Tag Archives: yahoo

Yahoo’s “response” to Microsoft

Posted on by
5

Wow, talk about saying nothing.   Yahoo’s official public response to MS is a blunt “we’ll consider it”.   Given that the offer was so high above Yahoo’s share price, especially after the earnings call meltdown on Tuesday, I’d hate to face shareholders after rejecting this offer which would likely send the stock down.    I just can’t see Yahoo refusing this in light of lackluster performance over the past few years and a questionable future.

The word in tech land seems to be that Jerry Yang really does not want to sell to Microsoft.    Understandably Yang probably wants more time at the helm to try to turn Yahoo around the good old fashioned way:   Hard work.     But I don’t think he’ll win this one.    C’mon Jerry – your net worth just went up what, a billion dollars on the Microsoft offer?   That’s got to be good for something.

 Dis Closure:  I got the Yahoo Stox.   I wants them to go up.

Why Microsoft+Yahoo>Google

Posted on by
7

The Yahoo Microsoft Merger is a very good idea.   Although Yahoo is in some ways a different culture from Microsoft, It seems to me that both of those corporate cultures have become bureaucratic, sluggish, and uninspired when compared to Google’s freewheeling yet very productive approaches.    Yet very importantly, the thousands of Yahoo and MS employees are very impressive, and certainly capable of great things as the online world is reinvented on a regular basis.

If Microsoft can pool the innovations of the LIVE project with Yahoo’s superb developer support programs, and hire and inspire more people to have the evangelical zeal of Googlers, it could be a whole new online ballgame.

The big reason this makes sense is actually very simple, yet is seems to be missed by many analysts now ranting about this as a bad idea.    It’s a mathematical reason.    The traffic from Yahoo+ Microsoft is very substantial.    Yahoo had more total traffic than Google before the merger – it just didn’t have as much of the lucrative search traffic and did not monetize the traffic as well.  With Microsoft traffic, the combined Yahoo Microsoft company will still initially lag Google in search traffic, but it will have *far greater* total web traffic.    This is hugely significant, especially if Microsoft begins to focus more on how important it is to drive potential searchers to search portals inside their own network.    Fear of lawsuits and lack of interest in what for Microsoft was a small revenue source led them to failure in the search business.     Although the LIVE project was inspired, search share still lags so far behind Yahoo and Google that rolling all this into Yahoo search makes a lot of sense.       The combined company would control an enormous share of  global web traffic, and it won’t take too much imagination or innovation to redirect this far more profitably than now.  

Microsoft remains the overwhelmingly huge legacy player in the information technology space.    Google is the clear leader as the new  player.   Can Yahoo inject enough energy into the monstrous Microsoft machine to compete effectively in the online space?    I think there are many potential pitfalls, but on balance  you need to do the math, which says that in online footprint, content, and market capitalization:

Microsoft +Yahoo > Google.  

News release from Microsoft

Disclosure:   I have Yahoo shares.  In fact I doubled them on Tuesday!  Yippee!

Microsoft offers to buy Yahoo

Posted on by
Reply

I’m feeling kind of smart today after feeling stupid *yesterday*.    I had doubled my Yahoo stake before the earnings call, wrongly thinking that a good report was in store.     However just fair earnings and poor guidance knocked the stock back a few dollars the next day.     But it’s surging today as Microsoft has offered 44.6 billion for Yahoo, effectively making it worth a lot more than yesterday.

Perhaps the price hit after earnings drove Yahoo to some sort of strike point for Microsoft.    At CES I  think I may have been right to suggest there were high level meetings between Gates and Yang regarding a Microsoft Yahoo Merger , clearly MS must have been thinking about this for some time.  Rumors have been swirling for over a year.

Yahoo carnage coming at conference call.

Posted on by
6

As a Yahoo enthusiast and shareholder it’s been hard to watch the company struggle so hard over the past few years only to lose ground to Google, especially because Yahoo’s social networking efforts and web 2.0 initiatives have in most ways been superior to Google’s.    Flickr is the best example of a superb Yahoo application that is more used than Google’s Picasa (which is also excellent but was late to the scene so most early adopters are sticking with Flickr, which is somewhat better anyway in my view).  

Henry Blodget at Silicon Valley Insider is reporting that Yahoo will proceed soon with the drastic layoff scenario – rumored to be some 1500-2500 people.

