The bells seem to be tolling for Yahoo.
Paul Graham wrote this piece – What happened to Yahoo – a few months back, declaring that, amongst other things, Yahoo’s definition of themselves as a “media company” and their lack of a “hacker culture” were reasons that predicted it’s doom. i.e. they’re a software company really, but they don’t want to act like one and therefore the incongruity is a core part of the problem.
More recently, this infographic – The Brutal Decline of Yahoo – became quite popular by describing Yahoo’s lack of fortune. How did Mark Cuban become a billionaire? Through a crazy purchase price ($5.7 Billion!) for his company Broadcast.com by Yahoo in 1999!
Back in May,when asked “What is Yahoo?”, Yahoo CEO Carol Bartz had trouble clearly and simply describing what Yahoo was. Not a good sign. Since then, she’s gotten a bit better at answering the question. And prior to her, Yahoo cofounder Jerry Yang (then CEO of Yahoo) had a similar problem.
But not everyone agrees. John Battelle wrote this piece – Is Yahoo Dead? I Don’t Think So… – back in July arguing that Yahoo has a clear future as a truly neutral player on the Web.
Clearly there are many sides to the Yahoo story. Yahoo is definitely a global Internet brand. It’s a multi-billion dollar company and is one of the top 5 (currently) destinations on the Web. It is a diversified company comprised of many smaller businesses around the word.
The Problems
But, Yahoo has a lot of problems.
1. Yahoo’s revenue is flat.
Granted, we’ve had a tough economy lately, but Google and Ebay as two examples have grown significantly over the last 2-3 years. Why is Yahoo’s revenue not growing?
2. When you think about Yahoo, ask yourself, how much if any, innovation has Yahoo produced in the last few years?
Can you quickly name 1 or 2 things that came out of Yahoo that could be called new or innovative? I can’t. And while there may be some great innovations from Yahoo, if we don’t know about them, what does that say about Yahoo’s ability to create and deploy them?
3. Some of Yahoo’s core services are breaking at the seams.
I have been using Yahoo Mail for over 10 years.
While not amazing or shiny, Mail has worked well enough over all those years that I’ve resisted migrating to the newer and shinier mail services. But as of late, Mail doesn’t seem to even work. The mail search feature gives errant results, I get the “An unexpected error has occurred…” message almost every day when sending messages, and that makes me wonder if my mail is actually being sent, even when I don’t get that error.
BTW, that “unexpected error” message is completely hilarious. It’s such a meaningless and useless message. Is there such a thing as an “expected error” in this context?
Aside from Mail, the only other Yahoo service that I use regularly is their financial site. And it too has problems. Even as I write this blog post, I am having trouble looking up actual stock prices on their site. I’m consistently getting the message “internal error – server connection terminated”. BTW, that’s another great error message, is it not?
Now, I’m no Yahoo hater, but I can spot a dead fish when I see it. If long time core services like Mail and Finance aren’t working properly, it’s clear that Yahoo isn’t paying much attention to their core users. And they’re not innovating. And their revenue is flat. And their CEO can’t even explain what they do in any clear fashion.
An analysis from 2006
And Yahoo’s problems go many years back. The best articulation of those problems came from a former SVP at Yahoo – Brad Glaringhouse – in the now famous Peanut Butter Manifesto. In short, Brad identified 3 major problems:
- Lack of a cohesive, focused vision for the company
- Lack of accountability and ownership
- Lack of decisiveness
Looking back, Brad was dead on, and as an outsider looking in, those are still true today.
As a Product Manager, those 3 things, Vision, Accountability and Decisiveness are critical to success. Not coincidentally, they are all critical for business success as well.
I honestly wonder what the Product Managers at Yahoo think about their company? Is it a great company to work for as a PM? If the company lacks those traits, are the PMs empowered with them for their products? What is Product Management actually working on at Yahoo, if core services are failing, there is little innovation and business is flat?
Some advice for Yahoo
I think it’s time for a radical shift for Yahoo if it wants to remain a top destination on the Web.
1. Yahoo has to get core services rock solid and stable. Getting errors when sending messages is completely unacceptable. Not being able to show a stock quote when requested is ridiculous at best.
2. Yahoo has to shed a lot of crap that has built up over the years and find focus instead of trying to be all things to all people. I’ve heard good things about Yahoo’s Fantasy Sports leagues. Not my cup of tea but if you’re the best at something, that’s a lot better than being average (or crappy) at most things.
3. Yahoo has to start innovating, and deliver new, unique and compelling experiences for people. Stop trying to copy Facebook or Twitter or FourSquare or whatever else seems au courant. Get in touch with your users and innovate. The Web is a wide open space.
If you can’t do these things, then you might as well admit it, and become the Computer Associates of the Web world. i.e. a company that rarely if ever innovates, and is known in the industry as a place where products long in the tooth live their last days as a maintenance stream.
What are your thoughts? Does Yahoo need to change? If so, what advice would you give them?
Saeed