The Yahoo Problem | Hacker News Reader

The Yahoo Problem

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>So Mayer had a plan to bolster Yahoo’s mobile offerings and once again make it a top internet destination. However, a plan like this has three drawbacks: 1) Developing desirable well-trafficked mobile properties requires lots of hard-to-hire-for mobile design, engineering, and product talent. So Mayer chose to acquihire promising mobile startups instead.

Actually, when Mayer came on to Yahoo as CEO, Yahoo recruited pretty efficiently. I am a decent mobile engineer and I was really tempted to apply when a recruiter reached out. It was the wrong moment for me, being really happy at my job that time - a year later or before I would have likely proceeded with the interview.

Another strong mobile engineer friend of mine got rejected on the Yahoo interviews and was pretty disappointed at the time. The story recruiters were telling was that they are builing a bunch of greenfield mobile projects, as well as having a couple of "startups within a big startup", with the financial security of Yahoo. This was very credible at the time and I'm sure they did get a lot of engineering talent into the company.

I do not know what the main things were that went wrong. However I would not pinpoint it to recruitment or lack of engineering talent: they did well on that. As an outsider engineer my guess would be culture and non consistent strategy or vision. Building mobile apps for the sake of building mobile apps and getting users was never a viable vision even in 2012.

Agree - I know a few mobile folks (designers and devs) who went to Yahoo during this time and it definitely seemed like an exciting place to be.

I remember in that period Yahoo successfully turned their reputation around from "eww why are you applying there" to "wow maybe I should too". They were doing some very cool greenfield stuff, and with the release of the new Weather app (among others) they looked like they could walk the walk.

Ultimately many of these products sputtered, but of all the things Yahoo did right under Mayer, recruiting and industry reputation was definitely one of the bright spots.

Though that said, none of the people I know lasted very long at all, so I suspect there's some deeper dysfunction.

Good points. The mobile vision is still viable and abused today. Lots of slow moving big Co are wanting to get on the mobile bandwagon. In al industries. You can make a good deal of money by serving them.

Another mis-analysis of Yahoo. The situation is and had been very clear- Yahoo has never accepted what it is: A conglomeration of useful web services and utilities. Not sexy, but used by millions and potentially very profitable with properly tiered service levels. Instead it has always called itself a "media company" and chased after the success of its competitors. When I worked there a decade ago it wanted to be Google. Now it wants to be Facebook, YouTube or god knows what. This, combined with the inexperience, ego and vanity of Mayer assured Yahoo would continue its slide to irrelevance. Very sad.

> Another mis-analysis of Yahoo. The situation is and had been very clear- Yahoo has never accepted what it is: A conglomeration of useful web services and utilities. Not sexy, but used by millions and potentially very profitable with properly tiered service levels.

I don't know that they never accepted; when I did my new hire orientation in 2004, the thing that stuck with me, other than not to ride scooters indoors, was that Y! intended to be in the top 3 in every vertical on the internet, either directly or via cobranding, or 'everything you want to do on the internet, Yahoo can help you do that'. That was behind the 'life engine' brand campaign as well.

This strategy was derided in the infamous peanut butter manifesto, but it seemed reasonable to me; leveraging the core company to provide login services, ad services, etc, the team I was on was able to compete well against other companies in our space, with a much smaller team, for a long time.

The vanity of Mayer? FFS she's been trying to save Yahoo.

I think "vanity of Mayer" could be better stated as perhaps "commitment to a predetermined path". She's trying to make Yahoo like Google. I don't think it's vanity so much as a "this is what you hired me to do". If the board wanted Yahoo to be a media company like AOL they would have hired someone else. By hiring MM they doubled down on becoming a big player in tech.

Now, years later, the board might be changing their mind. That's generally a problem after doubling down.

Would you agree though that Yahoo has not kept up with users moving their attention to smartphones, and there will be a corresponding loss in users and profit in the long run? If so, I believe Mayer was trying to correct this through her efforts.

Amazingly, Yahoo Stocks, Weather and Mail are in the top 25 apps by usage. But this isn't because of any particularly impressive strategic thinking on Y's part. Their big efforts like Katie Couric and Community flopped like crazy and their "MaVeNS" strategy (if you want to call it that) is pure stupidity: Mobile, Native, Video and Social? Mobile isn't a product, and even just as a general focus, Google seems to be making a bundle from the PC Web still, so why would Yahoo not continue to put massive effort into its most well known service? Native advertising is... mobile advertising, so OK. Video as a category is owned by YouTube, Netflix and various big media companies like HBO, so focusing on that is as futile as focusing on Social which is owned by Facebook, Twitter, Snapchat, etc. In summery, there's no strategy. Mobile is obvious, advertising is how Y makes money so that's a no brainer, and the rest is suicide.

Mayer's thinking is simplistic, shortsighted and driven by pure vanity. Nothing she's doing now or is willing to do can fix Yahoo.

> Mobile isn't a product, and even just as a general focus, Google seems to be making a bundle from the PC Web still, so why would Yahoo not continue to put massive effort into its most well known service?

