Yahoo CEO Marissa Mayer Faces Morale Challenge
wsj.com
wsj.com
So they need to build a new business from the dying ashes of the current revenue. At the moment it does not look like the CEO has any good ideas on how to do that.
Currently, even at its 'dying' state, Yahoo has huge traffic from extremely loyal users who are mostly in the higher income (30+) age range. To dump that out the window would be an incredibly irresponsible business move. It's easy for a small, young company to pivot, but an old giant like Yahoo has to move slowly.
That being said, I think it would be a great move to really accept the growing age and therefore unique needs of this internet company rather than trying to follow new trends. That's truly their strongest leverage material at this point. Can they reinvent how the Internet is used by people over 40?
Is that statement a fact? If so, care to substantiate it.
I work for one of the largest companies in the world and we no longer use Yahoo; we use too. Every year in the US, the Superbowl pulls in HUGE dollars in advertisements. I have to plan for this every year and have been doing this for the past 10 years.
Around Superbowl time, we increase our public facing web server presence due to the increase load. It use to be that Yahoo represented more than 50% of the clicks but that is less than 10% as of last year.
I work for a fortune-5 company. We use Akami to help distribute the load. I wish I could publish more info like the data and the company but unfortunately I'm not legally permitted.
I will say this: I doubt Yahoo Ad revenue will return at least from my perspective and what I've seen over the past 7-10 years. More and more of our Ad refs come from youtube.
"I run an entire data center of Slackware Linux on Dell servers."
so, definitely not apple. which leads me to think all that is BS and they just have too much time on their hands.
One of my customers is a fortune-5. I am contracted and I have a small team that I manage within.
If I must explain, I'm a serial entrepreneur. I've owned 3-4 companies in my past including a cable TV company too. It would be more accurate to say I have my hands in many things with not much time on my hands.
THe fortune-5 company is an automotive company genius.
This is from last year. A market that is mostly 35+ and women of higher income (aka the spending decision makers)? It's not something that should be dismissed.
Having tried to use 500px for a few months, they cannot even manage to do album privacy correctly.
On the other hand, Flickr's admin UI starting to fill up with crap I don't about, like creating mugs and books and shit. Fair enough, they're trying to make money, but that stuff has no place on the main interface.
It's still the easiest place for me to store and share photos, however.
Previously their paid product was called Mail Plus, and that was the only way you could get mail out in bulk. But a while ago they made a change. From an article I just found:
What Yahoo does not mention is that Pop3 access
is now available as well. While I cannot say if
it was enabled previously for free users, I know
for a fact that it was limited in the past to
paying Yahoo Mail users.
http://www.ghacks.net/2013/10/08/yahoo-mail-plus-turns-yahoo...
Should I guess that you were not adult yet when Yahoo! started?
When Yahoo! was founded, there was a need for WWW site directory, and Yahoo! filled that vacuum. It was the go to place for finding the sites in your area of interest.
Some of the sections of Yahoo! for example: Finance and Sports are still go to places for me and I am sure countless others. I haven't come across any other sites that even come close to those two sections on Yahoo!. Even today, there is no single directory site with curated list of relevant sites, news and information from such sites. So, I will say there is still a need for a Yahoo! like portal with curated information. What Google spits out in search and associated sites is SEO crap. Google has inability to differentiate among 14,777 news articles on a topic and which one is the most relevant and comprehensive.
IMO, Yahoo! need to go back to their roots which was portal of curated information. If they wait too long and the direction FB is heading, they will fill the void left by Yahoo!.
You haven't been able to find any other sites focusing on finance or sports on the internet? To be clear, yahoo does a decent job curating finance and sports sections, but it is extremely trivial to find sites similar to Yahoo. Here are a few, I found:
Finance:
========
Marketwatch[0], is very similar to yahoo finance. Owned by WSJ and Dow Jones.
Google Finance[1] is like Yahoo! finance, only done by google.
MSN Money[2] almost the exact same thing as Yahoo.
Then you have your more niche honorable mentions like motley fool, seekingalpha, zerohedge, etc.
SPORTS:
=======
Without repeating Google and Microsoft offerings, there is of course:
ESPN which is the second largest sports news provider, also they have a tv network about sports. They sports fairly hard.[3]
Bleecher Report is not to be out sportsed, sort of a hipster pitchfork media type sports player.[4]
CBS Sports[5]
NBC SPorts[6] This, and the preceding offering are large entrenched media rent collectors, which is similar to yahoo, except that they are profitable.
So, in finality, I find that statement absurd, but I am glad you enjoy yahoo. I am rooting for it as it is an under dog for sure.
[1]http://www.google.com/finance
[2]http://www.msn.com/en-us/money
[4]BleacherReport.com
[5]CBSSports.com
Here are a few data points:
Interface - YF has all the three indices information (S&P, Dow and Nasdaq) right in front of you. MW has this in a small box on the right. While this may seem trivial, over a period of time - YF sticks but MW doesn't.
Content - All the content above the fold on YF is related to the markets. If you look at MW , for instance there is an article filling up which airline features you should pay for - totally unrelated to markets and in the main view of the fold. This is not a one time phenomenon, but happens all the time. One of the reasons I stopped using MW.
