Yahoo: The Value of Being a Parasite
December 29, 2015
I read a number of articles about Yahoo each day. Most of these are rehashes. Xoogler flops. Yahoo tanks. A fresh angle rare.
“Why Yahoo Needs a Monopoly to Survive” is different. The approach takes a tough stance:
Yahoo is in trouble. Despite nearly $5 billion in annual revenue, investors value Yahoo’s business at next to nothing. Most of its value comes from its investment in Alibaba–to the point where Yahoo has largely become a tracking stock for Alibaba shares.
Direct and to the point.
The write up continues:
Google has the content platform in search. Facebook has the social networking platform. Amazon has the product marketplace (in the U.S.). Similarly, in China, Alibaba has the top product marketplace, Tencent has the top messaging platform and Baidu has the leading search platform. All leading platforms have a core monopoly that is the lifeblood of their business. Why? Once a platform has a monopoly, it can use its core network to expand into other markets Every subsequent platform can leverage the platform monopoly’s network to its advantage.
There you go. A monopoly is just darned good. Quite a generalization, but I like the frankness of the insight.
How does this relate to Yahoo?
Yahoo is not a monopoly. Yahoo must be a monopoly. The logic of the article is that Yahoo is a goner unless, like a pilot fish, it attaches itself to the shark Alibaba.
What will the Xoogler do? Do the parasite move or stick with a symbiotic relationship? Yahoooo!
Stephen E Arnold, December 29, 2015
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