Some Thoughts On Technology Bonus: Yahoo

I hadn’t planned to write another technology piece so soon after the last two.  The hiring of Marissa Mayer by Yahoo as the new CEO is worth a few words.  She was a Google vice-president and employee #20 in the early days of Google.  She is also credited with the look and feel of many Google products, including the landing page, Gmail, and others.  Google announced that she would not be directly replaced when she left, instead shifting the responsibilities she had to other members of her team.  Some in the press implied that Google has a “woman” problem.  I don’t know because I don’t know their track record in this area.  Eric Schmidt said by going to Yahoo she received a promotion.  Take the implication for what you will. 

So, what kind of a company is Mayer about to run?  Certainly Yahoo is a company that needs competent leadership to survive.  She is what, the eighth CEO in the last ten years.  Something like that.  The last year alone seemed a revolving door at the top.  If I described Google as a risk-taker and Microsoft as (until recently) unimaginative, then Yahoo is downright boring. 

Yahoo started off as a web darling.  It was the place to go to find stuff on the web through its hand curated portal and its distinctive list of categories.  When Terry Semel came along in the early 2000s he transformed the company into a media site.  Sure, search was still there, but the company seemed to lose focus when it was surpassed by the up and coming Google search engine.  If anyone remembers, Google actually powered search at Yahoo for a while until it started to compete with Yahoo for the same eyeballs. 

Semel’s answer was to create or buy properties that turned Yahoo into a community.  And while this strategy succeeded in attracting visitors, Yahoo wasn’t doing anything that necessarily made it an essential site beyond basic search.  I think it’s the same criticism that people leveled against Google, that its search engine made it a one-trick pony.  Google’s reaction was to diversify services.  Yahoo had lots of services but none of them stood out.  They bought Flickr, and to the dismay of early users, required a Yahoo ID to use it.  And while Flickr is known to be a great photo sharing site, many consider it bland in the evolution of web technical possibilities.  Other properties came into Yahoo with the same fate.  Some, like Geocities web sites became so underdeveloped that Yahoo essentially shut them down. 

The leadership problem was so severe that Yahoo had no idea of what kind of company it wanted to be.  Is it a tech company?  A media company?  Who knew.  The disarray brought the attention to Microsoft who actually tried to overpay in an attempt to buy the company.  This is probably the most exciting thing to happen to Yahoo in its existence.  The old guard led by co-founder Jerry Yang threw such a fit as to defeat the move.  Steve Ballmer is counting his blessings having stated that sometimes the best deals are the ones that never happen.  Yahoo has never been worth the money Microsoft was willing to pay at the time of the deal nor any time since.  Carl Icahn’s subsequent invasion of the Yahoo board didn’t help matters. 

So Yahoo drifted.  Microsoft salvaged what it wanted by powering Yahoo search through Bing.  That helped Microsoft at Yahoo’s expense.  Though powered by Bing, it continued to lose search market share to Microsoft’s formal presentation of Bing.  This may have disappointed the Yahoo engineers who believed in their home grown search product to the point where staff was demoralized.  But business is business when there isn’t a central strategy. 

And that’s the problem Marissa Mayer has to face.  Give this company a direction.  Make it exciting again.  Yahoo’s social is almost non-existent compared to other sites.  Microsoft sucked up partnered with Facebook to paper over its shortcomings.  Google started Google+.  Google also started other services such as Google Docs and the online Google Apps office suite.  Yahoo still is a site where someone goes to do, what exactly.  Email?  Sure.  Everybody’s got that.  So Marissa, help this company define itself.  Develop some stand-out services that attract not merely an audience, but real attention as a cutting edge company.  Make hard decisions, and yes, satisfy the stockholders.  Essentially make Yahoo cool again.  Challenge the web for a change.  I get tired of disdaining this company, but in the past it’s made it so gosh darn easy to do.  If the question is “Do You Yahoo?,”  have a response to “Why would I want to?”  Good luck.  [MG]