Comment by pfarnsworth | Hacker News Reader

Comment by pfarnsworth | Hacker News Reader

The investors are hoping for a second-coming of Steve Jobs but they are delusional. But they also have a profitable business. Instead of cutting all these verticals, I think they should build on them, as long as they are accretive to earnings. Yahoo has significant name brand recognition, especially amongst the 40-something and older.

Why not just build an entire lifestyle company around this? Yahoo Internet TV, Yahoo Banking, Yahoo Insurance, Yahoo Real Estate, etc. It might not make Wall Street happy because they're not growing 20% YoY but they would become a one-stop shop for everything a person would need on the Internet, and they can capture a lot of stickiness that way. They tried that to a certain degree but never to the amount of commitment that would make it stick. I think they should double-down and get things like banking and insurance in there, as well, so that people who need to pay bills, etc, will all use the same site.

And keep throwing shit on the wall and see what sticks, maybe they do come up with something that revitalizes them like an iPhone.

But their brand is the most valuable thing about them now, why not just expand horizontally into slower-growth but ultimately profitable businesses?

I think this is what Ross Levinsohn wanted to do, but they chose Mayer, partly based on advice from Andreesen that product innovation was the way to go.

http://www.businessinsider.com/marissa-mayer-biography-2013-...

Relevant quote:

He wanted it to stop competing with technology businesses like Google and Microsoft and focus entirely on competing with media and content businesses like Disney, Time Warner, and News Corporation. As part of this transition, Levinsohn wanted to spin off, sell, or shut down several Yahoo business units. He said doing so would reduce Yahoo’s head count by as many as 10,000 employees, and increase its earnings before taxes and interest by as much as 50 percent.

The full article is fascinating as to how they made this critical decision.

This is what I wondered too. Yahoo could be a great business if they just accepted that they were the Internet Portal for Old People.

But this would never impress investors who are looking for insane returns. As a result, they're taking everyone down with them.

A lot of young people use Yahoo Sports, Yahoo Finance, Tumblr, Flickr etc.

The problem with being the Internet Portal for Old People is that old people have a bad habit of dying. So unless you're also the Internet Portal for Middle-Aged People and the Internet Portal for Young People, when the current crop of old people bites the dust, they get replaced by a new cohort who bring along whatever habits they developed while you were ignoring them.

By old I think they are mostly referencing those who are 40 and 50 years old who were young when Yahoo was first introduced.

Their client base isn't getting larger any time soon. This isn't good for a business for investment.

Yahoo is a public company and they are already facing heavy pressure from activist investors (i.e. quick-buck artists who want their profit locked in now). Yahoo had some leeway to try new things when Mayer was hired, maybe even things with a longer term payoff as you're suggesting, but, well, buying a revenue basket case like Tumblr was the main thing they got around to doing.

They are capable of making world class products still that drive revenue. Their fantasy football UI is the best IMO, and they managed to use that platform to drive their daily fantasy gambling that they have tied to it. Hopefully they could repeat it for Yahoo Banking etc.

If they continue chugging along, they're most likely going to get eaten alive by single-purpose companies who have the capability to offer a more refined product, and iterate at a quicker pace. It would be more valuable to investors if Yahoo split into product-specific components, a la HP. The sum of Yahoo's components will be more valuable than the whole, anyways.

Yahoo's been throwing shit on the wall for a long time, and nothing's been sticking. It's no wonder investors are starting to lose their patience.

Older people care about convenience, rather than the "best" product (I know this as an old person). If Yahoo had a decent breadth of product offerings, and if they marketed it correctly, they could keep most of their customers in their ecosystem. It won't work with kids that are used to 5 different chat clients at the same time, but for the people that don't care as much about flashiness and care more about integratedness and convenience, they could definitely win the way against single apps.

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