The Post Google, Post Microsoft Yahoo

November 6, 2008

I learned a short time ago that the GOOG disconnected the Googlemobile from the Yahoo caravan. You can read a summary of the farewell statement here. (This is a Yahoo News link so click before the content disappears. Is this a possible preview of Yahoo’s own fate?)

The Yahoo news story ‘Google Pulls Out of Yahoo Advertising Partnership’ contains an outstanding quotation in my opinion:

“We’re of course disappointed that this deal won’t be moving ahead,” David Drummond, Google’s chief legal officer, wrote on a company blog. “But we’re not going to let the prospect of a lengthy legal battle distract us from our core mission. That would be like trying to drive down the road of innovation with the parking brake on.”

I know Mr. Drummond, a Googler to the core, is talking about the legal process, but it is hard for me to keep the metaphor of Yahoo as an engaged parking brake out of my addled goose brain.

Now what for Yahoo? A quick recap is that Yahoo managed to kill the Microsoft deal at $33 a share. Microsoft is not likely to pay that much if a deal can be rekindled. Now the machinations of the US regulatory process have made the Google tie up untenable it seems. The talks with the–please, forgive this metaphor–wounded duck America Online seem to be continuing. Yahoo itself is cranking out new initiatives, shutting dead duck services, and delivering papers about its world class research break throughs at what seems to me a record setting pace.

But what is the outlook? I think Yahoo is the Chrysler of the online Web search world. Without a sugar daddy, I think we will see a high traffic site move forward without any turbo charged revenue growth in the foreseeable future. Over time, Yahoo will just drift. Yahoo can turn around, but it will need at least three changes.

First, new management. I don’t think this needs much explanation. Yahoo has struck out the last few times it went to bat. Get new hitters. Simple enough.

Second, new technology management. Yahoo is busy convincing other researchers that it is innovating. Fix the cost issues associated with the present infrastructure and development methods. I am less interested in a new break through and more interested in cost control, then service integration. I do not need Yahoo invention. Yahoo buys stuff. Yahoo does not invent stuff.

Third, operations excellence. A new president is not going to know what to cut, what to streamline, and what to put on life support. The operations leadership at Yahoo has dropped its bat, ball glove, and socks. Get a boss and an operations team able to show up for the game and make sure that the team wins.

Just my opinion, folks. Just my opinion.

Stephen Arnold, November 7, 2008


3 Responses to “The Post Google, Post Microsoft Yahoo”

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