarkar

P.S. If you’d like to learn more about the technology hidden in the engine and the scientific factors at play, read our post about Predictalot on the Yahoo! Research website. And don’t forget to also check out all of Yahoo!’s fun tourney experiences.

The Invisible Hand of Machine Learning

Key Scientific Challenges, Entry #6: Machine Learning

On January 27, we announced the kick-off of our 2010 Key Scientific Challenges Program.  To highlight the scientific challenge areas included in the program, we launched a series of guest blog posts on Yodel Anecdotal. Our most recent post covered Web Information Management.

Another big challenge our Yahoo! research scientists are continually examining is machine learning. In this entry, John Langford from Yahoo! Labs shares some thoughts on how Yahoo! is driving research into machine learning and why it’s a fascinating field.

When I wake up in the morning, I can’t resist checking my email and browsing the Internet to see if anything has come up. Then I get to work thinking, writing, searching, finding, and learning various things, all using an Internet that’s powered by machine learning in dozens of ways. When I go to sleep at night, I smile because I know that in addition to using machine learning throughout my day, I’ve also done my part to advance machine learning technology, many others have done likewise, and that by doing so we’re making a major impact on people’s lives.

Even though machine learning has such a broad influence on the Internet, it can be quite difficult to recognize. This is primarily because machine learning’s benefits are often hidden — they are the spam emails you don’t see, the uninteresting news articles you don’t see, and the irrelevant search results you don’t see, just to name a few. In this sense, machine learning is like an invisible hand. It’s also sometimes easier to recognize the flaws in a machine learning system – like “Why did my email end up in my friend’s spam folder?” – than it is to notice its benefits. But despite these quirks, machine learning is one of the best technologies we have for solving some of the biggest problems on the Web.

The problem of spam is representative of why machine learning is so effective. Spammers are constantly changing and adapting their strategies and technology to evade even the most capable filters. Machine learning attacks this problem by aiming to build an automatic system able to stay ahead of the game and continually refine itself in response to its environment. We haven’t completely achieved that goal yet, but progress is steady. Machine learning systems can always get better, learn more, work faster and in ever more ways, because people will always want less spam and more interesting and relevant news articles.
Naturally, this reality means we’re constantly running into both the empirical and theoretical boundaries of machine learning and statistics. How do I learn from so much data that we can’t fit it on a machine? How do we extract evidence of what the best decision was? What if the best decision changes? How do I minimize the need to know the best decision? How do I effectively use the incredibly large quantities of information available on the Internet? And how do I fit it all together in an automatic way that is useful to someone? And how do you know it’s useful?

Good answers to these questions can improve the life of just about everyone, which is the core reason why Yahoo! is sponsoring the Key Scientific Challenges Program. If you are a graduate student working on these questions, you understand how exciting and challenging this field is. And if you aren’t, consider the satisfaction associated with changing fields. :-)

John Langford

Yahoo! Labs

March is here, which means college basketball tournament time, one of my favorite times of the year, when even the mildest of fans start keeping up with every single game. When the Virginia Techs and the Daytons are crossing their fingers every single week that they stay inside that coveted bubble. When Facebook and Twitter status updates explode every time a top-10 team gets stunned or a star player makes an amazing dunk.

Facebook and Twitter—those sure weren’t around when I was playing in the Championship game 20 years ago against Duke. I’ll never forget the thrill of that victory, all the memories from the entire season, playing alongside Stacey Augmon and Larry Johnson—broken jaw and all.

I’m not on the court anymore, but that’s one of the beautiful things about the NCAA Championship Tournament: With every correct pick, every upset we call, every favorite team that advances, we (the fans) get to share in the thrill. One million dollars certainly doesn’t hurt, either—which is what Yahoo! is offering one lucky fan for submitting the perfect bracket. No perfect bracket in the end? No problem. The best bracket in the KFC- sponsored Yahoo! Sports Tourney Pick ‘em contest wins $10,000 (just ask Michael Lemon—he’s been enjoying his winnings from last year), and there’s even a second-chance contest from TIAA-CREF for the majority of us that must reluctantly accept our busted brackets.

Starting today, on-the-go fans will have access to a great new mobile experience for staying on top of their bracket selections. Yahoo! has created a mobile site where fans can play the Yahoo! Sports Tourney Pick’em game right on their mobile device at m.yahoo.com/tourneypickem. In addition, they’ll be able to get live scoring, game stats, updated schedules, news, and expert analysis from the Yahoo! Sports editorial team.