Quote lookup - The quotes are all on the left and the lookup bar is right below the quotes. Also if you look up a stock and revisit the home page, that information is stored - without requiring you to sign up. SO you can just build a portfolio of stocks without even signing up. (Of course, if you clear your cookies this will be lost). Try doing this on MW - The quote look up bar isn't even obvious ( you have to hit on the search button to make it visible).
I can go on and on about feature comparison but what I'm trying to get at is - Yahoo Finance is one of the most usable sites when it comes to market information for a vast majority of users interested in the markets. They have carried over the same interface to other geographies as well. For example yahoo finance India isn't drastically different from Yahoo Finance US. So it wouldn't be really wise for a company to just abandon that user base.
Each mentioned site is missing something that is available on Yahoo! Either you browse through all the articles on Bleacher Report or you can see the most relevant ones on Yahoo! That is the difference.
Remember the keywords Portal, curated information, relevant information, comprehensive. None of the sites you mentioned are at a level of Yahoo!
What? No. He/she meant that any of those sites can replace Yahoo by themselves, not that all of them are required.
As for sports, if you want the same information but the caveat you seem hung up on is that it must come from different domains, just go to a reddit like aggregator. I get it, you like yahoo. Yahoo does a good job, and I also like yahoo. My point is it is patently rediculous to claim there is no other space on the internet that is close enough to Yahoo sports or finance.
Companies don't survive being ~10% better than the competition, and the stuff you are talking about sounds like it is moire about habit than anything tangible.
I completely disagree with that. I tried for over a year to switch from Yahoo to Google for finance and found it completely lacking, despite the nicer UI. The only site that can match Yahoo finance in my opinion is the Motley Fool. I still use both.
Within sports, Grantland tried producing content that was different, and died. GigaOM tried focusing on enterprise tech, and died. FiveThirtyEight served policy wonks, and is struggling to attract a meaningful audience. The verdict is out on Vox, but they also may go within 18 months.
Yahoo has tried to solve this problem by hiring 'star names' but it doesn't seem to have moved the needle. People are happy to take the commodity churn article from Bleacher Report.
Oh, and to top all that off, it's unclear that there's really any serious money to be made from online content / eyeballs anyway.
Which is to say that even if they could execute on the 'trusted source of content' business model, it may not be enough to save them anyway.
Why would anyone rely on a single "portal" for content? A "portal" like Yahoo(!) was relevant when connections were slow and the potential of the internet was still nascent. That was 20 years ago.
These days, just open a new tab with a new site. Open 10 new tabs with 10 different sites. It's not that complicated.
Yahoo's Directory was shut down December 27, 2014.
What's left of Yahoo does some photo storage, some email, some video streaming, some finance and sports reporting, and some ad serving. They also resell Bing search. All those things are done better by others.
It's highly debatable whether anyone does flickr "better". 500px, for example, have descended to suddenly announcing that they'll give away licenses for the photos you pay them to host and reward you with "exposure".
There is an opt-out box buried away in your preferences, but (in a shitty move) you also have to opt out of selling your images through partners at the same time - you can't disable only uncompensated use.
Many forms of it now but I still think Directory could be revived. Maybe exceed the old one with curators for high profile topics plus crowd input. Some hybrid model.
They are already bringing in outside consultants from McKinsey, but in this day and age, how about turning to the crowd for help? If they posted significant cash prices (say $1m total) and let their users vote on the best ideas, I bet they could find some fresh directions.
Also bet it would cost a fraction of what they pay McKinsey.
Edit: In fact, why stop there. How about making it a quarterly challenge. With follow-ups on what ideas they decided to work on and progress reports. Make Yahoo the People's company. Just my 2 cents.
Everyone who is there now and especially rose through the ranks at some point stood behind and toed the line that brought them to that point ("Cheered for more desktop ads, agreed and liked the 'Mavens' metric"). Now they'd face a significant cognitive dissonance if they did an about face and said "Yap that was stupid, what were we thinking!?". It just doesn't happen.
It can only happen with new people, so a lot of existing ones have to be pushed out of the door. But new ones take a while to on-board, they are outsiders and so on, they'll face internal resistance in the changes they propose.
It's the downward spiral of doom. They'll start laying off people to save money. The more people they lay off, the less likely good people would want to go work there. The less progress they'll make, so they'll have to lay off more people etc.
McKinsey isn't going to get them there. That's a move of a dying company. Marissa Mayer needs to do this herself. If she doesn't know who the right people are to keep versus release, that's a bad sign.
It would be fun to watch, but the markets would rightly interpret it as "we have no idea what we're doing".
Seriously though, if you use enough buzz-words, like crowd-sourced virtual incubator, or Kickstarter for Innovation, or whatever, I'm sure you could sell the idea to all the stakeholders somehow.
To completely abandon that skillset in order to form fit the company to the most popular idea from the crowd could possibly be disastrous. Perhaps it would work if they made a conscious effort to ensure the idea the crowd proposed aligned well with the skillset / experience the employees already have.
This usually means a the execs need to take a political difficult action (layoffs, etc.) and need the "cover" of a highly paid firm to look like "experts" suggested it to redirect blame away from the execs.
