September 23, 2016
Remember ShrinkyDinks. Kids decorate pieces of plastic. The plastic then gets smaller when heated. I believe the ShrinkyDink management process has been disclosed. The innovator? Marissa Mayer, the former Google search guru turned business management maven.
What’s the ShrinkyDink approach to running a business? Take a revenue stream, decorate it with slick talk, and then reduce revenues and reputation. The result is a nifty entity with less value. Bad news? No. The upside is that Vanity Fair puts a positive spin on how bad news just get worse. A purple paradox!
ShrinkyDink Management. Pop business thinking into a slightly warmed market and watch those products and revenues become tinier as you watch in real time. Small is beautiful, right? I can envision a new study from Harvard University’s business school on the topic. Then comes an HBR podcast interview with Marissa Mayer, the Xoogler behind the ShrinkyDink method. A collaboration with Clayton Christensen is on deck. A book. Maybe a movie deal with Oliver Stone? As a follow up to “Snowden,” Stone writes, produces, and directs “Marissa: Making Big Little.” The film stars Ms. Mayer herself as the true Yahoo.
I read “Yahoo Verizon Deal May Be Complicated by Historic Hack.” Yahoo was “hacked,” according to the write up. Okay, but I read “hack” as a synonym for “We did not have adequate security in place.”
The write up points out:
The biggest question is when Yahoo found out about the breach and how long it waited to disclose it publicly, said Keatron Evans, a partner at consulting firm Blink Digital Security. (Kara Swisher at Recode reported that Verizon isn’t happy about Yahoo’s disclosures about the hack.)
CNBC points out that fixing the “problem” will be expensive. The write up includes this statement from the Xoogler run Yahoo:
“Such events could result in large expenditures to investigate or remediate, to recover data, to repair or replace networks or information systems, including changes to security measures, to deploy additional personnel, to defend litigation or to protect against similar future events, and may cause damage to our reputation or loss of revenue,” Yahoo warned.
Of interest to me is the notion that information about 500 million users was lost. The date of the problem seems to be about two years ago. My thought is that information about the breach took a long time to be discovered and disclosed.
Along the timeline was the sale of Yahoo to Verizon. Verizon issued a statement about this little surprise:
Within the last two days, we were notified of Yahoo’s security incident. We understand that Yahoo is conducting an active investigation of this matter, but we otherwise have limited information and understanding of the impact. We will evaluate as the investigation continues through the lens of overall Verizon interests, including consumers, customers, shareholders and related communities. Until then, we are not in position to further comment.
I highlighted in bold the two points which snagged my attention:
First, Verizon went through its due diligence and did not discover that Yahoo’s security had managed to lose 500 million customers’ data. What’s this say about Yahoo’s ability to figure out what’s going on in its own system? What’s this say about Yahoo management’s attention to detail? What’s this say about Verizon’s due diligence processes?
Second, Verizon seems to suggest that if its “interests” are not served, the former Baby Bell may want to rethink its deal to buy Yahoo. That’s understandable, but it raises the question, “What was Verizon’s Plan B if Yahoo presented the company with a surprise?” It seems there was no contingency, which is complementary with its approach to due diligence.
The decision making process at Yahoo has been, for me, wonky for a long time. The decision to release the breach information after the deal process and before the Verizon deal closes strikes me as an interesting management decision.
September 20, 2016
Google has been under scrutiny for suspected tax evasion. Yahoo published a brief piece updating us on the investigation: Data analysis from Paris raid on Google will take months, possibly years: prosecutor. French police raided Google’s office in Paris, taking the tax avoidance inquiry to a new level. This comes after much pressure from across Europe to prevent multinational corporations from using their worldwide presence to pay less taxes. Financial prosecutor Eliane Houlette is quoted stating,
We have collected a lot of computer data, Houlette said in an interview with Europe 1 radio, TV channel iTele and newspaper Le Monde, adding that 96 people took part in the raid. “We need to analyze (the data) … (it will take) months, I hope that it won’t be several years, but we are very limited in resources’. Google, which said it is complying fully with French law, is under pressure across Europe from public opinion and governments angry at the way multinationals exploit their global presence to minimize tax liabilities.