Because mobile is growing faster.

Moving to mobile devices is always hard and expensive.

Yahoo has to compete with other mobile apps and companies. Yahoo didn't convince mobile users to use their apps instead of competitor's apps. There was no advantage to the mobile users to watch videos on Yahoo instead of Youtube for example. There was no advantage to use Yahoo Mail instead of Gmail. There was no advantage to use Yahoo News instead of Google News.

Yahoo should have moved to mobile apps years ago, when the market was still young and growing. It has become too late as Google, Facebook, Twitter, etc already have a lock in with mobile apps. All Yahoo can do now is try and catch up with the others. What they need to do is innovate new features no other app has instead of trying to catch up. Find some new niche market and make an app for that.

His point about Yahoo being a conglomerate the day BABA started trading I think is really important. One of the biggest issues for the CFO of any public conglomerate is that it becomes very easy to see which divisions are weak.

As he mentions, when the value of BABA grew it actually created a problem for Yahoo in that it made it clearer to analysts what the real value of Yahoo was. Yahoo leadership must have know this and realized this could cut down the time they had for their turnaround.

To show the other side of being a conglomerate there are a few other interesting companies that operate like conglomerates in Yahoo's space but do so well...

Look at Microsoft....They are essentailly a conglomerate now, most people coud name their revenue stream... OS, Office, Servers and tools, Azure and what ever Bing, Xbox etc are rolled into.

Every reporting quarter people can see with a fair bit of clarity how well their search and console efforts are doing, and people did point to the huge losses early on for that division. If Microsoft didn't have such strong leadership the entertainment division may have been shuttered.

Google is an example of a conglomerate that went that way for a different purpose. They were in competition with Baidu, Bing, and Facebook for search revenue and they wanted to better hilight just how well they were doing. So they form Alphabet so they can better show just how much they spend on moon shots and at the same time show just how profitable their advertising revenue is.

I figure Mayer was brought on to do one thing: sell the firm, at the best possible price.

The Alibaba stake serves as a barrier against hostile takeovers (21B is a lot of capital), but when the firm really does need a buyer, they don't have one. Presumably Mayer's goal is to attract a bid from either Google or Microsoft. She has contacts within Google, and should have a decent understanding of how the firm values acquisitions. Hence the layoffs, constructive dismissal of remote workers, the Firefox bid, and such.

I have a question about this article and in general about every article in the lines of

  -how to save X
  -what was the problem of Y
  -what should XY focus to fix the problem

How is it possible for the poster (say a blogger or a more pro journalist) to be able to pinpoint a problem, a solution or to offer a plan to follow to get X afloat?

I mean if every one knows how is it that X still cannot get afloat, they could be hired to fix the solution but this is the case under which Marissa in this case were hired right?

Or are this articles baseless most of the time?

The articles are usually written after the events have played out, so the authors have the benefit of hindsight. Marissa on the other hand had to make tough decisions in the moment.

Ex-employees and Silicon Valley insiders often do have valuable insight, including foresight.

Boards generally hire a CEO to sort out the issues rather than "crowd-sourcing", so even informed opinion is not used.

Marissa was a better choice than the previous bozos, but still a bozo - somebody who only had one job since uni, dated the founder of Google, and never was a CxO in a public company. Shame on the Yahoo board, yet again.

In other words, not a businessperson.

I really wish the restrictions can be reduced or removed so @pmarca etc can tweet more on the companies of which they are on the board of. Same for the CEOs itself, and CEOs and other executives should be allowed to tweet at board members and vice versa.

It is also possible to know what "the problem" is and still be unable to find and implement "the solution" in the climate a business is in. The reason why new companies are able to succeed where old companies fail is because they don't have to deal with investor expectations or legacy projects that are sucking down talent and resources, but can't be cut because of politics and the fact that you need the income they're bringing in now even though you know they will be deadwood over the long term.

Everybody loves strategy. It's an easy and fun fantasy to put yourself in the place of the CEO at a giant company. And it doesn't feel like science, where you have to actually study lots of math before you can have an opinion.

Outside perspective. Same reason companies hire (very expensive) management consultants.

Off-topic: It's fascinating this was written by a medical student who writes code in his free time.

It is so stupid that we have this concept that managers should maximize shareholder value as if they are the only stakeholders in a company.

Really and truly what did the current shareholders do for YHOO on a daily ongoing basis?

The current shareholders did not invest any money in YHOO - they bought their shares from 3rd parties (YHOO did not get any of that money )

The current shareholders are not helping make YHOO better in anyway - arguably shareholders in any public company are just making management's job harder to think long-term and strategically.

This concept of "maximize share price" as the true role of management has lead to financial engineering of fiscal reporting, and then subsequent earnings restatements.

Build something people want. When was the last time Yahoo did that?

I briefly used Yahoo Weather until they introduced huge ads and then deleted it. Prior to that I used Flickr and Yahoo Mail in 2004/2005.

This is a good reason to look at fixing corporate taxation, I think.

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