Yahoo has been in the news a lot lately. Mainly about things like “Omg Marissa Mayer is a lady,” or “Marissa Mayer is pregnant, how dare she,” or “Marissa Mayer isn’t letting anyone work from home anymore, that horrible monster,” though the past few months have been littered with actual business news regarding Yahoo’s recent acquisitions of companies. You see, Yahoo is determined to become the biggest and baddest in web, and they aren’t afraid to spend any amount of money to do so. After all, they just bought Tumblr for $1.1 billion dollars, and put a bid in a few days later to buy internet video giant Hulu at somewhere between $600 and $800 million. So, Yahoo isn’t afraid to throw lots of money at the problem, but is it even going to be worth it? Is this the dawn of a new age, or the beginning of the end? Chances are it’s going to be more of the latter.
Yahoo is in the midst of the complete overhaul, largely at the hands of new CEO Marissa Mayer. She was brought on from Google (of course), and at the beginning of her tenure, expressed her desire to focus on improving Yahoo’s existing search and e-mail. Well, we’re just starting to see the fruits of that now, and the result is… pretty much exactly like Google. They’ve made it faster on the back end, but on the front end, the new Yahoo search page looks like Google‘s. They also just shut down their Classic email system and began moving users to a new system, which, again like Google, scans your emails for advertising keywords.
Now, I get that this makes sense financially, because more advertisers will want to advertise with Yahoo now that they have this system. But if everything is going to look the same and work pretty much the same way, where is the impetus for people to switch or not switch? If they’re both exactly the same, what is even the point? Where is the innovation there? This move is probably coming about five years too late, and it might not be enough to save it.
Also, Mayer announced her vision for the new Yahoo earlier this year at the World Economic Forum meeting, where she said she would be focusing on mobile and social products. This makes sense, because Yahoo gets about 200 million hits a month from mobile users. But not all of the company’s business moves have really made sense with this vision, and again I think it’s about five years too late (co-founder Jerry Yang even predicted this shift five years ago, so where have they been all this time?) They later outlined what this meant, saying that they plan to compete in mobile through partnerships, not hardware or an operating system like Google and other companies do. Yahoo even has a mobile OS, called Axis, which launched last spring. I have never heard of it before. This explains all the acquisitions, but do they even make sense, business wise? Most of their recent acquisitions have been more social media focused, with Tumblr, Snip.it (a Pinterest meets news start up), and GxYz, a social game company. Not to mention the fact that historically, Yahoo’s acquisitions of companies have not been successful.
In 1999, they paid 5.7 billion for Broadcast.com, an internet radio company. This should have been a success because internet radio is pretty big now, and they were definitely ahead of the curve here. They renamed it Yahoo Broadcast Solutions (what does that mean, even?), and eventually split it into Yahoo Launchcast for music, and Yahoo Platinum for video (shouldn’t those names be switched around?), and Platinum was eventually shut down, because no one used it. Launchcast is now Yahoo Music, but again, who uses it?
That same year, Yahoo paid $3.6 billion for Geocities, and then did nothing with it, and Geocities now is only available in Japan. At the time of acquisition, it was the third most visited site on the web. In 2004 they bought HotJobs for $439 million, and then it started tanking as more competitors moved in, and they sold it in 2010 to Monster for half the price. They also have a history of alienating the current users of web products they have acquired, such as when they wanted all Flickr users to have Yahoo emails. And then there was the whole Delicious fiasco.
Mayer has promised not to “screw it up” with Tumblr, but given that site’s youthful demographic, Yahoo definitely has to tread lightly. Young people, more technologically savvy than any other demographic, will find an alternative (or heck, they might even make it themselves) much quicker than Yahoo will be able to find a solution.
For the most part, Yahoo’s vision for their future seems almost schizophrenic, and instead of taking matters into their own hands and coming up with their own innovative new products, they’re simply content to make what they have like everything else out there, and then buy other companies that are already quite successful (for now), probably for way, way, too much money. It’s too early to say, but I wouldn’t be surprised if this goes down as it has every other time, because despite new management, they don’t seem to have learned anything from past mistakes. So far, it’s been an ambitious plan, executed as safely as possible. And while Google is not without its own problems, you can’t accuse them of always playing safe. In the fast moving world of technology, risk is something a company has to take– otherwise they wind up obsolete.
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Megan Patterson is a freelance writer and the Science and Technology Editor at feminist geekery site Paper Droids. She also tweets more than is healthy or wise.
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