Last November we all knew Yahoo cofounder Jerry Yang would be stepping down after a disastrous tenure as CEO. He spurned Microsoft without realizing the consequences, and he had no ability to describe an alternate path for the company. We weren’t alone in calling for his dismissal, and the hope was that Yahoo would find the right leader to restore their former glory. They didn’t.
In the few months between Jerry’s resignation and the beginning of the Carol Bartz era at Yahoo, there was much speculation in Silicon Valley about who might lead the once great company. People I spoke with thought Yahoo would go one of two ways. The first would be to try to find the great product visionary to lead the company forward. Their Bill Gates or Steve Jobs (Mark Zuckerberg may someday be on that list). With the right product vision Yahoo could push boldly into new territory and renew its bid to create a lasting brand and company. The second way to go would be to hire someone to sell the company, whole or in parts, and maximize shareholder value in the short run.
It’s pretty clear Yahoo went with door number 2 and chose someone who could negotiate a deal over the next great product visionary of our time. You can’t really blame them – true visionaries are by definition rare. And it’s unlikely they’d want to go to swim upstream at Yahoo during the hard rebuilding years.
So in came Bartz, and the deals started happening. We’ve mostly kept quiet. Any new CEO deserves a honeymoon phase, and Bartz barked at journalists to keep their opinions to themselves on her first day at Yahoo: “It’s been too crazy. People outside Yahoo deciding what Yahoo should do, shouldn’t do. That’s got to stop.”
But the honeymoon ended when Yahoo signed away its most important asset for next to nothing. Yahoo went from being in the enviable position of no. 2 in search to just another portal, albeit a big one. And despite what Bartz said, she held out hard for a big up front cash payment. Microsoft never gave in, and Yahoo caved. Now they’ll watch their search market share dwindle, just as AOL’s did after surrendering search to Google earlier this decade. And since all the people have left or are leaving, there is no way for Yahoo to ever recover what they once had. What in the world will happen to them if the government rejects the search deal? They’d be in very serious financial trouble almost immediately. I almost wonder if Microsoft secretly hopes for exactly that to happen.
Bartz played an excellent game of checkers. It’s just that her opponent was playing chess. And the history books will not be kind.
So what’s next for Yahoo? There’s talk of social stuff, but no one believes it. Products are being sold and shut down left and right. Yahoo may stumble along for years without a forced sale. But there are no real product gurus left there to do anything spectacular and risky. What’s Yahoo’s equivalent of the iPhone? They don’t have the stomach to try it, whatever it is.
Bartz says not to worry, that middle America still loves them: “When you get outside New York and Silicon Valley, everyone loves Yahoo.” You know who else used to say that as they began their long, slow decline? MySpace. But what they miss is that the new generation of Internet users is all about Facebook and Google, no matter where they live. Without a bold and risky plan to reshape the company, there is no way to get back those users.
Do I really want Yahoo to bring Jerry Yang back? No, not really. He loves the company but he certainly wasn’t the leader Yahoo needed. His tenure as CEO was a sad affair. But he did have passion for the product, something Bartz lacks. And frankly, he seemed willing to turn down every offer from Microsoft. After declining the initial takeover offer, maybe that was the best strategy. Giving away search hardly seems strategic.
I miss Yahoo. They used to be warriors, with a bite to back up their bark. You can throw F-bombs all day long, but if you don’t have the product muscle to back up the bluster, eventually it just gets old.
I agree !!!!!!!!!
to what? That all the TC sheep were wrong to scream for Jerry’s departure? Agreed!
The internet is a tricky marketing animal to monetize, especially the consumer side. Google succeeded in search, but it doesn’t really sell anything, it just acts as a yellow pages for companies that sell goods and services. It also gained traction after the dot com bust, and succeeded as more consumers got t1 connections.
Yahoo seemed to move to a Media company, producing content, expert content, etc. By selling search off, it might have more freedom for future partnerships or sell-offs. It could even partner with Google on other ventures.
Yahoo has a powerful user base, so does AOL. Yahoo Sports is a great brand, etc. But I do agree that they should move forward with more consumer products or purchase more companies.
Those who are born and living out of internet, dont understand it. People dont like yahoo services mostly because it is buggy. My internet connection sometimes disconnects and reconnects – by the time yahoo mail hangs. And i left yahoo mail for good, robustness is first in gmail which retries by itself if connection fails.
Innovation is one thing, but plugging holes with time is very basic.
Arrington nor me know the expenditure of maintaining full internet cache and searching it. Outsourcing the search was a must, only question of time.
It seems preposterous questioning the search deal, only the bargain was contentious.
Its just BLAH now…it looks like crap, and hasnt done anything innovative in years.