And it’s even easier these days to get your friends involved (and we all know the real satisfaction comes in beating that one friend who is so sure he’s going win) with Facebook and Twitter integration. Plus, you can be a die-hard fan without having to invest all the time and research. Yahoo!’s Bracket Wizard and Scenario Generator help fans with those quick decisions and allow them to see at a glance which teams to cheer for along the way to ensure that big W.

One of the perks of being a member of the Yahoo! Sports team is that I get to pitch in and offer my best (and presumably spot-on) advice to the masses. For those last-minute updates, fans can tune in to Yahoo! Sports Fantasy Bracket Live, a live and interactive web-show from the folks who brought you the Emmy®–nominated Yahoo! Fantasy Football Live. Tune in on March 17 as Jason King, Brad Evans, Larry Beil and I give you a final rundown on all the immediate updates affecting your teams. Viewers can even send us their bracket, and there’s a chance we’ll help you out with it on our show.

I know you guys are as excited about the next few weeks as I am. If you haven’t already, you better get in the game soon. Tip-off is only 8 days away, and it can’t get here soon enough!

-Greg Anthony, Yahoo! Sports College Basketball Analyst

“Hollywood’s Biggest Night” is just around the corner and Yahoo! is ready to take you down the red carpet and get you through the evening with up-to-the-minute information and all the news, photos, and juicy gossip you can handle.The 82^nd Academy Awards are at 8 ET / 5 PT Sunday, March 7, 2010 at the Kodak Theater in Hollywood and will be hosted by Steve Martin and Alec Baldwin.  While the show will be broadcast on ABC, Yahoo! once again is THE place where you can weigh in on all things Oscar, from the fashion faux pas to the surprise winners and the heartfelt speeches.

We’ve dedicated an entire section of Yahoo! Movies to this year’s awards show with the idea that Yahoo!’s Coverage of the Oscars starts with you! Let your voice be heard and make sure to cast a vote in our poll: “What do you want to see most when you watch the Oscars?” As of right now, 43% of you want to see who wins the big awards. You can also weigh in on who you think deserves to win Best Picture, Best Actor, Best Actress, Best Supporting Actor, Best Supporting Actress, and Best Director.

Interested in seeing what the stars are wearing? We’ve got you covered with our Oscars Photo galleries including fashion photos from the red carpet, insider photos from the before and after parties, photos of the nominees, and photos from the many events taking place Sunday.

We also have a Featured Videos section, a News section, and an ongoing Oscars Blog.

Coverage of the 82^nd Annual Academy Awards is already underway with both OMG! and Yahoo! News feeding into the Oscars frenzy.

Want to be the best informed on this year’s likely winners and losers? We’ve broken down the Academy Awards by category to help you get a leg up on your friends in picking who will win Oscar gold, in How To Win Your Oscars Pool.

Find out why Sacha Baron Cohen (aka Ali G/Borat/Brüno) went from being a presenter to sitting the award show out and watching from home!

Want an expert’s opinion? Who’s more suited to give Oscar picks than OUR favorite Oscar–namely Oscar the Grouch? Sesame Street’s seminal crab-apple took a few minutes to answer some questions on who he thinks the winners will be on Sunday. Check out Oscar the Grouch’s Oscar Picks.

Criticisms of this year’s hottest movies and highest contenders are outlined in Yahoo! News’ Controversies big and small dog Oscars contenders. Find out why there’s been outrage over Sigourney Weaver’s role in Avatar.

Red-carpet style predictions and fashion alerts are revealed in OMG!’s Glam Slam: Oscar Style!

Have your own opinion on the big winners and major upsets? Want to weigh in on some of the fashion wins and fails? Then we invite you to join the conversation on Facebook and Twitter.

On Facebook, be sure to check out the Yahoo! Movies fan page (Yahoo! Movies) where you can write captions to photos of your favorite celebs. We’ll be uploading fashion photos of the movie stars from the red carpet, and we’re asking you to submit your most witty captions via comment.

On Twitter, follow @YahooMovies for real-time info on Academy winners. Follow @YahooOMG for updates on fashion from the red carpet. Follow @YodelingMamas for a Mom-blogger’s point of view on the evening. And of course follow @Yahoo for an overall perspective.

See you on the red carpet–and may the best man, woman and picture win!

What do Jennifer Lopez, live animals, giant bananas, and a guy sitting on a couch watching TV have in common? They all contributed to the success of Yahoo! TV’s Primetime in No Time, which just streamed its 500th episode!