While big data search technology exists, government and law enforcement agencies may not have the funds to utilize such technologies. Or, perhaps the knowledge of open source solutions is not apparent. If nothing else, these comments made by Houlette go to show the need for increased focus on upgrading systems for real-time and rapid data analysis.
Megan Feil, September 20, 2016
Sponsored by ArnoldIT.com, publisher of the CyberOSINT monograph
There is a Louisville, Kentucky Hidden Web/Dark Web meet up on September 27, 2016.
Information is at this link: https://www.meetup.com/Louisville-Hidden-Dark-Web-Meetup/events/233599645/
August 18, 2016
I love parental inputs to commercial enterprises run by real professional managers, mavens, accountants, and lawyers. The advice is fascinating and almost as amusing as a 1946 episode of “The Jack Benny Show.”
Navigate to “5 Things Entrepreneurs and MBAs Should Learn from Yahoo’s Fall.” Let’s look at each of the admonitions. Mom, I promise that I am listening to you.
The first point is that Yahoo mixed up “being in the right place at the right time” as being smart. Okay, Yahoo was one of the first directories for the Internet. Since folks were struggling to get a sense of what the Internet was, Yahoo’s directory was a good place to start. The company followed its nose and ended up with a big valuation in those early Internet years almost a quarter century ago. The write up points out:
[Yahoo] should have built strong engineering foundation instead focusing on sales and revenue.
My thought is that Yahoo, like many other outfits at that time was trying to figure out how to keep the site online, cope with bandwidth issues, and pay for stuff. Looking back, mom, it is easy to do the shoulda woulda coulda. Yahoo is amazing for surviving as long as it did. Money, mom, is important. May I have my allowance now?
The second point in the write up is tough for me to figure out: “Yahoo forgot what had taken them there.” I am not sure Yahoo knew where the company was at any one point in time. The growth, the engineering challenges, the successes and the failures were one crazy blur. Yahoo in its hay day was like Google now but without the online advertising revenue. Sure, Yahoo had GoTo.com, Overture.com, and its own systems, but lacked the ability to do what Google did. In case you forgot, mom, Google focused on using online advertising to generate revenue from search. That’s it. The rest of Google did not exist. Yahoo had the disadvantage of being in the midst of a cyclone of opportunities. Yahoo, even today, cannot contain the environmental effects of being blindsided by success in its formative years. Mom, I don’t know what happened after the punch I drank.
The third point seems to be that Yahoo killed its “golden goose.” For Yahoo, selling its share of Alibaba was a bad idea. I am not sure that Yahoo management at any point in time could identify a goose, let alone a golden one. Mom, I don’t know why I jumped naked into the Wilson’s swimming pool last night. Honest. Yahoo was and remains a consequence of its formative experiences. Companies have cultural momentum. Change is not particularly effective. Mom, yes, I will pick up my room.
The fourth point is that Yahoo hired professional managers to fix up the company. See point three. Change is hard. Mom, yes, I will take out the garbage as soon as I get home from Jim’s house.
The fifth point is sort of an MBA diagram. Like many great MBA diagrams, the arrows offer several subtle management insights. Here’s the diagram:
Yahoo did not see opportunities. Yahoo ran into icebergs just like the Titanic. Mom, I promise I will enjoy my time in juvie detention. It will be okay. I have learned my lesson.
What the write up says, in my opinion, is that an entrepreneur riding a hugely successful, little understood roller coaster should:
- Understand that luck is not intelligence or, even better, wisdom
- Nosce Te Ipsum. Figure out what made one successful: Luck, lots of cash, inept competitors, users who came from the woodwork, etc.
- Do not kill sources of money
- Do not hire MBAs
- Recognize the next big thing and make it a huge success.
Easy. Just like growing up. Mom, you really helped me after I was arrested. I promise I won’t get in trouble again. Parental inputs were, are, and will be the type of information that often makes zero sense. Entrepreneurs, listen to your mother.
