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Believe Yahoo’s tech makeover? Can I interest you in the Brooklyn Bridge?

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Max Levchin is a smart guy. He is joining the Yahoo (s yhoo) board. Marissa Mayer is a really smart person. And only thing surprising is that it took so long for her become CEO of an internet company. Together, they can be unbeatable, in say a game of chess or discussing artificial intelligence or Russian politics. They are both highly logical and can use logic to make any argument.

However, they are being illogical in believing that they can revive Yahoo and turn it back into a relevant Internet player.

had outlined my reasons for being a non-believer in a Yahoo turnaround in a post almost a year ago. Nothing really has changed in my mind — not even the new new CEO or the new board member. The only thing that would change my mind would be if the company talks specifics and share a timeline for the systematic changes that need to be implemented.

max-levchin-2Yahoo was a giant once — but now it is surrounded by competitors who are vying for the attention of consumers, who are attracted to new sources of entertainment and information, be it Pinterest or Facebook. It has been lagging on mobile and most importantly, it has systematically lost all its technical leadership.

Whenever, I talk to former Yahoo employees, other folks who still work at the company and other Silicon Valley insiders, they all come back with the same sentiment — the problem is foundational and the core of Yahoo is pretty hollow. Others have compared it to an industrial-era giant caught in a bureaucratic cobweb. Ask any 25-year-old young programmer who he or she wants to work for. Yahoo isn’t the name you hear.

An empty cupboard?

Yahoo’s paucity of technical capability was up for all to see this week, when Yahoo launched a mobile app, with filters and stuff. Folks loved it. Nick Bilton was ecstatic about it. Many said it was an end to the tyranny of low resolution, square shaped photos that was imposed by Instagram. Others waxed nostalgic and saw a Flickr Spring.

What I saw: Yahoo using a third party (Aviary in this case) to build the mobile app for Flickr, that one web service inside that still has loyal and passionate users among the snap-happy folks. [I will give them full marks for doing a good job on sprucing up Yahoo Mail, though they certainly took their time with it.]

It is a pretty damning testimonial of company’s technology capabilities that it can’t really build a product. How can anyone turn a company that is lacking in product capabilities and technology leadership into a player? I don’t quite understand.

Yes, Yahoo has made some sporadic buys. It is going to buy more of these small companies to bolster its bullpen, but you can’t buy your way into being innovative. It is a cultural and a structural issue and is a long process. I don’t think this honeymoon Yahoo is having with Wall Street is going to last for long.

But the Yahoo revival starts when the new technology talent makes it the first place to go work — ahead of Pinterest, AirBnB, Twitter, Facebook and even Google. Up until then, all board makeovers and new additions to the top layer of the company are nothing more than eye candy for the stock market.

12 Responses to “Believe Yahoo’s tech makeover? Can I interest you in the Brooklyn Bridge?”

  1. Brandon Carson

    I think you’re spot on with some of your comments, and off on a few too. I disagree that you can’t buy innovation. Yes, you can. In fact, it’s often easier to acquihire than build within (Oracle exists to do just that). Sometimes it’s just faster. As a former Yahoo (left in Jan), I saw so many cool, creative, innovative things going on — the problem was getting anything to market. The systemic construct made it really hard to be “nimble” — product managers were constantly frustrated with the “turf wars” going on. This happens in all tech companies, but it was hard to sit and see things that seem like game-changers languish cause of marketing strategies. You’re right about attracting talent. I worked in that space — and it was hard to get engineers to come on board. When we were trying to hire mobile engineers, we finally gave up and decided we had to “build that competency” from within. Some of the best engineers in the Valley were leaving in droves. Mayer can probably attract some new, good talent, but I’ll tell you — Yahoo has good salaries, so waving money at em won’t work. They’re gonna need to feel like they’re working on some real forward-thinking products that won’t just sit and simmer in politics. I think they need to be 100% mobile-focused and cut 1/2 the fat and 1/2 the properties. Slim down and get laser-focused on mobile entertainment. Otherwise, what are they? A junk email platform? Who uses them to search? When I was there, I tried to convince my 18-year old daughter to use their search, and she refused, saying, “Dad, no one uses Yahoo for search. I go to their news page when I want to see the sill stories that don’t matter…” Than comment resonated. If they can’t attract the younger ones… then what will they become?