>They are already bringing in outside consultants from McKinsey
i think these 2 things are incompatible to say the least. McKinsey indicate completely different stage in a company lifecycle.
http://www.scmp.com/article/1007460/yahoo-still-hks-top-sear...
Doesn't the talk about "when you are not the consumer yada yada" does not apply for the convenience of your argument?
IMHO it looks like the likely end game for Yahoo is:
- taken private by a Private Equity firm
- divest Yahoo Japan and Alibaba
- any divisions that aren't making an actual profit, (tumblr, flickr, fantasy sports, etc, will be shopped around and sold if possible, or shuttered if not possible.
- search, email and the yahoo front page will be sold to Microsoft
Yahoo has done everything by the MBA book to turn around the company, they are at the step of brining in Mckinsley consultants, never a terribly good sign.
Sometimes, time just passes a company by and you can't do much to turn it around, its not the leadership's fault or the engineers fault. The market just says the company is no longer needed.
This doesn't mean the company is un profitable. Corel was a company in the early 2000's that went this route. A company can circle the drain, making slightly less and less profit each year, slowly laying off people which causes them to miss their next quarter, which necessitates more layoffs and the circle continues until someone buys them out.
I think this is the likely fate of Yahoo.
The next step is to engage an investment bank to find them a takeover partner if Silver Lake doesn't want to be the one to take them private.
What other possible route is there?
They've brought in 4-5 CEO's each with their own vision of what yahoo should be and all of them has failed to turn the company around.
What is Yahoo's area of expertise that they make money at and can do better that Google, Microsoft, Facebook or Amazon?
I admittedly haven't had the experience of working with any consultants, so I'm curious for opinions from those who have what happens when they come in during a "typical" engagement of this nature.
The rewards for the consultant are high fees and living a luxe lifestyle of staying at high end hotels, traveling first class, and dining at michelin starred restaurants (all of course on the client's dime). Plus of course guaranteed future work. Even if the project tanks and the executive is fired, they'll be sure to hire McK again at their next gig.
What most people don't realize is that consulting engagements are a careful collaboration between consultant and client. The findings are almost always driven by an iterative process where you go through review cycles with the buyer until you reach your "objective" conclusions, which by the very nature of how the work is performed, is totally subjective and biased. Doubly so for turnaround projects like this one. (not to mention that consultants are constantly trying to recycle previously performed analysis, regardless if it at all fits or applies in the target project).
Management consultant is the biggest circlejerk profession. Even moreso IMO than ibanking. Classic self-serving MBA type job. Management consultants are to entrepreneurs what food critics are to chefs.
>Management consultants are to entrepreneurs what food critics are to chefs.
Eh. Good food critics cut through a lot of trendiness. Of course, a lot of food critics aren't good.
Consultants would draw and describe what they wanted, goto bed, and awake to slides, charts in their inbox.
Same thing with models. Most firms have "rockstar excel jockeys" (usually analysts/associates/etc.) that are pimped out to project teams to serve this singular role (making models, building business cases, etc.).
Management consulting, such a surreal profession...
What is the difference between McK and Deloitte? One has Harvard grads the other has Cornell grads. The analysis is the same, but one is just wrapped up in a prettier package and more prestige.
Consultants:entrepreneurs = husbands:Kardashian sisters.
I don't believe that if you just throw enough smart managers at the top of a hierarchy, then eventually it will spit out gold. If anything, that can be problematic.
Yahoo, in its current large size, simply may not have the latitude to pivot to the degree required as a publicly traded company, since anything any CEO attempts will draw the ire of activist shareholders. Any major change becomes a large political endeavor.
Assuming either of them was actually given the mandate to do so by the board of directors, etc, I imagine they'd fire like 50-80% of the staff, get rid of anything that's not profitable, and produce one highly refined product at a time, something that hasn't been done well before.
Source: Am both a Jobs and Musk fanboy and have done an unhealthy amount of reading about their histories and decision-making. I particular like this video of Jobs at NeXT: https://www.youtube.com/watch?v=HNfRgSlhIW0
"...it seems to me that, in general terms for Steve, he was so passionate about the goal and trying to invent something impossible that everyone had to be on this mission to Mars, and if you weren’t on the mission you didn’t need to be here. It was really a focused approach, so it wasn’t about me or you or hard feelings or anyone. It was about the thing and making the thing better."
Read more at: http://nextshark.com/doug-menuez-who-spent-3-years-with-stev...
Did NEXT manage to execute the plan and sell 50k workstations in 1991?
So I'm guessing more like 20k.
I really doubt either Steve Jobs or Elon Musk could turn Yahoo around. With Jobs's Apple turnaround, he had the advantage of sharing (creating, really) Apple's cultural DNA; he didn't need to "turn around" a company, he needed to cut the fat and refocus it so it could do what it was doing a lot better. Elon Musk has never run a turnaround; his companies have certainly encountered difficulties, but it's easier to take a new organization with a strong mission and make it work than to take an old, sclerotic organization in a market that doesn't exist anymore and somehow make it relevant again.
Fantasy sports.
In much the same way Sega pivoted, Yahoo could.
Edit: is there a story I don't know about? I know a reasonable amount about gaming but I guess I'm drawing a blank on a successful Sega pivot. I remember some cool ads when I was a kid, I suppose.
