9 Comments

Summary:

Some see Yahoo as a slow-motion train wreck, heading inevitably for disaster. But the company is arguably doing exactly what it has to: triage to stanch the bleeding, shutting down or selling off assets, and so on. It may not be pretty, but it is necessary.

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In the wake of recent layoffs , and the rumored “sunsetting” of a number of services such as AltaVista, Yahoo Buzz and Delicious (see our updated post on the latter news here), it’s tempting to see Yahoo as a slow-motion train wreck, shedding assets in a haphazard way as it trundles inevitably towards disaster. Mike Arrington, for example, argues the company is “in complete disarray” as it tries to figure out what its future is, and other observers appear to have the knives out for CEO Carol Bartz. But a case could be made that the company and Bartz are doing exactly what they need to do: triage to stanch the bleeding, shutting down or selling off assets, and so on. It may not be pretty, but it is arguably necessary.

There’s no question that the way the company handled the Delicious news — at first releasing a vague statement about some of the assets on the “sunset” slide, without mentioning the social-bookmarking tool at all, only to have the service post a statement Friday complaining about all the inaccurate reporting about its demise — isn’t likely to fill anyone with confidence about the company’s grasp of the real-time nature of public relations and communications. But plenty of other companies are guilty of the same lack of awareness, so we can’t really pin that one on Yahoo alone.

When it comes right down to it, shutting down or selling off assets such as AltaVista, Yahoo Buzz, MyBlogLog and Delicious (which the company hinted it’s looking to sell or hand off to someone else) makes eminent sense for the web company. Former Yahoo executive Brad Garlinghouse — now at AOL — accused his employer of being like peanut butter spread too thin in a famous internal memo in 2006, and that has arguably been the case ever since. At least Bartz and her team are taking some steps to get rid of things they don’t need and cut back on the drain they are putting on resources.

Don’t get me wrong: Yahoo is still in bad shape in a lot of ways. Among its only valuable assets are its stake in Yahoo Japan, and the future of that is uncertain at best. The company’s content strategy, which has seen it buy “crowdsourced” content farm Associated Content and hire a number of bloggers for its political and other news operations, remains largely unproven — and is so similar to the restructuring that AOL has been doing that there have been reports about a merger between the two (which would likely help neither). But for the moment at least, cutting back on the number of pies the company has its fingers in seems like a pretty wise approach for Yahoo to take.

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Post and thumbnail photo courtesy of Flickr user Jay Tong

  1. yahoo is dead … they dropped the ball on search … they dropped the ball on social networking …

    who uses yahoo anymore?

    not me

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  2. To focus is divine. But knowing what to focus on makes all the difference. Focus alone will not save them. Being unable to devise a coherent strategy to focus on will kill them.

    Their actions surrounding these properties, as well as other decisions over the last couple of years leave one with no sense they have a coherent strategy.

    So whether they do indeed need to focus or not, focus on the wrong thing is just as bad as no focus at all. Add to that an inability to execute on even the most basic PR strategy around these decisions and you get Arrington’s train wreck.

    Sincerely,

    BW

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  3. Yahoo is unable to meet user expectations. Majority is using only its mailing service that is also because people can not migrate same email address to other service providers like gmail.

    I wander, just big giants can not sense what a user wants…so they implement new strategies accordingly. My experience sasy..once one company starts catching-up other by giving same features…that is the last day of growth for such company. Yahoo is simply trying to catch-up since long…and day by day going down.

    Feels sad…but world is like this. Who is not able to adopt change in time, he is out of business. :)

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  4. Yahoo is dead, apologists like yourself notwithstanding.

    Here’s a thought: Delicious is one of the best organized, best curated, best tagged collection of links on the entire internet. It would be a fantastic strategic fit for a company interested in say, searching the internet.

    That Yahoo doesn’t get that it’s core to the only business that they have is a sure sign its dead. I give Flickr 18 months, Yahoo about 36 months.

    It’s over, Jim, Icahn gutted the firm.

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    1. Really?…

      Yahoo is only the 4th largest site in the world, reaches over 600 million users a month, over 6bil in revenue, over hundreds of million in profit, #1 in Sports, News, Finance, Celebrity Gossip, Instant Messaging, Email… not to mention top 3 in over 24 other categories like Movies, Music, Games, Auto, Real Estate. Doesn’t look like a dead company to me. If Yahoo was private, they’d be a crown jewel.

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  5. As a user of Yahoo (mainly email), the more I use it, the more I hate it. It’s crazy how much they are lagging behind even in basics… it is almost like done on purpose. For example, it is not acceptable that Yahoo paid email users cannot have IMAP access.

    Like many of the comments here, I believe that Yahoo needs to focus on finding an innovative ground on where to focus and win, but also need to care about their existing business and do some basic leveling and customer experience enhancement on this one. They still have a huge user base, and you don’t want those users to hate the brand… that will destroy the future.

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  6. RIP Yahoo. I’ve been using its email since the beginning of the internet and I still depend on Yahoo Messenger.

    Hope they sell Flickr to a good company. Could Twitter prove a good match?

    (Visit my site on http://whisperwalk.multiply.com)

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  7. [...] Painful or Not, Yahoo is Doing What It Needs To (gigaom.com) [...]

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  8. [...] Mathew Ingram argues that the moves makes sense from a business perspective. Maybe. But the key ingredient of Yahoo’s business is people using their services. If they’ve showing that they can just kill off such a big one on a whim, I’m just not sure how they can convince us that all of them aren’t at risk. [...]

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