Yahoo mail works perfectly fine for me. I think it has one of the best email interfaces. Thats the only saving grace for Yahoo!
i had a yahoo email account before i could even talk in full sentences. i used to read news on yahoo, listen to music, and do so much. i had a yahoo email account before msn. i really liked the old yahoo email interface before they started changing it, before it started becoming buggy and before yahoo became a multinational billion company. yahoo is dead to me. it sucks. i tried really hard to keep up being a yahoo user but better products always came along and for as long as i was loyal i was also always searching for something better. yahoo is stuck in some rut. i don’t know what’s going on with the company. something needs to happen with them because it’s sad watching one of my favourite companies continue to piss me off. i don’t understand why they can’t take advice, comments good or bad from their users and then work on that. i stayed with yahoo in the end for flickr, but even my love for flickr wasn’t enough. i closed it (i lie and say it was by accident but i made sure all my contacts and necessary info was with other email providers) and i am happier. i don’t even have yahoo on my radar anymore.
Carol Bartz is a good executive….meaning she is a good MBA grad with experience…but she lacks vision…that is one thing you do not want to lack in these times.
Yes, you don’t just need an MBA from the old school of corporate world, talking of Yahoo lovers in middle America. You want someone who can come in shots with just a laptop and acquire FriendFeed overnight (someone like Mark Zuckerberg. Forget about Steve or Bill, they are too big for Yahoo!)
The CEO must ALWAYS have vision. It’s his/her responsibility to set the company direction, regardless of the times.
you should bold and caps the “she lacks vision part” and maybe someone from yahoo reading this will see it and it will all start making sense.
what don’t they get. their product(s) is not doing well. something needs to happen. what don’t they get? this stupid social Y!ou campaign is so crazy. social isn’t stupid, no, the way yahoo is going about it is what’s crazy. how do you ask people to be Y! supporters when you’re branding it as Y!ou.
one good scout and a vc fund and yahoo could come back. they need a name change and a branding facellift. microsoft got a search makeover with bing.
i was looking at the yahoo logo posted here and i think it’s beyond time for yahoo to change their logo configuration. we will still know yahoo as is but they need to change the logo and rebrand. i think it will be stronger and they can always go for a minimalistic feel. so much can be done for them for so little and not a lot of money. they just need to be willing to embrace the change. i mean i can’t even tell you how many changes msn/windows/hotmail has gone through, and now windows live search is bing. anything can happen. why isn’t yahoo moving on. almost 2 decades. i don’t want the 2 decades mark to come in 5 years and to still be looking at what i used to like about yahoo and think why. what is really going on at yahoo? why can’t they just take some advice and maybe change things. what’s so bad with change. they are willing to buy and get rid of companies faster than i can blink, and they are willing to make their search data into ms dummy bought for nothing product but they can’t upgrade the company, the company goals, the company aesthetic and the application of the company. what is wrong with them.
Quite simply,
Yahoo is to tech what General Motors is to autos.
An insular company focused on patting themselves on the back, insisting that people love them. Reality is the markets has changed and you failed to adapt.
Here’s looking at YOU Jerry.
Problem with your analogy is that GM is still top dog in sales. The fact is GM has the largest market share, with Toyota in second. Yahoo isn’t top dog. They have the problems you describe but not the benefits of being in the #1 spot.
Funny how everyone says that GM makes cars that don’t sell, but nobody sells as much as GM.
Actually bald guy, Yahoo *is* #1, or at least “big three”.
Google (#1 in search, #1 overall traffic)
Facebook (#1 in social networking, #2 overall traffic)
Yahoo (#1 portal, #3 overall traffic)
The analogy works well – Yahoo has a #1 position – or at least a “big three” position, but has failed to capitalize on being a great “portal”, instead spending all their time trying to be a Google or Facebook. Perhaps the world no longer needs a good “portal”, but I still do.
“What’s Yahoo’s equivalent of the iPhone? They don’t have the stomach to try it, whatever it is.”
Yup, you hit the nail on the head.
i’m not even worried about them having a phone, although it would play into their whole “social” mantra now.
what is yahoo’s next focus on actual prooducts for users?
poor yahoo this lady sucks
I have one bone to pick:
Myspace’s decline wasn’t slow.
It really has been painful to watch. Yahoo!, like AOL is the funy company to beat up on.
But AOL seems to be turning around the ship that was headed for the iceberg, and Yahoo! looks like it’s going to sink like Titanic.
We all like to watch people succeed, it’s quite painful to watch them fail.
Just like a great philosopher slash businessman once said: “First rule of business: Don’t get high on your own supply”.
