Yahoo in the Red in the Fourth Quarter

January 29, 2009

The San Jose Mercury News posted a short item whose headline tells the tale: “Yahoo Swings to Loss in 4Q” here. Sales were down. The company lost in October, November, and December 2008 $303 million. The fourth quarter is often one of the stronger for a commercial enterprise. The company faces mounting technology pressures and Yahoo may not be able to control costs for software and systems. Over the years, various Yahoo gurus have communicated to me is quite superior tones that Yahoo was better than some of its competitors. I did not believe it. Maybe now these gurus will look at Google’s performance, Google’s market share, and Yahoo’s own disarray and take action to address the technology weaknesses of Yahoo. Unless the plumbing is fixed, the company is not going to be able to make the type of progress that its stakeholders expect. Plumbing is important in search and online services. Bad plumbing equal uncontrolled technology costs. MBAs don’t believe it. I am not too concerned about MBAs. I am concerned about pundits who emphasize changes Yahoo should make that are cosmetic. Forget the lipstick. Get the infrastructure repaired.

Stephen Arnold, January 29, 2009

Written by Stephen E. Arnold · Filed Under Business strategy, Financial, News, Online (general), Search, Technology, Yahoo

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Stephen E. Arnold monitors search, content processing, text mining and related topics from his high-tech nerve center in rural Kentucky. He tries to winnow the goose feathers from the giblets. He works with colleagues worldwide to make this Web log useful to those who want to go "beyond search". Contact him at sa [at] arnoldit.com. His Web site with additional information about search is arnoldit.com.