Yahoo: Costs Come Home to Roost
October 22, 2008
By now, you have read the news about the layoffs at Yahoo. If you missed the story, the write up I found insightful was the Guardian’s write up here. The Guardian story quoted Jerry Yang as saying:
We enter this slowing market with competitive advantages as the destination of choice for consumers and a leader in providing online advertisers with the broadest set of advertising management tools and products in the industry. We plan to continue building on those strengths.
This is high quality word smithing. When I read this, several thoughts went through my mind. Before I lose them, here they are:
- Historically Yahoo has operated with its acquisitions operating in silos. Silos mean duplication. Duplication means costs. Fixing silos is not easy, so controlling certain technical costs will be difficult, even for Bainies.
- Microsoft and Yahoo are companies that have groups working without much cooperation. I cannot share my source, but the lack of cooperation has spilled over into the tech group. There are sharp divides by silo, technology, and even programming languages. Divisiveness makes it difficult to get the information needed to know where to make changes. Even Bainies will be flying blind when trying to unwrap Yahoo’s technology.
- Yahoo has tapped some vendors to provide certain services. Some of these vendors are dug in deep. Getting these folks to change their agreements or slash their fees may be hard to do. Bainies will be maxed trying to get these costs to behave. I’m thinking of the Yahoo project I heard about regarding data transformation for advertisers. I wonder if an advertiser can get information about demographics of users across Yahoo’s services.
- Buying AOL will boost costs. No comment needed.
- Losing Google will affect revenue and ultimately increase costs as Yahoo tries to revivify online advertising.
In short, I ask myself, “Is it too late for Yahoo?” One part of me says, “No, Yahoo can fix the problems.” The other part of me says, “She’s a gone goose.” What’s your take?
Stephen Arnold, October 23, 2008
Comments
-
- Subscribe to Beyond Search
Feature archive
News archive
-
