Standardization and openness do not benefit the dominant player (or players, in close competition) in a market.

Standardization and openness tend to benefit all players that are not dominant in a market, by comoditizing the market and forcing value based competition.

If the majority of a market is locked up by the dominant player(s), standardization tends to not happen.

If the majority of the market is not locked up by the dominant player(s), things tends towards standardization.

As it pertains to Yahoo they're still an internet powerhouse, but their markets are eroding at a pace that they are probably falling out of the dominant category into the leader-of-the-non-dominant-pack category. Yahoo does some stuff very well, and I suspect commoditization of parts of web-space would be in their favor. The question is if they'll be able to push hard enough fast enough to make some of this stuff catch on while people still care.

Here's some more theorizing: I think it would depend on how saturated the market was. If standardization would cause the market to grow such that a smaller percentage of a bigger market was larger than a large percentage of a small market, the company could still benefit from standardization, but they'd also have to diversify in that time so that when saturation approached that they wouldn't get stuck in a commodity market while their competitors could catch up.

Yahoo's recent openness binge is so strategically opposite to Microsoft that I wonder if they aren't doing this in part to impede the takeover, or as a sort of post-takeover insurance.

A soon-to-be-ex-colleague wrote a good piece on this recently.

http://getluky.net/2008/03/04/is-the-ie8-standards-mode-a-re...