Reinventing Yahoo

Kara Swisher at the Wall Street Journal is reporting on Yahoo’s trials and tribulations as CEO Jerry Yang works to regain the glory days Yahoo enjoyed years ago when Yahoo, not Google, was the internet wonder company whose upward potential seemed to know know bounds according to many stock analysts and tech watchers.

Here’s more from PaidContent on what some seem to think is a Yahoo mini-bloodbath.

At an SES Conference lunch table I was sitting with several well connected tech watchers and warriors and asked about Yahoo’s prospects. “They are dead” said one search marketing insider, noting that Yahoo search results remain easy to spam, leading to inferior quality and search problems. Another thought Yahoo needs to become the king of videos, essentially working to become “the” online network, monetizing with extensive advertising embedded in the videos. However the concensus seemed to be that Yahoo needed to move “sideways” and simply consolidate their second place search status in the hopes of stopping the hemorraging of morale and stock price.

On balance I’m a lot more optimistic than most about Yahoo’s prospects, though I think they need to get more comfortable copying Google in several respects. Also, given Google’s accelerating dominance in the online sector it seems an MSN buyout is the most logical course for Yahoo and probably MSN as well. This would allow MSN to continue to focus on their bread and butter with Office and Vista while bringing their clever LIVE staff in line with Yahoo. Yahoo would continue much as it does now but be an MSN “brand” for online stuff while MSN would seek to connect as tightly as legally possible their offline dominance with their current online weaknesses. Despite the fact that Yahoo is the clear number two in online search, it’s currently capitalized at about 30 billion, less than 20% of Google’s massive 158 billion market cap and only about 11% of MSFT’s 265 billion market cap. Is the Yahoo online empire worth a mere *fifth* of Google’s? Sure seems to me the answer is yes. Microsoft what’s wrong with you and

Yahoo – what the HECK is wrong with YOUHoo, too?

Disclaimer: I have some Yahoo Stock. Yes, I’m still proud of that!
No, I’m not making money on it. Wake up Yahoo!

4 thoughts on “Reinventing Yahoo

  1. Can you make a compelling post for why MSN and Yahoo! should merge and how they’d be effectively integrated? (investment bankers getting rich doesn’t count as a good reason)

    I still have yet to see anyone do this.

  2. Ha – David I …. um … think I could but it would take more mental energy than I can muster because I agree there would be many problems and some downside risk.

    The gist of why I think it’s a good plan:

    Google has gotten too good for either Yahoo or MSN to compete with alone.

    MSN struggles in many ways at most things online. I think they’ve become used to calling shots and they can’t do this effectively online. They are moving in right direction though and could expedite this with a Yahoo aquisition.

    Yahoo in many ways is a lot like Google, but with (until recently) more problematic high level management. Yahoo’s been better than Google at several “Web 2.0” endeavors (e.g. Flickr), bringing together the best MSN and Yahoo peeps in innovative ways and with creative incentive pay and optionizing should bring some synergy to the mix, and help with sagging morale that seems rampant at MSN and Yahoo.

    Mostly because Yahoo is very big online and very cheap. Would MSN ruin Yahoo with it’s heavier, slower management style? I don’t think so – in fact I think Yahoo may need this type of kick in the pants shakeup to get back on track.

    But…what the heck do I know?

  3. well, I first used yahoo for searching or add my url since 1998!Then I know about Google in 2000. Google is easily add any url submitted (i use, while yahoo (and also altavista) is so carefull to add any new url. Jerry, The consequence is the “url(s) content” on Google is more than yahoo. that’s way I (and many people) prefer Google to yahoo.

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