Yahoo: Booboo and Boohoo

August 16, 2010

I wanted to snag one passage and run it as a quote to note. Here’s the snippet:

But there are worse things than seeming irresponsible. Losing, for example.

What Happened to Yahoo” contained a couple of other gems, and you will want to read the complete article, not my comments.

The author was a Yahooligan who makes clear he had an idea that Google later emulated. Too bad for Yahoo, of course. Messrs. Wang and Filo had other fish to fry. Search was not on the menu. Banner ads were.

The two gems in this write up, in my opinion, were:

First, the Internet bubble made Yahoo wallow in banner ad revenue. Life was good, so why focus on more difficult aspects of running a business. As a result, Yahoo fell behind in its Overture revenue method. The Google was inspired. Yahoo complained and got $1 billion or so. Then Google raced right up to $24 billion as Yahoo stood on the sidelines and watched.



Second, the article describes how Yahoo was, at its core, pretty indifferent to technology. Some camouflaging actions were needed; namely, focusing on easy sales to big dumb companies, describing itself as a media company, and hiring good enough programmers.

Is this an accurate description of Yahoo? Pretty much, but there were some twists and turns within the company based on my research into Yahoo for a large, clueless client over a period of three years. Here are the points that warrant some additional color:

  1. Yahoo bought companies, operated each in silos, and created a cost structure that was and still is difficult to control. What’s interesting is that Google seems to be heading down this slippery slope at this time.
  2. Yahoo management did not manage. In one interview, a Yahooligan suggested that units within Yahoo operated as separate companies. Now that’s a recipe for success. Just ask anyone who worked at Booz, Allen & Hamilton when folks were rewarded for taking clients from other BAH professionals. The shark thing. Fun.
  3. Yahoo’s own technical staff convinced itself that it was really into cutting edge stuff. Sorry. Yahoo had some winners and converted them into so-so outfits. There was the rewrite. Then there was the Flickr – Yahoo Pictures or whatever it was. Silly stuff.

Bottom line: Yahoo does not matter too much to this addled goose anymore.

Stephen E Arnold, August 16, 2010



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