This fine interview is from the Nestoria blog:

For this installment of the Nestoria interview series we speak with Salim Mitha, co-founder of the recently launched health, beauty and wellness community site, Wahanda.

Prior to starting Wahanda, Salim was at Yahoo! Europe for four years where he was the Senior Director of Search and Social Search, and was responsible for the successful European launch of Yahoo! Answers across five markets. Previous to that he worked at Merrill Lynch as an investment banker and at McKinsey as a management consultant, and he has an MBA from Stanford Graduate School of Business.

Salim, thanks for meeting with us.

1. As someone who recently left an internet giant to focus on building a compelling offering in a niche area, explain to us a bit your thoughts on horizontal players versus vertical players.

Essentially the way I see things, there are a three main buckets you can place most websites into. You have:

• Type I: Horizontal sites and portals that try to provide something (or even everything) to everyone by either aggregating content into one place, or creating multiple channels and product lines accessible from one starting point (like Yahoo!, MSN, Google, youtube and even Amazon).
• Type II: Audience specific verticals sites that focus on attracting a defined audience through a broad range of topics and interactions (like a lot of women’s sites out there, or even Facebook and LinkedIn)
• Type III: Subject specific vertical websites or search engines that focus on a defined topic areas (like Wahanda with health, beauty and wellness, toptable for restaurants or Nestoria for property)

While one can argue correctly that some of the horizontal Type I sites contain subsets of Types II & III, the basic method I have used is based on the first order organising principle of sites themselves.

Yahoo!, as a Type I company, is always trying to create additional channels in order to appeal to an even wider range of internet users across a wider range of topics, and continue to satisfy its current user base. Y! Search, the Y! Homepage and even My Yahoo! were the starting points and navigation tools to help people reach what they were looking for, and although some (and increasingly more) of the content was not on the Yahoo! Network, the goals of a Yahoo! or Google is to create an experience and provide tools that work across the board.

One of the tradeoffs of this reality is that the depth and quality of the content and the experience is sometimes compromised, or has to be overlooked by the sheer nature of trying to juggle many balls. Additionally, the tools cannot be customised, and the investment for improving things has to be spread thinly across many areas. Getting 5 million results in Google for one query on “Paris hotels” is something we all need to put up with because Google doesn’t really know who we are, what we are looking for and how to best present all of those billions of websites they have in their index. People still love Type I websites, but these instruments have their limitations and tradeoffs.

Meanwhile at the other end of the spectrum, a Type III (subject specific) website can provide a more comprehensive and relevant experience by not focusing on the depth and breadth of the information and by also building a best of breed experience for the users of that channel. Searching for spas, waxing, massages and cosmetic surgery on Wahanda, or real estate rentals and sales on Nestoria will provide much more relevant results than doing so on Google, and the tools available to the user will not only be better, but can also be improved over time to serve that specific purpose.

The other benefit of a vertically focused subject site like the one we are building at Wahanda is that we can attract a like minded audience who shares similar passions and interests (e.g wellness, fitness, pilates & yoga) and needs (buying or selling a flat!). A Type III site can really generate significant value by allowing its users to connect and share experiences, and can over time benefit from the focus by providing a best in breed experience by focusing investment with one aim. This type of engagement and focus can also open up other doors mutually beneficial product and monetisation initiatives.

Over time, the experience can not only be more relevant and comprehensive, but also more engaging for the user who ends up spending more time and consuming more pageviews on the site. Type I companies have shown that they are susceptible over the medium and long run to dwindling audiences who become less engaged due to decreased relevancy, a relatively poorer consumer experience and the rise of a specialist Type III vertical site. Over time, Type I companies tend to move towards becoming “networks” that aggregate content (and even ads) from Type II & III companies.

2. Over the last few years Yahoo! has invested heavily in “social” or community searching, buying web2.0 pioneers like del.icio.us and flickr, and building Yahoo! Answers. What is the thinking behind “social search” and why is a category Yahoo! is investing in?

Social search recognises that machines in themselves do not tell the entire story and have limitations. There are billions of people across the world with trillions (or more) of experiences, bits of content and valuable experiences, most of which remains as tacit knowledge. Although the walls are coming down, it’s actually hard to “publish” information on the world wide web. Only a select handful of people had their own websites, which means that information dissemination on the web was essentially an oligarchy. Web 2.0 stands for the democratisation of the web - more people can be “publishers”, sharing their thoughts on blogs, their knowledge on sites like Yahoo! Answers, their pictures on Flickr, news reports on Twitter, and their best finds on delicious, etc. All of a sudden, these trillions of bits of metadata that used to be tacit or dormant can be shared and accessed by anyone.

Yahoo! (and especially Yahoo! Search) was actually very early in recognising the untapped power of social search, social media and the social web for these reasons.

One can imagine Google as a “library” - a place you can go to find information on anything from anywhere, but it’s a static, efficient machine like place. We wanted Yahoo! Search to be world-class “University” - yes, we would have a world-class library (= Search index) that was more efficient and comprehensive than Google, but that also had students, professors, dissenters, and a place where you could tap into the human knowledge element of the topics at hand, because this creates a much richer and more valuable experience. Google and other companies are starting to wake up to this reality and you can see that in recent moves in this space.

3. What are your thoughts on the developments in the property search sector in the last year? Do you see a social angle in this sector?

This is definitely a hot area, and one that continues to get better and better (but that’s because there is still so much about the experience that is frustrating!!).

It is still extremely difficult to get all of the information you need in an efficient manner, and you can really see this when you not only look for domestic property, but also commercial property and rentals. My sense as a consumer is that the real estate companies want to maintain control by guarding the information (after all information is power in this oligarchy). To the themes above about the democratisation of the web, I think there is definitely a social angle, and I think it’s the only thing that will cause the step-change leapfrog in the property search sector. My answer to question #4 below gets into why I think this is the case.

4. What are the challenges you think a vertical search engine for property like Nestoria faces?

Property searching shares many similarities to searching and booking a massage or a wellness treatment. It is a high consideration decision that requires a ton of research on the product, who is delivering it, where it is, etc. Many times you rely on word of mouth to help with your decision. It is also an expensive decision, and many times irreversible! Finally, it is a highly personal decision. Either someone’s hands will be on you, or you will be spending the next year or two sleeping in that place you have chosen. Therefore, transparency of information, ratings, reviews and efficiency in finding, sorting and comparing offers are of the utmost importance.

The other similarity between Nestoria and Wahanda is that the process on both sites brings together consumers/buyers, suppliers/sellers, and the professionals/therapists/agents who are involved in the process.

Nestoria is in a field that I would consider to be very competitive up and down the supply chain, and especially online. Real estate agents were some of the first to embrace the web, but only to a certain point. I think Nestoria needs to find a way to hurdle the current obstacles in this space, leverage the power of the user in this new Web 2.0 world, and fend off its competitors to not only create long-term value, but also improve its position in the real estate supply chain.

Thanks Salim. Lots to think about here. Who knew running a ’spa site’ could be so cerebral? We totally agree with your point that by specialising on one particular aspect (in our case property search)and being very disciplined about doing only that on thing well we can deliver a more relevant and comprehensive experience to the use, than someone focused on more things. One point regarding your comment that need to ‘fend of competitors’; we try to see other players as potential partners not potential competitors.

This entry was posted on Sunday, May 25th, 2008 at 8:16 am and is filed under CEO Views, Guest Authors, Verticals. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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