So Mckinsley consultants are the nursing home cats of the corporate world?
http://nypost.com/2010/01/31/nursing-home-cat-can-predict-im...
Sounds like she's in a tough spot. You're pretty much forced into a situation of focusing on the good numbers when you're a public company or you'll get beaten up by the shareholders and shorts. So it's difficult to shine sunlight on the bad stuff to disinfect because that's not what public investors want to hear.
Going into search? That's just crazy talk. Google has the space completely wrapped up.
I think Yahoo has some excellent properties like finance.yahoo.com which is amazing and could unlock a deluge of cash with the right biz model. Retail investors visit the site in droves daily. Right now it's an advertising disaster. Prime space taken up by spammy link-baity ads injected into the main center content: "10 most popular fitness models on the planet". And prime spaces on the right taken up by amazon ads. The most targeted ads by etrade, scottrade and ameritrade are the smallest ads on the page with tiny icons on the left. They relaunched yahoo finance in September and sounds like their users hate the new site: https://yahoo.uservoice.com/forums/315477-finance-dd-3
The WSJ article isn't going to make life at Yahoo any easier unfortunately.
The space is ripe for upheaval.
There's a field where Google has been doing slightly worse as time goes by: questionable search. It's a running joke by now that Bing's video search is much better for searching porn that Youtube. Similarly, searching for "<band> full album mp3 download" on Google is bound to return useless websites. Sometimes the actual results are to be found inside the text of a DMCA takedown notice, meaning that Google has the result, but refuses to show it to you.
And speaking of bad results, some specific terms (such as moving companies) are so full of SEO garbage that there's no way to get a reliable result.
There's definitely room for competition - otherwise, DuckDuckGo would have been out of business by now.
We're not talking about handset A vs. B. The technical and talent lead is much deeper wrt. Google and Machine Learning.
If you haven't yet, check out the bottom of the page, in particular "Guidelines", "FAQ" and the search bar. Also, helpful formatting tips:
https://news.ycombinator.com/formatdoc
> bad manners will be corrected. I guarantee that.
We'll hold you to your words. Do so, or the downvotes will follow. ;).
Wha?? I use it daily for the last 10+ years - I despise it, but for some reason there's nothing better afaik. And it would be so easy to make it so much better, no surprise the company is failing.
I do enjoy the drama of the Mayer Saga, but it doesn't seem like any of Yahoo's attempts at innovation are working. They shouldn't be competing with Google in search. They should be redefining search. Some times the best way to change the game is to go back to basics. Of course if I knew exactly what that looked like, I would be too busy walking the path to wealth to write hn comments. But it does seem like Yahoo isn't doing anything innovative right now. Their most valuable properties, mail and the yahoo home page, are simply good enough versions of products that have become commodities. They began by offering a service that no one else was providing, and have ended up being relegated to being the internet's generic alternative to everything.
It's Hail Mary time. If I were in Mayer's position, I would find a way to burn a few hundred million dollars of the alibaba money on a moon shot before the board had time to vote me out. The odds against may be overwhelming, but it's better than slightly slowing the angular velocity of their circle around the drain. With the recent tone of press articles about her tenure and what that does to an executive's reputation, I don't see what she has to lose.
Yahoo is hardly trying to compete with Google in search; they have literally been outsourcing search to Bing for several years now.
The problem is that they're trying to figure out what they should be doing instead, and struggling.
Aren't they starting to stream nfl games for free? The first one they did was from what I heard handled very well. I thought there was talks about more.
It isnt hip enough to be cool, it's not big enough to be Facebook or google, it's a $30billion company that some how has the branding of the internets AOL. If yahoo "innovates" it will immediately be uncool.
Morale issues definitely can make things more difficult but are things really that dire there? Best thing I can see they've got going for them is the analysts are still foolish enough to rate Amazon as a tech company and not as a Walmart competitor that does some tech; they don't have great ways to classify these companies. It doesnt seem like yahoo is doing foolish things, it might be more of a bellwether for the free everything and monetize the traffic industry.
Is such an agreement enforceable? Or is this some meaningless pledge?
If you want people to stay, give them a decent financial incentive.
Nah. That doesn't work (assuming you're already paying well). Best people will consider this a sign of desperation and leave, and bottom of the barrel will stick around for stuff to vest. Fail/fail.
If you want people to stay, give them a decent financial incentive.
I keep seeing this sentiment, but I think it's important to distinguish between "don't give your people worthless equity instead of a good salary" and "I'm just here for the money." Starting to see a lot of the latter around here and it's disheartening. Sure, broken dreams and failed visions and all of that happens, but it's part of the process when you try to do "big" things. Widespread cynicism will kill high-tech.
I however am restricting my evaluation to the domain [high-tech] : [startup], which after all is the core demographic for HN and YC more broadly.
In that context I don't think it's an optimal outlook - and in fact I think it is detrimental to the zeitgeist and pushes further away from the PARC roots of paradigm setting technology development.
I grant that in the current environment it's "idealistic" but I think at the core, the real innovators still have the vision of changing the future through technology - at least I do, and I know I'm not alone in that.