Deep down to the nerve Michael, nice job.
No, that was the second rule, the first one was “Never underestimate the other guys greed”. If you are going to quote from Scarface, try to get it right.
Ding!
Or maybe, “Bing!”
Which is part of their whole problem.
I’m kind of sick of people always blaming Yahoo’s problems solely on whoever is sitting in the CEO chair. If every CEO sucks that badly you know who is to blame? The board who keeps hiring and frequently waiting too long to fire them.
Bartz inherited a broken company already on the decline with public company pressures that were only getting worse– what’d you expect? Name a rockstar product visionary would have taken that job.
I think she’s performed admirably given the task she was given. Yahoo was given plenty of chances to turn things around and the reality of public company life is shareholders won’t give them anymore. If it wanted a shot to retool itself as the product visionary it once was, Jerry should have taken it back private before the credit markets melted and he had the chance.
yeah yahoo’s board was at least twice voted among the worst by business week. no stretch to figure that one out. they wore a halo for a while when the company was making $$$, but over time it became clear that they were know-nothing professional board sitters. come on, they hired terry semel. and then gave him raises.
but lets not let the rank and file managers off of the hook either. when the money is rolling in, no one wants to play the mean boss. problem is, mr. nice-guy can’t handle the dips.
yahoo’s problem: too many problems
Sarah is correct – you’re not going to turn around yahoo! overnight, look how long it took for Jobs to turn around Apple.
i guess you’re right in the sense that Carol is a hammer and so everything she sees is a nail, and the board should have realized that. still, the situation is sad.
“Carol Bartz is the Sarah Palin of search”
Thats messed up!
She lost all credibility when she said that Yahoo was never about search.
that one hurt especially for old yahoo users. but i guess this is how things are in business. i’m glad i stopped searching with yahoo before she said that cause that would have made me quit.
Carol Bartz was brought in to turn the company over to Microsoft, who had already destroyed much of the stock value after their initial offer was declined. Hundreds of Microsoft shilling writers all over the internet got what they were screaming for. You don’t deny Microsoft and live to tell about it. They own the tech internet, they own Wall Street, and they own powerful people in Washington. and can make anything happen.
you might not be so far off in the way she actually conducts herself. i would think a hammer and nail is too sever, but i’m not sure all of yahoo’s problems are her fault. she’s new there (isn’t she? was she a yahoo user before she went there? did she follow what was going on with the company before her hiring?) so maybe she gets some time, but i can’t really blame her that i’m disenchanted with yahoo i guess. i just wish she didn’t speak in that backhand kind of way like she knows better. it’s interesting to observe. but i guess she must know better because she’s well educated and has a lot of money and must be very very smart. hahaha maybe yahoo will become like twitter and their goal will be to become the pulse of the world. yahoo has a big market though. their problem is that they seem stuck. there’s no excitment or buzz about them. they are lost in the conversation. i think it’s good they are focusing on social and community, but they can’t just do that. they have to think forward. moreso than a lot of other companies i think for them to revive they need to think more and have a longer outlook. use the force yahoo and look into the future.
I love Flickr. I used to love Upcoming. I know Yahoo has worth. Do they?
Of course, those are things Yahoo! bought, and then did their best to break or neglect. Their respective founders have since fled the scene.
Michael, you remind me of all the people that said Japan is dying just because its not growing as fast as it once was and China is the new sexy kid on the block. The reality is that Japan is still the second largest economy in the world and Yahoo is the second largest Internet destination in the world by far. They still have time to parlay that position into catching the next wave whatever that may be. Any hot product start up with the next big thing would jump at the opportunity for a strategic partnership with Yahoo.
@adlin, as far as your economic outlook, Japan will be overtaken by China next year(http://is.gd/3Avnc) as it is the new economically sexy kid on the block(not politically for obvious reasons….)
You miss the point. Japan is a very very powerful economy and when you look at per capita GDP it is going to be ahead of China for many many years to come. Yahoo is going to be ahead of its rivals for many many years to come and has plenty of run way to launch new new thing..just like Japan has plenty of run way to succeed in whatever industry it decides to tackle next.
I’m not really qualified to discuss the comparison between China and Japan, but to me it looks like Yahoo! are not making any long-term strategic investments, just a bunch of tactical plays and I think that is the key issue here.
There doesn’t seem to be *any* product innovation coming out of Yahoo! any more and that will make them irrelevant in the future unless they up their game.