But the real contributor to the success of PiNT has been you, dear viewer. Because of you, our popular TV recap show has even more reasons to celebrate…we’ve reached more than 365 million streams, 12 million of which were on one day for Jennifer Lopez’s fall during the American Music Awards. Note to celebrities: please fall down more often and feel free to interrupt Taylor Swift any chance you get. Man, I love LIVE TV! And you guys are spending an average of 6 minutes on our page. Our show is only 3 and a half to 4 minutes long. This is why we love you!!!

We’ve had some good times on PiNT. Remember when Donald Shultz from Wild Recon brought live animals on the set? And who doesn’t love the skits where I get to sing and dance. And of course, my personal favorite — the Steelers winning the Superbowl. It’s their 6th by the way!

But it wasn’t all good times, for me anyways. My least favorite moment was getting sucker punched, falling off of some giant bananas and more torture all in the name of good television as a guest on ABC’s hit show Wipeout. As you are reading this, know that I am still in pain but will continue my TV watching duties. Hopefully I will still be able to have children after my final crash.

Let’s not forget to thank the many special guests who visited the PiNT studio in Los Angeles including the Glee Kids who were really jealous of my voice; reality show contestants from Survivor (thanks for showering before coming in) and The Bachelor/ The Bachelorette; actor Harry Hamlin and comedienne Margaret Cho.

But back to you, dear viewer. Thank you for watching Primetime in No Time on Yahoo! TV, for following me and Yahoo! TV on Twitter (@franknicotero and @yahootv), and for making us THE most popular online video show.

-Frank Nicotero

Surfing the Data Wave: The Problem of Managing Events and Updates for Hundreds of Millions of Users

Key Scientific Challenges, Entry #5: Web Information Management

On January 27 we announced the kick-off of our 2010 Key Scientific Challenges Program.  To highlight the scientific challenge areas included in the program, we launched a series of guest blog posts earlier this month on Yodel Anecdotal. Read our previous post on online advertising, “The Art and Science of Advertising.”

Another big challenge our Yahoo!’s research scientists are continually examining is Web Information Management. In this entry, Brian Cooper from Yahoo! Labs shares some thoughts on how Yahoo! is driving research into information management and why it’s a fascinating field.

A Torrent of Data
Sites like Facebook and Twitter demonstrate that users really like to know what’s going on with their friends. At the same time, the popularity of blog readers and personalized RSS aggregators like MyYahoo! and iGoogle show that users also like up-to-date news. Although social networking and content aggregation seem like different applications, at the core they share a key mechanism: collecting the most recent content from a set of producers, and distributing it to a set of consumers. In the case of social networking, producers write status updates or post links, and consumers (their friends) get a list of the updates. In a news aggregator, the producers are news sites or blogs, and the consumers are the readers that want the content.

The core mechanism that takes content from producers and redistributes it to users is actually quite hard to get right, and is an example of the really tough problems that fall under the Key Scientific Challenge area on Web Information Management (and its sub-topic Data Management)

The main problem is the multiplicative explosion of updates. Consider a popular user of a site like Twitter. Ashton Kutcher, for example, has over 4.5 million followers as of February 18, 2010. Every time Ashton tweets, his words of wisdom have to be propagated to the feeds of all those millions of followers. Even if the average user has far less followers, their tweets may have to be propagated to hundreds of users or more. Suddenly, even a short 140-character message can consume a lot of server resources. It’s for this reason that Twitter notoriously found it difficult to scale and stay up at the same time. Some of the challenges in doing so have been described by Twitter engineers.

At Yahoo!, we’ve been aggregating and distributing content for a long time, and we’re increasingly distributing social updates too. Products such as Yahoo! Mail and Messenger show you recent updates and activities by your friends on Yahoo!. Plus, services like Yahoo! Updates provide tools for developers to feed a variety of different user activities and updates that happen on their sites into Yahoo!’s products (and vice versa). As we build our infrastructure to support both content and user updates, we run into many of the same scaling problems that other companies have been reporting. To address these challenges, we took a step back and looked at the whole architecture needed to support these “user event feeds”.

The Push or Pull Dilemma
I’d like to talk about one aspect in particular, as it directly addresses the intersection of building Internet-scale databases and dealing with social data. When distributing updates from producers to consumers, you have a fundamental choice: should you “push” updates to consumers, so that when a user logs in their feed is already constructed and ready to go? Or should you wait until a consumer logs in, and then “pull” updates from producers to construct the feed on the fly?