Stephen E Arnold, August 18, 2016
August 16, 2016
I am not much of a worker. I am fat, lazy, indifferent, and a good citizen of Harrod’s Creek, my home in rural Kentucky. That’s why I don’t understand articles like “Yahoo CEO Marissa Mayer Explains How She Worked 130 Hours a Week and Why It Matters.”
I noted this point:
Mayer [top Yahooligan and Xoogler] added that hard work is what separates startups that succeed and fail, and that she’s able to tell which ones are more likely to succeed — without even knowing what they do — by simply looking at their work ethics.
I recall reading “Here’s What Happened To All 53 of Marissa Mayer’s Yahoo Acquisitions.” If the information is this write up is correct, the Xoogler asserted success with these acquisitions. I noted:
The reasons for Yahoo’s decline are complex. But what’s clear is that the MaVeNS and acquisitions rescue strategy hasn’t been able to save the company from itself, despite Mayer’s protestations that it was successful.
So what’s the disconnect? Talking and believing are easy, even when one works without sleep. Delivering is a different kettle of fish.
My slothful self thinks that there is a gap between hard work, recognizing winners from start up land, and creating a successful company. If Ms. Mayer’s Yahoo were a success, would not Yahoo be more than a unit of the old America Online, which is owned by a former Baby Bell?
I am too lazy to think about that. I need a nap.
Stephen E Arnold, August 16, 2016
August 12, 2016
I read “Google Isn’t Safe from Yahoo’s Fate.” The write up is a business school type analysis which reminded me of the inevitable decline of many businesses. Case studies pose MBAs to be to the thrills of success and the consequences of management missteps. I recall a book, published by a now lost and forgotten outfit, which talked about blind spots and management myopia. Humans have a tendency to make errors. That’s what makes life exciting. But I see a GooHoo trajectory.
I learned in this article:
Google is on the wrong side of major trends in the digital advertising industry: Google captures direct response dollars as digital ad spend shifts up the funnel, its focus is still on browsers and websites as engagement is moving into apps and feeds, Google is deeply dependent on search during a shift to serendipitous discovery and ads designed to interrupt the user’s attention are being replaced by advertising designed to engage them. Its competitor, Facebook, is on the right side of all these trends.
The Alphabet Google thing has not been able to hit home runs in social media in my opinion. The Google Facebook dust up exists, and it seems to me that Google is withdrawing from the field of social battle.
The write up informed me:
Google’s search advertising model is built on direct response in that it charges for search ads that people click on. In theory, this is an entirely transparent model: After all, advertisers only pay when the advertising works. What it conceals is that they are taking more credit (and charging more) for value that its ads didn’t deliver. By charging you for the click that follows a search, Google effectively takes credit for the entire funnel of purchase consideration that led you to type in the search and click on the link in the first place….But the ad itself didn’t create their purchase intent — it just takes credit for it. Google’s lower funnel ads are getting credit for upper-funnel effectiveness, in no small part because the latter is just too hard to measure.
August 1, 2016
I don’t have many thoughts about Verizon’s purchase of Yahoo. I am tired of the melting ice approach to Yahoo’s problems. I am bored with old-school online systems. I am disappointed that a Baby Bell is now a portal wanna be. Haven’t these folks heard of Snapchat and Pokémon Go?
I read “Verizon to Buy Yahoo’s Core Business for $4.8 Billion in Digital Ad Push.” The write up explains:
Verizon could combine data from AOL and Yahoo users in addition to its more than 100 million wireless customers to help advertisers target users based on online behavior and preferences.
Advertisers may want to have their products in Snapchat and Pokémon Go type environments.
As a former contractor to Bell Labs, I understand the problems of the “old” AT&T. But a Baby Bell doing the portal thing and aiming at Facebook and Google as digital ad competitors? Interesting.
Verizool. Catchy. Rhymes with drool.
Stephen E Arnold, August 1, 2016
July 30, 2016
Short honk: How does a former Baby Bell plan? The answer appears to be, “Not too much.” Navigate to “AOL’s Tim Armstrong Says ‘Scale Is Imperative’ in the Verizon-Yahoo Deal.”