China Japan are far from adequate analogies in this game. Y! will go the way of the dodo like AOL. They will neither create or catch the next wave – they are a corporate dinosaur; have no vision, are risk averse, and too slow to react to the new fast moving market conditions. They can only acquire – and likely only to suffocate any new biz as they’ve done with their latest buys. So what’s left – a slow and painful death since the new generations will avoid them for lack of cache – something they will no doubt try to create, as they don’t understand that the internet – now morphing into the “mobnet” as we speak is a young man’s game- something not in their blood or DNA. Yahoo is to become the living dead (like AOL) – its just the a life cycle!
But most noteworthy is that we’ll be seeing and saying the same of Facebook in a couple of years, that is unless Mark Zuckerberg can become the next Steve Jobs – but the odds are against that!
i agree more with wzass here. what is carol bartz foucus (es) for y! what does she want in a years time, 5 years, 10 years etc…or are they thinking more about getting their finances set up and then rolling out programs, because yahoo needs that next step of innovation. they need to be that next company or i just figure they’ll get even more lost in the conversation.
Like Jojo the idiot circus boy with a pretty new pet.
- Tommy Boy (1995)
You’re right, I miss the Yahoo! of old. I worked for Right Media for a while, and the company that once was is no more. Quite depressing actually.
oh it was looong gone years before rRight Media was even founded
“What in the world will happen to them in the government rejects the search deal?”
Should be ‘if’ instead of ‘in’, I’m guessing.
Mike????
You worked SOOOOOO hard to get Jerry fired. WTF is this?
Now that’s 2 faced.
I thought yahoo missed their chance when they tried to mimic ebay and amazon with yahoo auctions. Amazon auctions stunk too but they found a creative way to get regular plain people to back up their inventory. Ingenious. Inquiring Toys R Us wasn’t a bad move either. Now Walmart might crush Toys R Us retail stores. I don’t think they can crush Amazon with the Toys R Us connections.
whah???? yahoo auctions was a minor, less than trivial effort. i know for a fact only three people worked on it. yahoo lost there mojo on lots of things…auctions wasn’t it
3 people huh? It showed.
yeah it was an absolutely terrible product…yahoo prided itself on the curiously small teams that could crank out products back then…but when you are managing a $100bln company and making the c-level execs billionaires, maybe putting more of that $$$ into real headcount isn’t a bad idea
yahoo tried to boostrap N little companies on the back of their infrastrcuture and home-page firehose of traffic. it actually worked for a while…1999-2003
was excited for y!auctions…more because i didn’t know how yahoo would get that to work for their users and i don’t understand why they figured they needed such a portal, but after i heard about it and saw it, never paid mind to it ever again until right now. why don’t they ask their users what they want and get feedback on the things they are doing. we are a mine waiting to be mined. and we don’t charge to give our opinions. it’s all free. test yahoo products on users.
Yes, I agree with most of the things you said but I am still wandering why Yahoo turned down the 50b offer from Microsoft.
Am not sure, but as far as I remember it was almost 35USD per share and their value was something like 24USD. Seemed like a good deal to me.
it’s called asian pindick syndrome.
wandering?
Yahoo has sucked since the late 90’s. I used the mail cause it was the only acceptable game in town. I used Answers because I found wasting my time earning points and occasionally getting a good answer to be of value.
There’s nothing else Yahoo has and has ever had, imo. They really are the new version of the old AOL
lol so the new aol is better???
actually don’t answe that. aol has always sucked, but they’re making changes and i think it will benefit them in the long run. i closed my yahoo account but i still have my old aol accounts. apparently aol is still big in america, although i don’t know why. i understand why in the past but i don’t get aol’s appeal now (the past 5 years).
oh come on, jerry was one of the worst ceos of the last ten years in ANY industry. the amount of shareholder value he eviscerated either through meandering indecision (having never built a viable strategy for y) or outright stupidity (not selling to MSFT)….jerry should be escorted from the campus…i have no idea why he is allowed to be connected to the company at all
it must be obvious even to you dullards what bartz is doing…she’s cutting and cutting and cutting. if you can’t grow a tree, cut the weeds. she’ll cut and cut and be hated, but yahoo will finally be in shape to be bought. i am almost 100% sure that her talks with ballmer have included some notion of reopening discussions if she is willing to do the trash removal first and save ballmer the trouble
honestly you have to be retarded to want jerry back.
YAHOO, all I can say to you is that people like play new toys. Go and do research on what people are upto these days and come up with 10 new ideas and promote them well.
I still remember after myspace.com sold then facebook become the next new toy and after that people changing and after tweeter. So what is next after tweeter sold? YAHOO you have to think of one now and launch them. If you can not think of one then put in seed money to all small startup. I am sure one of them will be next Google. Create a seeding camp and test the water.
lol. but didn’t you read what she said. people outside of the company dictating what the company does. if that doesn’t come off as being dumb i don’t know what else she needs to say. no one said that a company needs to spend lots of dollars adhering to every whim of all it’s customers, but you are a company that has users for a reasons. there is a relationship between provider and consumer. they are not doing a good job in connecting with their users.