Yaa, how awful...because my landlord accepts a share of my company CEO's "vision", as does my grocer
> Widespread cynicism will kill high-tech
What a laugh that the heirs, the LP's, the VC's and seeds and angels aren't the cynics, your unhappiness is the twenty-something wage slaves slaving away at all hours building products are now disheartening, because they're buying the BS less and want to keep more of the wealth they're creating.
The heirs and LP's are not "here" for the money. They're in their yachts at Key West, and they have their bets spread.
Woe is us, how disheartening that the people creating the wealth want to keep more of the wealth they create, as opposed to believing the fairy tales the idle class and their myrmidions are telling them.
It's toxic to demand written agreement to stay. The request itself says "Things are so bad that nobody wants to be here. Maybe if we all sign this paper, then at least we're all in the same boat".
(Side note: money is among the least effective incentive. Waiting for a large incentive payout just makes the time more miserable.)
They're called retention bonuses. Similar to signing bonuses, you can be contractually obligated to pay them back if you don't stay for the term of the contract.
Most companies will keep retention bonuses very hush-hush.
(Note: cash paid if you're still there after a period is very much legal)
Marissa must be truly desperate.
Basically, for a contract to be valid both sides have to give something, this is referred to as "consideration".
Now, normally, with work-related contracts the consideration is "continuing to employ you", but with senior mgmt (golden parachutes, stock options, etc) I bet the waters are murky.
IANAL.
But it is enforceable in that Yahoo could sue for damages. The damages probably wouldn't be all that high though. It is more of an issue when the employment is something unique. Like a start athlete or movie star. You can't just find another person to play Tony Stark in Iron Man 4. But there are plenty of people who can be a Yahoo executive, relatively speaking.
Well kind of. Technically you can't force them to work, but you can force them to pay someone else to work in their place. Most teachers have this kind of contract. They are not at will employees. They can't be fired during the school year and they can't leave either. If they don't show up to work, they have to pay the school back for the part of their contract they did not fulfill to pay for the substitute teacher. (This has nothing to do with tenure, BTW, it's true for tenured and untenured teachers alike).
All I'm saying is that a court can't make you work for any company, even if you sign a super-official-sounding document saying "I'll work for this company for ___ years".
All of the stories I've read lead me to believe there has been a somewhat muddled vision and less than spectacular execution on top of that.
Then again it was only mid-2012 that she was appointed CEO. Not enough time IMO, though the stories these days make one wonder if allowing a full 5 years (I think a reasonable minimum term for CEO of a large corporation like Yahoo) is going to be more destructive than constructive. Especially when there seem to be many documented failures, and not much to hang one's hat on, in the form of successes, to this point.
For example if people are trying to knock down the doors to purchase / use what Yahoo is working on but they're abandoning because of scalability issues or buggy systems or continuous delays in delivery timelines, this sounds to me like we're dealing more with execution issues.
On the other hand, if the site / products hum along without glitches, yet are receiving little to no attention or traction from the outside world, this could be a sign that the company is on the wrong track in a more fundamental way. Perhaps more directly linked to the "output" / "work product" of Marissa Mayer as CEO.
This isn't the panacea for innovation or a large company, but if the goal is to raise morale and hire top talent - I know those two things combined would get some experienced candidates to consider joining Yahoo.
Many have subsequently left when they realized the problems run deeper than that.
Tumblr acquisition was not a good one. It was too web oriented and users were moving more to mobile.
It takes a long time to reverse momentum, and to try a lot of things.
I miss picks because that's how I kept track performance of results from my own algos and compare with supposedly experts and crowds.
The thing that jumps out at me is the lack of "hacker" culture at Yahoo. Sure, they have a few really smart people there; but the culture is missing. As long as this is the case, Yahoo will continue to wander aimlessly.
Marissa (or the next CEO) would do well to work on putting together a hacker culture, and get rid of most of the PMs, Directors and VPs. Yahoo is too management-heavy, and hacker-light.
I think Marrissa will be a great COO, but she lacks the vision.
Even people who used to work with her ( Eric Schmidt) had said she is the most quantitative CEO in silicon valley, if not the world. And from many other pieces of information she likes to measure everything, from colour, design or human aspect.
But that is the problem. You cant measure something now and tell you what happens in the future. If you could do that you would be rich in no time. You want to steer the ship to the right direction.
She believe she can Buy into talents with the so called talent acquisition. But if the company are doing some work they love, they will leave. It really is that simple. Talents have no problem finding different Jobs, so you need to do something rather then paying them higher.
Sense of priority, what needs to be done first, it seems to me they are lack of focus. Google too, but google dont have the financial problem yahoo has.
The lack of taste. There, quote from Steve Jobs. I dont know how to say it better.
Sometimes I wish i could get to say a few words direct to Marissa. From a user perspective.
Remember Fiorina? The same situation of a midlevel absolutely mediocre exec getting lucky at catching a huge wave bringing her straight to the top. Just a female, ie. charming, version of a "Yes"-man.
It's not clear to me that Yahoo's business has poor fundamental economics because I don't quite know what business it's in.
Buying, say, tumblr didn't help with that because it's not like a free blogging engine would appear to be a great money spinner. Suggesting you want to make it less R18 then suggests you didn't look too hard at what people use it for.