Pull ensures that we construct feeds only for users that actually log in, but it has a downside: the time a user spends waiting for their feed can be quite long because the system needs to collect and sort all of the updates from all of the people or news sources that the user follows. Many sites face this tradeoff between doing potentially unneeded work to always be ready on the one hand, and the strain of delivering on demand performance on the other. Digg recently reported moving from a pull to a push model for one part of their site, resulting in a huge increase in the amount of “pushed” data that had to be stored, but a significant decrease in response time for users.

Threading the Needle
At Yahoo! Labs, when we thought about this problem and tried to figure out whether push or pull was best, we realized something that should have been obvious all along: neither push nor pull is best.

Consider a producer named Alice that posts a new status update once an hour. We need to include her updates in the feeds we produce for her friends. Thus, when her friend Bob logs in, he should see some of Alice’s recent events. But we only really need to show Bob some of his friends’ events, because there is only room on the screen to show him 10 at a time. Now imagine that Bob only logs in once a week. In that week, Alice may have produced 80 or more updates. If we pushed all 80 to Bob’s feed, at least 70 will have fallen off the front page (replaced by newer Alice events or newer events from other friends) by the time Bob logs in, and all the resources (network bandwidth, disk I/O, CPU time) spent on pushing those 70 updates would be wasted. Multiply that waste by millions of users, and you can see where this is heading.

Alternatively, consider Carl, another one of Alice’s friends. Carl loves to check his feed and updates it every five minutes (he’s an over-sharer). In this scenario, a push model makes more sense: rather than querying the database every five minutes for Alice’s updates, we should push Alice’s events to a pre-computed page for Carl, and just serve him that same page over and over until a new Alice event arrives and updates the page. That way, Carl’s experience is great for him AND no servers meltdown!

The key insight is that we should do push for some producer/consumer pairs and pull for others. Deciding whether to do push depends on the relative frequency of the producer’s events
compared to the consumer’s logins, as well as the relative cost of push versus pull. We can minimize resource usage by only pushing for producer/consumer pairs where the consumer logs in frequently enough that the cost of pushing, plus serving the pre-computed page, is less than the cost of retrieving the event repeatedly from the producer’s queue.

It’s a challenging model to develop and put into place. It can be complicated by an almost endless array of variables, and the challenge of implementing this approach in the midst of hugely popular events, like Barack Obama’s inauguration, or Michael Jackson’s death, which caused huge surges in status updates, makes it even more difficult. It’s also what makes it utterly fascinating.

More details about this challenge, the techniques, arguments and the real-world experiments we’re developing at Yahoo! Labs will be available in our upcoming SIGMOD paper, “Feeding Frenzy: Selectively Materializing Users’ Event Feeds” written by Adam Silberstein, Brian Cooper and Raghu Ramakrishnan, as well as Jeffrey Terrace from Princeton, who was an intern here at Yahoo! Labs last summer. You’ll be able to find the paper on the Yahoo! Labs site later this year and take a look.

Brian Cooper

Yahoo! Labs

We want to share our pride, gratitude and excitement on this 15^th birthday, with all Yahoo! users (600 million of them), customers and partners.  It continues to be an incredible ride for the two of us, as well as for thousands of Yahoo! employees we have had the privilege of working with over the years.

We’ve had the unique opportunity to help create an industry and shape the online world, and will continue to focus on the values that brought us here —working hard, having fun, being passionate about your ideas, believing in each other, and always trying to invent the future.  And as we celebrate 15 years today, we are even more excited than ever about what lies ahead, and the potential of Yahoo! and the Internet.

Of course, we didn’t set out to start one of the world’s largest Internet companies or be leading a movement that has changed the world. We were just a couple of Stanford graduate students doing our research (supposedly) while our professor was on sabbatical.

More interesting than our research was our total fascination with the web and all the cool stuff it suddenly made available. But it was incredibly hard to keep track of the thousands of great websites sprouting up everywhere.  We thought it would be fun to catalog the sites by developing a simple directory. So all this began with nothing more than a hobby to help other early Internet users.

Amazing things happen when we’re doing what’s fun.

We soon learned a huge lesson just as relevant today as then: change and growth on the Internet happen at warp speed—especially if you’re filling a need. With the proliferation of websites and with hundreds of thousands of people accessing our guide, it was simply impossible for us to continue doing this on our own.

Taking big steps takes belief in yourself—and in others.

After many late nights and a lot of pizza, we decided to take the big leap, turn our hobby into a business, raise money and devote ourselves totally to building a company.  This was no sure thing.  For example, 15 years ago, we wanted a free service that was ad-supported. But the conventional wisdom was that our business needed to be subscription-based. Few people thought that advertising could be the key revenue generator for the Internet. Of course, the conventional wisdom was wrong and so today we know that August, 1995, the month our first ad went live, was a critical milestone in the history of Yahoo!, as well as the history of the internet.

