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
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