  2. Thomas Hawk

    Om, I think you’re discounting the new Flickr iPhone app too much. It’s not just about filters. Filters are the least important thing about it actually. Who makes the filters, flickr vs. aviary, etc. isn’t very important.

    What the new app does do that is important.

    1. Let’s you easily fave things with the tap/tap fave gesture. This produces fave inflation. Instagram was super smart to introduce this gesture in the first place. It dramatically increases engagement on photos. People fundamentally post photos hoping for engagement. My Flickr views are up 40% since the app has been rolled out. That’s a big jump. People will feel like their photos are being viewed/faved more and will be more likely to use Flickr.

    2. Group threads. The most hardcore social on Flickr. Those that spend in some cases 20 hours a day on the site (I’m not kidding), LIVE inside of Flickr groups. This is a huge part of their life. By adding a group thread reader, this solidifies flickr’s relationship with this important super user and makes them even more active when they are not in front of a computer.

    3. As a way to browse photos of your contacts, Flickr’s new app is the most intuitive app on the market today. They’ve actually leapfrogged Instagram with this one here. It is easier to browse photos, fave photos, navigate easily back and forth between flickr streams of your contacts, etc.

    4. Along with the new app, Flickr also has been working on their relationship with Facebook which should help them. Two big moves. Flickr photos on Facebook are no longer postage stamped size, they are full sized, just like Facebook’s own photos — same goes for Twitter what Twitter/Instagram taketh away, Flickr giveth back with this new release. The other significant thing here is that you can now load up your Facebook/Twitter contacts and port them into Flickr. Who knows how long Facebook (who owns Instagram of course) let’s this functionality go on, but it works for now.

    Whether or not Yahoo can make a come back remains to be seen. Certainly the stock market would seem to think so based on the recent jump in the stock price. But the new Flickr app is far more than just about filters and there is some pretty powerful stuff that comes along with it as far as social lubrication goes.

    Flickr is hiring aggressively right now.

    I think Flickr still needs to better address personal relevancy with so many photos on the site and groups desperately need an overhaul (it may be too late for them now there with Google+ launching communities), but the app itself is pretty impressive, hopefully it comes to Android soon. ;)

  3. The only change I’ve seen is that they’re pages refresh much faster – no doubt to hype their numbers – log out of Mail and you get dumped to – page view! Yahoo doesn’t do any one thing well – trying to be all things to all people AND being very late to the mobile party – will quickly make you an also ran in tech. I see no miracle at the end of any rainbow.

  4. Max Levchin started Slide, an utter faillure that wasted hundreds of millions of dollars in VC and acquisition money. Why does that qualify him to join the board of a large tech company? I understand the ethos of value in failure. But surely such a debacle should have consequences.

  5. Overnight my Yahoo Mail became a different beast, only similar to what I had a couple of days ago. What happened?

    Mail that should be in my Inbox continually is put in the Trash, even with the sender’s address among my Contacts.

    Why are stories which have comments from readers so difficult to rate those comments or even to put in my own two cents.

    The Yahoo TV Schedule went away some months ago.

    Is anyone there, or is everyone asleep at the wheel? This is NO way to run Yahoo.

    • Guest2012

      yup yup. I was at Yahoo Tech Pulse, their engineering conference, last week and they introduced this. So I had some heads up. They are trying to come up with a new way to deal with mail, but they probably fell on their face introducing it properly to the users.

  6. netgarden

    I’d hearken back to a Tim Cook-ism. What’s Yahoo’s North Star, and what are the core metrics its success should be defined by? The audience for that isn’t folks like us, or short term investors, but rather, the rank-and-file within Yahoo, and the future recruits that can turn the tide.

  7. Thank you very much for pointing out what everybody else seems to be missing: Yahoo doesn’t have a technical head, a technical plan, nor the ability to hire a strong bench of the best technologists and engineers. You are so right that they can’t dig out of their hole until they invest technically. I shake my head at everything else they are doing because it is not believable without first solving this core problem.