This legitimate question has been kicking around the worlds of technology and media for about 10 years. Kara Swisher asked it again, with some resonance, in preparation for today's talk with new Yahoo! CEO Carol Bartz at the All things D conference.
After all, in 2009, it is still hard to answer the simple question: What is Yahoo?
That’s the one that stumped former Yahoo CEO Jerry Yang onstage at our sixth D: All Things Digital conference last year.
And, it will still be the key query that Yahoo CEO Carol Bartz will need to answer when she takes the stage Wednesday morning at D7.
I have been noodling all weekend about what to ask the forthright executive, who does not seem to mince words or suffer fools.
That’s good, since it will take that kind of gumption to clearly lay out for the influential crowds of attendees and assembled tech press exactly what she is going to do now that she has started to make the basic structural changes at Yahoo.
I can't wait to hear Bartz's answer. (update: her answers are posted here)
Not knowing the company's core focus means that projects get approved, but underfunded. It means that what was important last year is no longer strategic this year. Witness the departure yesterday of the talented Satish Menon and the write off of Maven Networks, a video platform company that Yahoo bought last year for $160 Million. Um, yeah, I just said what was $160 Million important to Yahoo last year is no longer important today.
The highest levels of Yahoo! MUST have a clear and compelling vision for what products it wants to make better than anyone else.
Founded as a web directory , Yahoo started by offering people easy to navigate links to the relatively small universe of web sites back in the day. Then it branched into Mail (with the acquisition of four11, the genesis of Yahoo Mail), Media (think Yahoo! News, Sports and Finance) and Community (eGroups, the genesis of Yahoo! Groups).
Terry Semel came aboard as the CEO in 2001 and brought professional culture to management sales forces, and was handsomely rewarded when the online economy rebounded.
Recovering from the dot com bust and recognizing the threat of Google to the business, Yahoo! bought into search via Overture and Inktomi (in 2002-2003). Between 2004, the company bought into some other relatively small businesses, including Flickr.
The company has grown through acquisition and a "fast follow" strategy, recognizing emerging trends and buying and occasionally building in to new web businesses. Yahoo! has never been a strong incubator of unique ideas, but has excelled at scaling businesses BIG and globally, and monetizing them.
So, what you have is arguably a business built by acquisition into the following grouping of core services the company offers customers:
Search
There are 2 fundamental questions that Yahoo! must answer here. First, how to compete with Google. Is it by copying Google features (arguably, the strategy for Yahoo! from 2004-present), by differentiating itself with features, or by offering customers a completely different experience than Google, essentially finding a way to turn search on its head.
The second question is whether to sell this business or not. This has already been endlessly speculated upon, and I have no great insight to add to the debate.
Communications
By communication, I mean Yahoo! Mail, Yahoo! Messenger, Yahoo! Groups-- all number one in their product categories globally. (Flickr is here too, but I won't speculate on it because I work there).
Arguably, many of these products have stagnated in the last several years, and have lost focus. And more than other Yahoo! businesses, these are the most threatened by the rise of completely new ways of communication like Facebook and Twitter.
I think Yahoo! should pursue 2 tracks in parallel for these business. First, they must develop a clear product differentiation strategy for Mail, Messenger and Groups. These are diamonds in the rough, lack a clear purpose (nee value proposition), and deserve to be restored to their rightful place as best in class web and mobile products, which they currently aren't.
Secondly, I think Yahoo! must find and acquire some small social products that it can stitch together as an alternative social network or sorts. Yahoo! can't afford Facebook or Twitter, but it may not need these. If Yahoo! can find a emerging social tool and then scale it (via Yahoo! mail, et al), it can effectively create a new facebook-scale social tool. It needs to be an acquisition, because up until now Yahoo's internal social network building has been lackluster.
Media
Meaning Yahoo! News, Sports, Finance, Entertainment, Shine, OMG, blah blah blah. These media properties are strong in the US, and have less-dominant roles in most other markets around the world. These are core to Yahoo! and what it is to customers, but just like the communication products their focus and quality have a mixed record in recent years.
Historically, these have been sites that package up content from other sources with some original reporting and data services (Finance, in particular, has carved out a really uniquie position offering best in class original content, tools and data).
What sort of content will Yahoo package in those sites? Will it be licensed content, like Reuters, AP, etc) or will it be originally reported, as AOL seems to be pursuing. Or will it be user generated? Or will it be all 3, as Yahoo's female-oriented shine has had some success packaging together? And, what media properties does Yahoo! want to offer? Currently, there is a long list of thinly spread media sites that the company offers.
Everything Else
Here's a long list of everything Yahoo! offers, if you're interested. These maybe should, or maybe shouldn't be divested. But I can't see how they're core to the future of the company.
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(this post reflects my personal views as a shareholder. It does not represent any informed position as a Yahoo! employee)
well put!
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