Definitely agree. This new “strategy” is sooooo lightweight it almost seems surreal. This whole thing takes me back to 2000 when company’s could get by (and do well) with this type of strategy.
I agree with Sarah Lacy’s observation about the board. It’s obvious that is a key reason things have progressively gone downhill during the past years. Nevertheless, don’t agree with Sarah that Bartz has performed “admirably.” To her credit, she’s a real manager/leader and understands the software industry, but this is not her game. This is really chess and playing checkers in this context is the definition of lame and, worse still, a disservice to shareholders.
McKinsey and Bain have been fucking Yahoo for the last 3 years like the whore that it is. I think those places have sucked around $50MM out of that hellhole.
it still thinks like a real-estate company. build a product, stake your claim, and it’s market will be yours for ever. like the front page, mail, search, etc.
the business of the web has become more or less like the movie business. users are moving from one “in” thing to another at 2-year cycles. products are hitting a plateau that they aren’t going to break out of.
yahoo needs a system of innovation cycle. or may be like the MLB farm system, if you will. place bets, double-down on potential winners, take it as far as they go, drop them. get back to the pipeline.
yahoo has no depth in the pipeline.
This is your best post Arrington.
TC hated Yang when he was in office. Now you want him back?
Did you read the post at all? Like when he said he didn’t really want Yang back?
Did you read the article? Or just the title?
I’ve owned a Yahoo! Store (actually several) for many years now and have always been frustrated with the lack of attention to our services. There are 40,000 of us Yahoo! Store owners and we get very little support other than a thank-you-very-much for our payments. The Yahoo! Store blog is updated 1 or 2 times a months at most. At no time did Yahoo! Search do anything worthwhile with Yahoo! Stores. In fact, for a while, Yahoo! Stores were charged MORE to be in Yahoo! Shopping than non-Yahoo stores. It made no sense. And now it appears that Yahoo! Stores is on the shopping block which is a real shame. Despite my bitchfest, Yahoo! Stores are still the easiest – by far – way for small retailers to build a store on the web. Very little programming is required and one can build a simple store quite easily that actually converts and sells. I fear we’re now going to either have to migrate to a complicated more expensive platform or we’re going to get owned by some very non-user-friendly company like Network Solutions. Sad. Sad. Sad.
There are probably some Lisp dust bunnies still blowing around in the innards of the system, clogging up the tubes.
I don’t know why people hate on Yahoo so much. Sure their mail and search isn’t as good as google’s but it isn’t too bad. Yahoo search’s Open shortcuts is a wildly underrated feature that makes searching multiple sites (including google) so much easier, since you can do it all from the address bar. As per the homepage most people don’t like the fact that it’s too busy but I prefer the information overload (I would imagine many people do as well). They just need to get their operating costs under control and streamline their company to be in good financial standing which I think is what Ms. Bartz’s goal.
Sometimes I wonder who’s more pathetic. Microsoft for standing there as the internet and search race started without it, or Yahoo! for being in the lead where they should have understood the significance of the prize and slowing to a jog to let Google pass them.
yupp. i’m there standing too. i always wondered why yahoo is the way it is and i think it’s because of lead feet, turtle speed and maybe concrete/staid/dead minds. there’s something seriously wrong with that company. i mean if all they are happy with is making money then fine. then don’t come to me asking me to be a client of your damn product(s). give me a break. i don’t think it’s all this new leaders fault but yahoo has been sucking the big one for a long time. the things they have to do to even show that they are willing to listen aren’t that hard. shut up and change already yahoo, cause your shit is getting real tired. it was tired in ‘99 and now it’s 2009. you’re almost 20. get with the program and change already and don’t treat your users like they are second rate.
the guy above, spandana, who used the realestate or mlb comparison is on the money.
I don’t know much about the insights of Yahoo, but I think what Yahoo needed was some strong new direction. Bartz from what I’ve been reading, is very straightforward and tough individual and that might help Yahoo to find its way. I think Yahoo still has the talent and the people inside the organization that is ready to make a difference, but the years of bad morale, no direction, talk, and basically slow culture made it seem like they are losing the game. After Bartz’s appointment as CEO, they have disabled yahoo briefcase, and other yahoo features. They pushed out the new Yahoo.com main page, new yahoo mail, and search deal. They have been pretty active after Bartz’s hiring as CEO. I think they are definitely in the right direction. It just needed new and strong leader like Bartz. I definitely think Jerry Yang is the right person right now for Yahoo. He doesn’t seem very aggressive considering the situation Yahoo is in right now. Yahoo will be fine I think under Bartz.
