It’s very frustrating being a Yahoo shareholder.
Not because Yahoo isn’t a good company, in fact Yahoo is a *great* company.
Not because Yahoo doesn’t seem to “get it”, Yahoo arguably “gets it” better than almost all other companies in terms of Web 2.0, the social networking space, and in terms of the importance of open architectures and developer support.
Not because Yahoo doesn’t have any of the lucrative search market share. They are the clear 2nd place in search with huge search activity and over 20% of global internet search traffic.
It’s frustrating because despite all the advantages, Yahoo just can’t seem to capitalize on all these advantagesto turn a good buck, monetize the site to full potential, and increase my share price. Google, with total traffic levels about the same as Yahoo, has a stock capitalization some *FIVE TIMES* that of the company with arguably very similar potential for profits.
Little internet companies and even many very big ones have a good excuse for failing in profitability – online biz is a cold and cruel world and for all the but the huge players everything can turn on a dime. Yahoo, on the other hand, has no good excuse for failing. They are a market maker in terms of online search, global internet reach, online video, and …. this just in for me …. they are HUGE in the Social Networking space. Yes, that would be the social networking space everybody is so excited about. What do I mean by HUGE? Let’s review this graph from Compete.com via TechCrunch.
First we need to note that Compete.com is not even remotely a perfect measure, and also adding “unique visitors” in this fashion is counting some folks twice. Also, they are listing sites like Geocities that are arguably not social sites, though I’d argue they could be “open socialed” quickly with an effort in that direction. Since the overlap at these traffic levels is probably not a very big deal, and also assuming they spend time as if the Yahoo properties are separate sites their ad potential may be the same as if they were different folks, these numbers are important and relevant.
So, the big players first:
Myspace: 72 million unique visits in October
Facebook: 33 million
Yahoo: 38 million …..
<screeching reverse halt noise here>
What? Yahoo has more social traffic than Facebook?! Yes they do if you add Flickr and Geocities and Yahoo Groups.
Aside from the fact that Caterina and Stuart and the Flickr gang are probably thinking they sold out a bit too cheap at only 20 million, Flickr is an astounding success with some 14 million users and growing. Personally, I’d rather hang out at Flickr than Facebook anyway.
So, where does this huge number of users in the Yahoo social networking juggernaut leave us?
Frustrated baby, frustrated……
Joe Duck 
I feel your pain as a brother shareholder. 🙂 Yahoo really does a lot of things great and they have all the makings of a fantastic and compelling experience – combining the ridiculous breadth of actual content (something Google doesn’t have even a fraction of), the web2.0 savvy of all their acquisitions and their actual human relations with content providers (something that Google is trying to do, but they’d have more success if someone who wasn’t a CS major ever got any say in how the public was treated).
Sadly, their problem has always been one of vision and execution. Sigh. Something needs to change up big there, methinks.
Thanks for the comment Felix! But um…could you send me some Google shares instead 🙂
Well, admitedly I’m not too well qualified to comment on some of this but I must admit that I’ve generally felt Yahoo fell down on its display features. This would simply be a user-interface issue and that is an awful shame if its costing the stockholders money. Their mail features were good but it was hard to understand what selections were available and just why the default typesize was so small.
I don’t know if all this ‘social traffic’ is properly considered an asset to be monetized but if it is, why is Google able to rake in the dough and Yahoo but an also ran that consistently falls short?
The Yahoo team has to hire a rather dumb person who is not a techie type and give them real power to make changes in the products and the way they are marketed.