Similarly, when flickr has a lot of people who are prepared to pay to host photos spattering ads all over it seems like... a lack of understanding of how it works.
flickr makes me particularly sad. The user authentication fuck up was appalling. The ads were moronic. It only needs a couple of minor tweaks, some of which (like albums for groups) to make itself a Facebook alternative on the side.
Second, Steve Jobs focused the company around one or two important initiatives at a time. That was probably his greatest value add. He had a phenomenal sense for which projects were the right initiatives. The original Bondi Blue iMac came out pretty quickly after his return -- not quite a year after Steve had been named interim CEO. That's FAST.
Yahoo! needs to be streamlined (remove poisonous/slack elements), focused (one or two key projects ONLY, kill the others) and fast (release the key projects in 2016). They also need to pick the RIGHT projects. To do this, like another commenter said, they need to remember why they love the Internet. Otherwise they're dead.
Just hypothesizing but imagine if MySpace had focused its industry connections in the music industry to focus more on music instead of social networking, and pushed for an on-demand music streaming player for mobile and desktop. They had millions of dollars in the bank and a head start in the U.S. market over Spotify and Rdio.
Or imagine if Blockbuster video had either taken up Netflix's offer to be bought out or had invested in online streaming long before Netflix.
I'm not saying it's easy or always viable or that luck doesn't play a role, but I often think we discount the potential for a company to still exist today because the only outcome we know of is the outcome that happened rather than the potential of alternate decisions.
On top of stories about large number of executives have left over the course of 2015 (http://recode.net/2015/10/19/yahoo-talent-exodus-accelerates...), the lack of vision/planning that contributed to executive discontent:
> But perhaps none of these incidents damaged morale more than Mayer’s reorganization of Yahoo’s product teams. When Mayer launched the effort last fall, everyone agreed the existing structure had outlived its usefulness—for instance, mobile products was partitioned from other groups. But Mayer embarked on the process without laying out a grand vision for it. Instead, she began sketching out different scenarios in one-on-one meetings with various executives, floating one plan by one exec and a different by another. Unable to make up her mind, the process dragged on for months. “She went through 20 different permutations,” says an executive with knowledge of the process. “The product guys were twisting in the wind, not knowing what they were going to run.”
> Product releases slowed to a trickle, and a turf war brewed as executives became concerned with their futures. Jon McCormack, a star executive who had joined Yahoo in January from Amazon and was promised a broad engineering portfolio covering critical areas like mobile, landed in the vacuum created by Mayer’s indecision. He was gone by the end of February and now works for Google. When Mayer announced the new structure in April, it was too late. “That was the beginning of everyone losing faith,” says another senior executive. “That’s when people started to look for other jobs.”
I don't consider being the CEO of a multi-billion dollar company that's still trying to figure out where it fits in the 21st century a job anyone could possibly do, but it seems like Mayer's strategy has been a little all over the place with no real gain in any segment. From the WSJ article:
> As her strategy has shifted, Ms. Mayer has variously cast Yahoo as a challenger to Netflix Inc. in online video content and as a threat to Google Inc. in Web search, but has made little progress toward either goal.
I'm just not sure where she's trying to push Yahoo towards. What is their vision?
I have a feeling that there are structural problems at Yahoo, like Twitter, that even a unicorn CEO would have difficulty fixing. A lot of analysts and investors seem very leadership oriented in their blame anyway.
Steve Jobs is the epitome of the Magic CEO archetype, in this school of thought, and yet, he founded expensive failures, too, and almost rode Apple into the ground, to boot.
There are so many variables that it seems harmful to the industry and the world as a whole to place so much value and so much blame on CEOs when things go right or wrong.
All that said, I'd like to see an experiment where a CEO steps in, cuts C-level salaries dramatically (taking the hit from people leaving who care more about the million dollar bonus than the company itself), including their own, and re-directing that money to higher wages for employees and deeper, further ranging, research and development. Kinda replicate the history of HP, in reverse: Start with high executive salaries, awful outdated products, and defeated company morale, and start building a culture that looks toward the future, takes care of everyone in the company (before C-levels get bonuses) and treats them all with respect from top to bottom, and build products that define the market not follow it.
But, I've never built or run a billion dollar company. I might be an idiot that no one should ever listen to.
But, you're right, I guess. Steve Jobs' life is a long story arc that ends in massive success, with many smaller successes and failures along the path. In all cases, the credit and blame should (in a just world) be distributed a bit more widely than it is. Apple without Wozniak (or any of the several dozen other superstar engineers that Apple attracted in the early years) would not have become Apple.
Steve would have destroyed Apple completely had he been CEO prior to his experiences running NeXT and Pixar. He almost did anyway -- read up on the stories about how he treated the Apple II division -- the only part of the company that made money up until after the point Steve had left.
If Facebook "has social" that's because they were and still are the best social network. Of course, now that they are big, they've got a huge lock-in effect, but that's besides the point. Microsoft "has the OS" (and I might add Office) because Windows really has been the best general purpose, generally available OS. Other attempts had potential, but they either keep failing to be as polished or stable for end-users (desktop Linux), or have not been available for all PCs (Mac OS, OS X), or they didn't survive for long enough (OS/2, BeOS). Not sure what monopoly Apple has, but it's no point in arguing that most of what Apple does is technically excellent and beautifully executed. Google "has search" because they had and still have the best search engine and their search engine is indispensable for most people. People talking about DuckDuckGo never tried doing searches from outside the US. Google also has Android, Gmail, Calendar, Docs and Maps, all of which are excellent.
