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Yahoo and Its Five Mistakes Mom Insists You Must Not Make

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:

image

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:

  1. Understand that luck is not intelligence or, even better, wisdom
  2. Nosce Te Ipsum. Figure out what made one successful: Luck, lots of cash, inept competitors, users who came from the woodwork, etc.
  3. Do not kill sources of money
  4. Do not hire MBAs
  5. 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

Quote to Note: Hard Work Equals Winning Maybe Sometimes or Not

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

The Yahooing of Alphabet Google

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.

Goohoo

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.

Read more

Verizon: From Baby Bell to Online Gong

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

Verizon and Yahoo Integration

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

DuckDuckGo Yodels Yahooooo!

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

Yahoo Factoid: Email

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

Yahoo Acquisitions: The Marissa Mayer Drama

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

The Scottish Philosopher in Silicon Valley

June 6, 2016

When Alistair Duff, professor of information society and policy at Scotland’s Edinburgh Napier University, checked out Silicon Valley, he identified several disturbing aspects of the prevailing tech scene. The Atlantic’s Kevah Waddell interviews the professor in, “The Information Revolution’s Dark Turn.”

The article reminds us that, just after World War II, the idealistic “information revolution” produced many valuable tools and improved much about our lives. Now, however, the Silicon-Valley-centered tech scene has turned corporate, data-hungry, and self-serving. Or, as Duff puts it, we are now seeing “the domination of information technology over human beings, and the subordination of people to a technological imperative.”

Waddell and Duff discuss the professor’s Normative Theory of the Information Society; the potential for information technology to improve society; privacy tradeoffs; treatment of workers; workplace diversity; and his preference that tech companies (like Apple) more readily defer to government agencies (like the FBI). Regarding that last point, it is worth noting Duff’s stance against the “anti-statism” he believes permeates Silicon Valley, and his estimation that “justice” outranks “freedom” as a social consideration.

Waddell asks Duff what a tech hub should look like, if Silicon Valley is such a poor example. The professor responds:

“It would look more like Scandinavia than Silicon Valley. I’m not saying that we shouldn’t develop the tech industry—we can learn a massive amount from Silicon Valley….

“But what we shouldn’t do is incorporate the abuse of the boundary between work and home, we should treat people with respect, we should have integrated workforces. A study came out that only 2 percent of Google’s, Yahoo’s, and a couple of other top companies’ workforces were black. Twelve percent of the U.S. population is black, so that is not good, is it? I’m not saying they discriminate overtly against black people—I very much doubt that—but they’re not doing enough to change things.

“We need the best of Silicon Valley and the best of European social democracy, combined into a new type of tech cluster.

“There’s a book by Manuel Castells and Pekka Himanen called The Information Society and the Welfare State: The Finnish Model, which argues that you can have a different type of information society from the libertarian, winner-takes-all model pioneered in Silicon Valley. You can have a more human, a more proportioned, a tamer information society like we’ve seen in Finland.”

Duff goes on to say that the state should absolutely be involved in building the information society, a concept that goes over much better in Europe than in the U.S. He points to Japan as a country which has built a successful information society with guidance from the state. See the interview for more of Professor Duff’s observations.

 

Cynthia Murrell, June 6, 2016

Sponsored by ArnoldIT.com, publisher of the CyberOSINT monograph

The Kardashians Rank Higher Than Yahoo

May 20, 2016

I avoid the Kardashians and other fame chasers, because I have better things to do with my time.  I never figured that I would actually write about the Kardashians, but the phrase “never say never” comes into play.  As I read Vanity Fair’s “Marissa Mayer Vs. ‘Kim Kardashian’s Ass” : What Sunk Yahoo’s Media Ambitions?” tells a bleak story about the current happenings at Yahoo.

Yahoo has ended many of its services, let go fifteen percent of staff, and there are very few journalists left on the team.  The remaining journalists are not worried about producing golden content, they have to compete with a lot already on the Web, especially “Kim Kardashian’s ass” as they say.

When Marissa Mayer took over Yahoo as the CEO in 2012, she was determined to carve out Yahoo’s identity as a tech company.  Mayer, however, wanted Yahoo to be media powerhouse, so she hired many well-known journalists to run specific niche projects in popular areas from finance to beauty to politics.  It was not a successful move and now Yahoo is tightening its belt one more time.  The Yahoo news algorithm did not mesh with the big name journalists, the hope was that their names would soar above popular content such as Kim Kardashian’s ass.  They did not.

Much of Yahoo’s current work comes from the Alibaba market.  The result is:

“But the irony is that Mayer, a self-professed geek from Silicon Valley, threw so much of her reputation behind high-profile media figures and went with her gut, just like a 1980s magazine editor—when even magazine editors, including those who don’t profess to “get” technology, have long abandoned that practice themselves, in favor of what the geeks in Silicon Valley are doing.”

Mayer was trying to create a premiere media company, but lower quality content is more popular than top of the line journalists.  The masses prefer junk food in their news.

 

Whitney Grace, May 20, 2016
Sponsored by ArnoldIT.com, publisher of the CyberOSINT monograph

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