Here’s the quote to note:
… Because this has been an auction process, he noted, rather than a direct sale, there has been no time to make specific integration plans between Verizon and Yahoo. In fact, according to many sources, Verizon has had little insight into a number of issues, including the terms of the contracts with key employees, that it will need to make plans for the future.
Is this an example of “Fire, ready, aim”? Will two Xooglers blend to create a viable competitor to Facebook and Google? What happens if 1 Xoogler + 1 Xoogler = 0?
Stephen E Arnold, July 30, 2016
July 7, 2016
I read “Information about DuckDuckGo’s Partnership with Yahoo.” Yahoo is into search DuckDuckGo style. According to the write up:
our latest partnership with Yahoo enables DuckDuckGo to get access to features you’ve been requesting for years:
Date filters let you filter results from the last day, week and month.
Site links help you quickly get to subsections of sites.
Farewell, Inktomi, AllTheWeb, Google, Microsoft. Yahoo, and home brew craziness. has a new findability future. Now about the size of the index? Will Yahoo’s new owner have a fresh idea? Worth watching.
Stephen E Arnold, July 7, 2016
July 6, 2016
I read “Marissa Mayer Says She’s ‘Heartened’ by Interest in Yahoo.” I noted a factoid I found interesting. Here’s the passage I highlighted:
Another question about Yahoo Mail revealed that about 1% of Yahoo Mail users actually pay for the service. But Yahoo Mail is much more important than that, Mayer said. “For every dollar that we make on Yahoo Mail on advertisements, we will make $3 elsewhere in our network on search or on some of our digital content,” she said. “So mail is incredibly important for us because of the frequency it drives and because of the strength it drives throughout the network.”
Email is a net revenue generator. Too bad some of that money is not invested in improving Yahoo email; for example, bulk deletes which are usable, a reasonable search system, and support for log ins from outside the US without wonky behavior. Heartened?
Stephen E Arnold, July 6, 2 016
June 22, 2016
The word “all” in “All the Startups Yahoo Bought in the Last Few Years, and What Happened to Them” turned me off. I persisted and worked my way through the shopping list of outfits purchased by Yahoo since the Xoogler seized the steering wheel. Like Hewlett Packard, Yahoo has found itself in the spotlight. HP may have the marvel of the Autonomy acquisition, subsequent write down, and legal dust up crown. But Yahoo has been more profligate on its multi year shopping spree.
The write up points me to this write up, “Here’s What Happened To All 53 of Marissa Mayer’s Yahoo Acquisitions.” Another “all.” Sigh. The upside of the Xoogler on the bridge was:
When she took over in mid-2012, employees were so enthusiastic about her arrival that one even photoshopped her face on Obama-style “hope” posters and hung them up around the company’s headquarters. Mayer did her best to live up to lofty expectations. She deployed quick fixes to solve Yahoo’s morale problems, including expanding parental leave and hiring high-profile celebrities to run the company’s media division.
The downside? I read:
But what’s clear is that the MaVeNS and acquisitions rescue strategy hasn’t been able to save the company from itself, despite Mayer’s protestations that it was successful. It’s worth looking, then, at exactly why these deals were made, and what has happened since.
Yep, PowerPoint fever, which is a variant of Excel spreadsheet fever. The problem is that the digital representations are not reality.
I learned that the Xoogler took these types of decisions:
- Shut down and “gutted” some of the acquisitions
- Rolled some companies into “existing divisions”
- A few companies are still “kicking”; for example, Tumblr.
I recommend that you work through the companies and the brief commentaries.
The way I read “Yahoo CEO Marissa Mayer Increased Spending after Secretly Agreeing with Investors to Cut Costs” undermines my confidence in the behavior of Xooglers. I thought ethical behavior was a core Google aptitude. Was I incorrect in this assumption?
What’s evident is that some Xooglers are outstanding PowerPoint types. The Excel expertise seems to be wanting. I assume the Board of Directors were convinced by the Xoogler’s digital confections. Savvy folks.
Stephen E Arnold, June 22, 2016