Yahoo.com, the homepage itself, has been and still is amongst the most trafficked websites on the Internet. Even now it's in top 5, coming before Amazon, Wikipedia or Twitter. See: https://en.wikipedia.org/wiki/List_of_most_popular_websites
Yahoo Mail existed before Gmail and I don't know what happens in other countries, but in my country Yahoo Mail is still the most popular web mail. But they've been bleeding marketshare, because frankly, Yahoo Mail sucks due to poor UI, poor spam filters and stupid restrictions (like they wouldn't allow POP unless you had a paid subscription). Compare with Gmail and the rise of Google Apps. Gmail with btw keeps people locked in Google's ecosystem, along with Android, insuring that Google's search engine also dominates mobile, because that's how complementaries work.
Yahoo Messenger was a natural extension of Yahoo Mail. In my country everybody was on Yahoo Messenger. It had enormous potential for building a social network and they even made a half assed attempt. Nowadays that's been replaced by Facebook and Skype. Even Hangouts is more popular amongst my acquaintances, because Yahoo Messenger also sucks and it's basically dead.
Flickr has been and is still is the best service for amateur and even professional photographers to share their stuff. Photo sharing is a really big market. Facebook, Instagram, Google Photos, Imgur, Reddit all of them have a place in photo sharing, plus I feel there's still enormous untapped potential in this place. But ALAS they let it stagnate, though I appreciate that in 2015 we finally have mobile apps. But then the Pro subscriptions are now more expensive and make absolutely no sense, as you're paying for something you can get with an ad-blocker - a fatal combination IMHO. I was a Pro subscriber in the past, but not anymore.
Their Search could still be a credible competitor. They just made a deal with Mozilla for distributing Firefox with Yahoo's search by default. But on one hand they ditched their own technology, now relying on Bing for their own results. And also they bring nothing new, while being inferior. They could at least take a stance on privacy, I mean if you can't compete by being superior, at least compete by being the ethical choice. But no. And I'm pretty sure many Firefox users simply switch back to Google, just like myself.
Delicious, just like Google Reader, had enormous potential for a specialized social network of things. They couldn't see value in it and sold it. Oh well.
Do network effects count as excellence?
> Not sure what monopoly Apple has
Does vertical integration count as excellence? What about lock-in contracts (i.e., from AT&T).
> Google "has search"
Of all these, everyone could quit google.com tomorrow if they wanted to.
I'm not saying you're entirely wrong, but just saying they make the best product is missing a huge part of the picture. Maybe saying they have the best business plan makes more sense, assuming you're fine with businesses driven by leverage instead of technical excellence.
On the topic of Marissa Mayer though, has any analysis been done that's an overview of Meyer's major decisions/actions? I seem to see pieces come out almost monthly on things she's been doing at Yahoo, but as someone who doesn't follow executive movers and shakers too much, I don't want to come to an early judgement without fully understanding what her impact is.
That said, I can't help but feel that many of her early "successes" were coincidental and overly hyped, mostly as a result of Yahoo's fortunate investment in Alibaba. If I were currently seeking employment I would be extremely dubious towards anyone trying to convince me that Yahoo isn't still running on fumes, despite all the hype.
(1) the owner of Flickr, an acquisition they've tried to futz around with, but haven't actually managed to damage too much yet. (True, the site design's become much more heavyweight, but that's a general web design issue) Interestingly, whilst they tried to go ad-only, removing "Pro" accounts, they later reinstated them - but with an oddly tone-deaf press release that trumpeted that account level's availability again, and that rates wouldn't go up for two years. Fair enough, except Pro had been $25/yr, and they quietly noted they'd be $50/yr in the future. Is ad-only revenue that strong to consider dispelling paid accounts?
(2) The original curated web index. Fiendishly difficult to scale, absolutely, but while it lasted, it was remarkably useful. Could such still work? It'd be a tremendous challenge, but, Wikipedia might suggest so - it's not as if Wikipedia is free of dead/changed links, but the footnote links do indeed tend to be useful.
Yet, as I recall, their finances are/were quite robust - we may well simply not be Yahoo's audience.
Effectively it would competing with Reddit, HN, Metafilter, and similar sites where the owners have an army of people curating the web for them, for free. Which makes it a hard ask. Obviously there's a demand because Reddit, HN, MF, etc, exist, but enough to make money off of?
Its corporate stagflation. They are too diversified and have too many products to move quickly, generate almost no enthusiasm between either users (all old guard) or engineers/employees, and there's very little that any executive or employee can do.
they are missing the whole "fuck you, were yahoo, were building the internet" chutzpah which was so charming, and for which we all have a little glowing candlewick in our hearts for.
For example .. I really wanted YUI to be usable .. it was so close.. but they didn't listen when people gave them feedback - eg. telling them to polish the table grid widget, this control was arguably the reason people were even using yui at all.
The internet pluggable data feed pipes thing was promising.. almost there but not quite gelling in the developer group-mind.