Focus on the future: it still looks phenomenal.

Internet growth continues to be simply phenomenal, and we’re nowhere near done.  Fifteen years ago, there were 18,000 web sites and fewer than 10 million people globally on the Internet—less than one third of a single percent of the world’s population at the time. Today there are more than 200 million websites with 90,000 created daily. There are estimated to be 1.6 billion people on the internet today—about 25 percent of the world’s population.

These numbers are astonishing, but even more important and more exciting is the impact that the Internet is having on so many people around the world.  From socio-economic opportunities to more accessible health care to educating the next generation and beyond, the Internet has changed the way we live, work and learn.  It has overcome geographic and political barriers and has made it possible for people to raise their voices as they seek greater economic opportunity and freedom.  And Yahoo! has been a leader in enabling these tremendous technological advancements every step of the way.

Let’s aim to be even prouder fifteen years from now than we are today!

All this in just 15 years. Yahoo! has been built by thousands of dedicated employees, hundreds of millions of loyal users and scores of advertisers who envisioned a future that was exciting, challenging and at times daunting.  To work in the sandbox that is Yahoo! and the evolution of the Internet is truly amazing.

And yet as fast as the Internet and Yahoo! have grown and as remarkably our lives have changed, we are just at the beginning of this great transformation.

The Internet still has enormous and untapped potential.  There are billions of more people we need to drive online, and then provide them with relevant content and opportunities that they’ve never dreamed about before.

We are confident that 15 years from today, we will look back in marvel  at how far you, and the Internet have traveled in such a short time. Just as we are doing today.

Jerry Yang and David Filo

Co-Founders & Chief Yahoos

The Art and Science of Advertising

Key Scientific Challenges Blog Series, Entry # 4:

Late January, we announced the kick-off of our 2010 Key Scientific Challenges Program, what we hope is a thought-provoking series of guest blog posts here on Yodel Anecdotal that offer a quick overview of these scientific challenge areas. Check out our last post on microeconomics and social systems.

Today, we cover advertising, which is yet another important topic related to the Web. We’ve recruited Vanja Josifovski from Yahoo! Labs to give you a glimpse of how significant advertising is to the online world.

If you’ve seen Mad Men, you’ll know what it’s like to develop an infatuation with the 1960s advertising world – the fashion, the glamour, the old technology. While we’ve come a long way since then, advertising continues to remain a large part of our daily lives and a permanent fixture of our online experience. Here at Yahoo!, we have a special appreciation for the undercurrents of online advertising because it supports a large swath of the Internet ecosystem.

Generally, web advertising closely follows the same two major models of traditional advertising.

First, there is direct advertising, which simply means that the goal of the ad is to get a direct response from the viewer. A good example is sponsored search where ads are shown beside a search result. The most difficult thing with this type of advertising is making sure the ads are relevant. If you searched for the word puzzle – did you mean jigsaw, crossword or Legos? These are complex issues we have spent a lot of time thinking about – and not in the Mad-Men-sit-back-with-whiskey way, but more of a microeconomics, super-computing way.

And then there is brand advertising, which aims to create a favorable impression about a brand or a product. In this construct, ads are usually served up by graphical means, in what we call display ads on web pages. The challenge is matching the placement/context of the ad with behavior of the viewer, both of which also introduce a stunning number of variables and data points.

In both modes – search and display – some complex learning algorithms are needed to provide relevant ads to a user. In a nutshell, it is this problem of relevance that makes advertising one of our Key Scientific Challenges. And it’s also central to the somewhat newer concept of computational advertising — a scientific discipline we developed at Yahoo! Labs that aims to formalize the problem of finding the best ad for a given user in a given context.

It sounds logical enough, right? Can we really build a system that serves the most relevant ad to a user every single time? Can we bring advertising into the realm of the other “computational” sciences? Well, we think so and we’re working hard to tackle that kind of personal relevance. It’s simply going to take some hard core science, some persistence, and continued sharp thinking and hopefully more programs like those at universities (Stanford has a leg up) and our own Key Scientific Challenges to crack it.

Vanja Josifovski
Yahoo! Labs

P.S. If you’re curious about just how big a deal Computational Advertising is, one of Yahoo!’s foremost experts in the field, Andrei Broder, was just elected to the National Academy Engineering. That’s pretty good testimony that advertising is a little bit art AND science.