I think there are fundamental issues and aspects that were not discussed here yet. Yahoo! once had a lot of followers when Internet services were new to the people, so we perceived all those as great tools, but they never reinvented them or themselves as a company. Yahoo! is the same company it was when they started 10-12 years ago, and the strategy continues to be the same for them, so there’s no place here for Y! in the new game while there are so many intelligent players (small and big) with neat and useful products/services.
yeah and that is the problem. yahoo users like me (used to be i guess now i have to say i’m an ex-y! user) don’t stay the same forever. things change. yahoo has changed a little but not enough for it to be significant or impactful. i mean i might be used to the homepage of google but google is always changing. say what you will about them but they embrace CHANGE. they do. yahoo hmm in my opinion does it at a way slower pace and by that time i might move on to the next micorsoft product or the next apple product or the next google or whatever. yahoo used to be the new thing. then they became the huge standard and now they just are the same b.s. suck yahoo i knew from before. a lot of the new products/changes they have wasn’t enough to keep me a user and i cried when i cancelled my account because it’s my oldest email account. i had to get rid of my flickr too because i no longer have a yahoo account. for all it’s crap i still have an aol account. aol is making changes (their email system still sucks. i really liked the yahoo email set up the best but even msn and gmail have improved. best filter system was yahoo imo).
Mike, this is really good article, good arguments.
They need to get Jerry back, at least he loved his stuff. Then get back to the basics of building good products, hopefully not everything is over for them.
Jeez Mike, so Deadpoolesq.
I have read too many times you talk up bitter truths about companies only to see later these things come to light. I really hope Yahoo can find a way to lead new web trends again.
yahoo=aol
Why are true visionaries “by definition rare”? Rarely hired as corporate CEOs, maybe, but I think they’re around if you want to look for them.
Yahoo! had their visionary in Jeff Weiner. He was the only one who could articulate a clear and inspiring strategy inside the Big Purple.
The company’s had their share of opportunities to turn things around, but they continue to stumble along.
Jeff Weiner? Jeff Weiner?! Are you out of your mind?
How long have you been sitting on this article?
a long while.
how long? you just put all your y! fustration in their and decided to make your points now? do you think anyone is listening or do you think this will fall on deaf ears and that yahoo will go on the next 5 or 10 years with this same crap?
Well said. If Bartz turns out be Semel with a potty-mouth, it bodes ill for Yahoo indeed.
I agree, Yahoo is dieing, I do not use any of their products, only Flickr and some times Delicious (Yahoo bought both.)
Yahoo does not know what it is, they want to be a tech company like Google, then they say we are only a content company!
Yahoo needs to rock early tech adopters the way Google does, bring new hot apps. bc if the early is rocked they ll bring the rest.
I do not know much about the current CEO, but i feel she is not passionate as u said Michael.
if it is not Jerry, then they need to acquire a hot startup and make its CEO Yahoo’s new CEO. and btw where is Jerry’s plan we heard about 2 years ago of integrating all Yahoo’s product under one Social Network?
I love Yahoo bc it was never an evil company -unlike others- and i wish them the best
It is a shame to see a once proud company I worked for sliding away. I feel like I’m watching a long, slow fire sale going on.
Yahoo Pipes is very nice – it’s an innovative service that has no comparable rival. Why can’t Yahoo spin up more services like that?
Placemaker, BOSS, YQL are great tools from Yahoo.
wow, this is actually a great post. I agree with you view on the landscape of the Yahoo! business. The comparison you drew between AOL & Yahoo! is a good one, but AOL also did decline because it wasn’t able to compete in the high-speed DSL internet market.
I predicted from day 1 that Bartz would be a failure. She has zero knowledge of the industry, and no strategic vision for Yahoo. She’s a great corporate politician, but a terrible leader.
Her first act on the job was to fire a lot of people, and shift management around. Bad sign. Wanted to be seen to be ‘doing something’. Cynical corporate politics.
She did the Microsoft search deal because people criticised Yang for not doing it, and Carl Icahn favoured it. She did it to save her own hide, not because it made sense. That’s corporate politics not leadership.
If she were a real strategic leader, she would answer the vexing question of ‘what exactly is Yahoo?’, choose a market Yahoo can be the best in, focus on it, sell everything else, and monetise the hell out of the core product.
All this fluffy nonsense she spouts and throwing ad money at the problem….she really has no clue. Massive failure imminent.
Good article.