They have to hire some really opinionated people and let them loose on skunkworks [ but realworld ] projects .
I look at the yahoo front page once every 3m to see if its still dead.. I check my email there due to nostalgia.
They need to forget about ad revenue bullshit, get fired up and make stuff.
I can guarantee there are great people at yahoo gnawing their arms off because they have nothing to rally around.
They are dying anyway .. its time to hit for the bleachers.
I look at the yahoo.com front page, I look at msn.com front page - they look similar and are both spam to a first order approximation.
If they wanted to, they could turn sentiment around in 3 months.
There are so many things they can do :
- become the datafeed API for the internet
- buy a startup thats kicking ass [ and leave them alone to win ]
- buy a tech video review media site thats growing fast
- put up a $200k prize for best Yahoo innovation app
- take 7 devs / designers / product people, put them in a room and let them have at it to make an app
For any of these to work, they have to build a firewall around it, insulating if from the process of a big company, so it feels like a startup.
First: When Larry and Sergei wanted to sell their search engine to them for a few millions, in the late 90s. They said they are focused on curated content, which was the future they apparently believed in. (Just paraphrasing from memory, the stories read in various articles and books on Google & search). But I also wonder, even if Yahoo had bought them out then, would the world be different today. Perhaps, the inevitable future of search would have been just a bit delayed. May be evolved like social networks.
Second: Killing their own search engine in early 2000s, when they had some 30% search share. That was after they tried using Google's search API. Then they started to use Bing. I clearly remember that although Google was the best, but one knew people (lazy friends) who would use Yahoo search. DDG has shown, there is always a market.
edit: typo
Buy and/or integrate: Crackle, Pandora, Roku, maybe Spotify, Cinemax.
Why? All these need to be integrated into a consistent platform, each offer ad revenue opportunity, consolidation. In addition you can ramp up subscription revenues or on demand revenue.
https://docs.google.com/spreadsheets/d/1UHMfzlmE7HXY_ph9BN68...
The balance sheet figure for "Property and equipment" is higher than that.
http://files.shareholder.com/downloads/YHOO/900583056x0x1637...
Cash and assets held on a corporate balance sheet are basically never $1 to $1 accounted for in a market cap. You can easily see that in action on the balance sheets of: Berkshire Hathaway, Apple, Comcast, Time Warner Cable.
Are we to pretend that Berkshire Hathaway's business is worth ~$140 billion after we strip out all of its assets (cash, stock holdings etc)? So its earnings are getting a 7 or 8 multiple? Obviously that's not actually how valuations work. If you stripped out all of their assets, they'd very likely still get a fair market valuation on the operating business and its potential, perhaps 13-15 times earnings.
A similar bogus claim was made that Yahoo was worth less than zero, when its Alibaba stake was at its peak. That's not actually how things work in reality, that scenario solely exists in a calculation.
In reality, if you spin off all of Yahoo's assets (specifically Japan / Alibaba), the business would still be given a multiple, a meaningful valuation. Even lowly AOL was still worth $4.4 billion in the Verizon acquisition, and Yahoo's business is two to three times more valuable than that.
There isn't a single example in the public market, in which a corporation with a relatively clean balance sheet, and $4 billion in sales, is given a negative ~$X billion valuation - much less a company that has historically been given high valuations as a semi-tech company. Which proves how absurdly wrong the negative value premise is (or the $1 to $1 asset discounting method applied to the assets, which are clearly not worth $1 to $1 in the market cap given taxation issues alone).
I'm sure it would but right now, the sum of the parts is greater than the market value of the whole. That says something about investors' expectations for the future prospects of the company.
Look beyond the spin from the WSJ. Look at the profits. Are Yahoo losing money?
- Buy Joyent. Get's you into the cloud game and you gain SmartOS and Node chops.
- Buy BitTorrent and capitalize on its growth and the new sync technology.
- Make YUI popular again in the responsive web era. Tumblr, Flickr, Develpr?
- Probably should stop trying to out-Netflix Netflix. Community was never going to work but I understand the thinking.
- Somebody is going to buy Groove Music (Xbox Music). I hope it's not Yahoo.
* Too many "cloud" competitors, enough with trying to squeeze a margin.
* I wouldn't want to compete with Box, DropBox, GDrive, S3, OneDrive, or BitTorrent Sync. To support enterprise customer at this level, I think is something Yahoo! not too familiar with.
* Another Javascript framework to resurrect, probably time to rethink about how many JS developers you have to hire to to maintain the high visibility and demand from the community.
* Community was a good show, but Yahoo's UI for their video content is just bloat. Too much information, graphic wise not too appealing. They have a shot, but so few people in my circle know about Yahoo video. But I think it still has a shot.
* Why would Microsoft sell Xbox Music?
I think the best thing for Yahoo to do, is to do sports and finance. They can continue to build contents around it. Yes there is ESPNSport, MLB, NBA etc but Yahoo can probably do better if they focus on building a community. They already have a huge sport community, why not use it? They already have content makers so make finance more attractive, try to go after Bloomberg.
Social is dominated by Facebook and Twitter (and their acquired products like Instagram and Vine), but there is still much to explorer around social, not just adding friends.
I am locked into Google and I don't even have a Google+ account.
Shudder.