However, I do have to agree with Ms. Bartz when she stated that Middle America is still crunching on Yahoo properties like crazy. Yahoo is Web Lite, and it’s verticals (Yahoo Education, Yahooligans, etc.) are super popular with people who don’t spend all their time online, like most of the folks commenting here at TC. :>)
That doesn’t excuse the somewhat iffy decisions that are coming out of Yahoo hq right now, but it goes a long way towards explaining why they do what they do. Millions of Joe Interwebs equals cash in the bank.
Yahoo is in mess at least partially due to you guys uncontrollable lips. Jerry is so unfairly treated by media, and time will prove he is the only right CEO Yahoo has in this decade. The CEO before Jerry, someone called Sameol or something drove Yahoo to the wrong track for the same reason like the current CEO this Bartz lady who has no idea how to run a web company. Yahoo is down in the drain simply for its lost focus and has no idea what is important to its user. I am a paid Yahoo Messenger user making international calls. The service is severely deteriorated and I have to leave and stop recharging the service. The Yahoo mail I used for many years, including my wife’s account, becomes so bad and unresponsive and we have to switch to Gmail. So sorry for Yahoo, and sorry for you guys to make unwarranted remarks on Jerry. Now Yahoo has a taste of this Bartz lady, it surely doesn’t taste good.
We really can’t know yet what Carol Bartz is going to do with Yahoo. Yahoo right now is in a prime position – right where Apple was in the late 90’s when everyone was predicting its death. Apple had branched out into way too many spaces, and one of the first things that Steve Jobs did was cut away a bunch of stuff (i.e. the Newton). If Carol can cut it away by selling it instead of just discontinuing it, then why not?
A good CEO can absolutely turn a company around. Look at Palm, which is doing really well for how small of a company it is, look at how Rubenstein turned it around and he’s not done yet by far. There’s plenty of stuff Yahoo can do to reinvent itself, because the name is what allows people to actually pay attention and give you a chance with whatever new thing you decide to use to turn you around.
If the only thing that Bartz tries to do though is sell off the company for the maximum she can get, then she deserves to be lynched by her shareholders.
Getting rid of Jerry Yang was *probably* a good thing for Yahoo. On the one hand, Yang’s the guy who really believes in the brand and if there was ever a guy that you knew would actually try to bring the company back, it would be Jerry. The problem is that he believes too much in the beginnings of the company – in search for instance, to the point where he denied acquisition by Microsoft and keep running races he should have been able to see that he had already lost.
I should analogize: Jerry Yang is a father who’s really, really proud of his kid, Yahoo. So proud in fact, that he pressures his kid to be the valedictorian in school, and do a ridiculous number of things at once, all with excellent levels of success, so that the kid can become a top doctor like his dad. Well, the kid’s just a normal average kid, who can’t cope with the stress, so he breaks down and can’t perform to the level that his father wants him to. All that happens is that the father gets angrier at his “lazy” son and his son keeps getting more and more miserable. If we get the father to back off (i.e. fire Jerry Yang), then the kid can go do something else, lower pressure, and experience reasonable success.
I would like to extend this example – and analogise a bit further: imagine that father wants his child to become a doctor (read: search company), wants it badly – no matter what. But the market is tough, competitors are extremely powerful, and child doesn’t really love the idea of being a doctor; instead he wants to be a, say, journalist (read: media and social company). If stern but fair mother will realise it one day and change the priorities, father and friends of the family won’t take it lightly, but given the decision was correct, child can be more than successfull further on in a new area.
dumbest thread ever
The real question is, what are the real chances of reinventing or turning around a Yahoo or AOL long term? Perhaps Mark Cuban’s approach is best?
http://blogmave...ycle-challenge/
“Mark Zuckerberg may someday be on that list”
Really? That kid got lucky. You can’t compare him to Jobs or Gates.
Has Zuckerberg done anything that is visionary? Geez Arrington get off your knees and let Mark get back to work.
Great post Michael!
Two questions-
1. Why did MSFT offer so much money in the first place?
2. Don’t you think Steve B is also a failure to not execute a deal? If it were Larry A, you wont have this stupid debate. The company by this time would have been sold and broken down to bones. He has the will and ability to execute. Steve B lacks that too. Call back Bill Gates……
1. to buy users for msft services. if you can’t grow traffic organically, buy it. thats what he is doing with bing
2.????? ballmer is basically buying up the parts of y! he cares about on the super-cheap. whats puzzling is why bartz is giving away the farm
this is true. yahoo has rolled over and given up it seems (long term anyways. i mean they want to give up their search but do they have an idea on what they are going to provide aside from search. what are their new ideas. is it become the number 1 social community provider or what. so they aren’t about search but they are about content? what the hell is going on at yahoo?) to ms for crap. i didn’t like yang much but i didn’t want yahoo to wave the white flag either.
Hey guys – quick reality check… while i agree whole heartedly that Yahoo! has no visionary product leader, and is in desperate need of one to put all the clamoring and clusless women on their exec team aside… what has Google – seems to be everyone’s favorite on this post… what product has Google really come out with, outside of Search, that has taken the world by storm? Lots of cool little products, but even with Google massive brand favor, nothing’s really shattering user records… so what’s all the love for Google about? (or even Twitter or any other startup covered on TC that has 1/100 the users of Y! and 1/1000 the revenue)
maps, mail, calendar, docs, earth, voice, analytics
maps is basically lots of money to providers. mail – well, it’s third with no chance becoming first. calendar? docs? earth? VOICE?!?!?!? bloody hell it’s not even available outside of the United damn States, what are you talking about?! Is it world-popular products? Are you sure?!
Roman,
( I am not employed by Google nor any vested interest in it)
You are missing whole point. I am not sure why you are missing a point about google where others get it-
1. Google is building a series of Apps based on Web based technologies.
2. The idea is to create an eco-system where all the basic needs are satisfied.
3. The main anchor is search (for now).
4. Users like to avoid going 100 places even if each app is not THE best so far as each is satisfying.
5. This strategy works very well for billions of users.
This is classic business model. You will find that Google may have mastered that art. So, every time they try to create (buy) next cool thing, it needs to be just attract enough attention.
I am actually impressed by Google execution of this strategy.
Exactly.
I meant “Exactly” to “Joe Montana” not to those arguing against him.
I think you are looking it wrongly. See my reply to Roman.
I missed one point-
Google is going towards what MSFT was afraid of when Netscape was around i.e. make OS secondary.
With Chrome, Google Search, Android, Google Docs, Chrome OS, Google App Engine, the main dependence on OS is gone.
With AJAX, HTML 5 and proposed direct OpenGL integration from browser, you can make OS dependency to Zero.
Now where will MSFT go? The OS and Office is THE only leverage MSFT has.
Google thinks that that should be the execution plan to get MSFT out of the way.
SO, asking “other than Google search, what else Google has done?” is naive.
Google knows what they are doing.
I am also impressed by Google Wave. If it can scale, it will make a big difference.
I guess what we say here will never get the people who need to listen. But the heart of the topic is that Yahoo has not created a good product for a long time. And all its services are so diverse and unlinked except for probably the common Yahoo login.
So yes even I would say if things are so rough, then its time to think outside the box. Carol needs some time, true, but unless you take challenges, you are not worth it on the web. Just huge pageviews do not count anymore.
Get a CEO from a small high octane startup and ask him/her to lead a small team to restructure the company. Brings assets under the one Y! brand and make sure you think revenue too. There are a number of good products under Y! (acquired ones), so use them, create a Y! brand.
I think if you brought in a CEO from a “small, high-octane startup”, she or he would burn out in frustration in days. It’s a big, siloed company.
Carol and Ari are doing exactly what you suggest – pushing products into alignment, reworking the infrastructure that supports them so integrate social features, etc. They’re getting rid of acquisitions that seemed like possible breakouts but never broke out.
With luck, the result will be to make the experience better for the current enormous user base and enable future products built on the commonized base.
This all happens slowly, but each simplifying and commonizing change makes future changes easier and faster.
We’ll see if it all pays off, but it’s way too early to know.
Really solid article, Michael. Bartz is clearly not the cause of Yahoo’s problems but she is also clearly the shepherd of a mindset; namely, an unwillingness to define the “patient” (Yahoo) as deeply unhealthy and destined to die (sooner or later) without a major change of lifestyle.
Perhaps if they had articulated a message of what Yahoo is changing into, what set of outcomes people should turn to it for, they could have grown into a new self.
Instead, they will spend $100M in a campaign explaining how it’s all about you, all the while their many properties work together in a less than the sum of the parts fashion.
Well, the reason they thought the ad campaign was worth doing is that they’re unrolling a set of very visible changes in the most-visible parts of Yahoo.
If you don’t think Bartz has said Yahoo was deeply unhealthy and if you don’t think a major change of lifestyle has been going on, you haven’t been paying attention.
the change in lifestyle apparently is to be come more social…does that include them connecting more with their users and taking feedback from yahoo users around the world to introduce new changes?
Michael, the sad reality is that Jerry Yang never stepped back and still runs the company behind the scenes. He’s still a shareholder… He chose Carol Bartz… He does meetings…
Seriously, the real problem is that Yahoo has too much Jerry, not too little.
i agree. when he named that road Semel Drive, he obviously has no clue….