Human issues aside, this will likely be very good for the stock price and company’s future prospects.    Google learned early on that the key to profitability was scaling up systems without comparable scaling up of staff.   Google thus leveraged the incredible efficiency of computers to generate more profits.   Yahoo, on the other hand and especially with Terry Semel in charge, sees themselves as more of a media and content producer with all the labor intensiveness and lack of internet efficiency that approach entails.    Google was right, Yahoo was wrong.    Even Google’s own Youtube, a masterpiece of creating cheap content without staff, is struggling to monetize all the content and traffic.    

I’m oversimplifying the relationship of content production to profit here, but in general terms I continue to believe that the expression “content is king” was *never* true on the internet, and that in many ways sticking to this mantra cost Yahoo a big part of the ballgame.    Yahoo actually used Google search as Yahoo’s search tool for many years, and could certainly have aquired Google in the early days for millions of dollars rather than becoming eclipsed by Google which now has a market capitalization of about five times Yahoo.   Why didn’t they do it?    Google was “search”, not “content”, and Yahoo foolishly believed content was king.    

Content is a pawn in the big online chess game, and don’t forget it.    

Yahoo’s Yang and Filo at CES

Posted on by
1

Yahoo’s Yang and Filo at CES
Originally uploaded by JoeDuck

One of the things I left out of my earlier David Filo interview post were the details of Jerry Yang’s talk, which I’d have to say was lackluster given the amount of attention the markets are paying to Yahoo leadership right now, and given the slick pizzaz of yesterday’s Gates keynote. (C’mon Jerry – no Guitar Hero action?). Yahoo spent a lot of time talking about and “introducing” Yahoo Go” Version 3, a product I’m not familiar with but Yahoo treated as if it was a household word. It looked a lot like the MS mobile phone innovations and offered excellent info+browser+mapping+data integration for phones. Also announced was an expansion of mobile and widget platforms to make them more “open” and therefore more appealing to developers, though I’m not clear how significant this will be. Yahoo, like Microsoft yesterday, noted that they are looking at *billions* of mobile users and that although PCs are still important to them it’s clear that mobile is the bright and shining star where innovation will be happening.

Disclaimer:  I’ve got some Yahoo Stock, but none of it was helped by this post.

Yahoo’s David Filo on Yahoo

Posted on by
3

After Yahoo CEO Jerry Yang gave his talk today I had a chance to interview co-founder David Filo, who had just come in for the end of the talk and was hanging around afterward. Like many Silicon Valley elites David was engaging and personal and answered several questions for me.

First was simply a confirmation that David’s plans are to ease out of some of his technology management roles at Yahoo while Jerry’s intention was to stay engaged into the foreseeable future as CEO. When Semel left Yahoo some industry watchers suggested Yang would not stay long, but those rumors appear to have been unfounded.

I asked David if he’d met with Bill Gates during CES. He said “I haven’t”, which leads me to my current working hypothesis which is a little wild, but that’s what blogging is for!

The hypothesis is that the Gates Keynote last night and the Yang talk this morning were not coincidental, but were the result of meetings – probably last night – between Gates, Yang, and perhaps former Yahoo CEO Terry Semel. I’ll certainly take David at his word that “he” did not meet with Gates. Semel was *in the audience* this morning but was not introduced.

I should note that when I pressed David to talk about a potential merger he suggested he feels Yahoo has a lot to do themselves before moving in that direction, but he also noted how the industry moves in fast and furious ways. He actually asked *me* what the advantage would be to that. I’ve written about that before here at the blog but in short it’s that Yahoo+MSN would be able to fight Google in ways neither appears to be able to do alone.

So I’m not predicting a merger/buyout but I sure wouldn’t rule it out, and I’m guessing there are informal talks going on – probably here at CES.

Disclaimer: I’ve got some Yahoo Stock. Not that it’s making me any money mind you, but I’ve got some.

Weave -ing the twisted path to browser enlightenment?

Posted on by
2

Mozilla is announcing Weave, an application that will enhance the browsing experience in various ways.   I’m somewhat confused about what this means to users, but my early understanding is that this is a Flock-like approach, trying to make the browser environment a better one for socializing,  multitasking, and customized uses.

Generally I think this is a positive thing.   For reasons I don’t understand few of us really take the time to use and configure the many applications that allow us to customize our desktops in more functional ways.    Google desktop, My Yahoo, Flock , and many more tools would allow us to build a great “control panel” for our online needs, but this appears to be a fairly low priority for most of us.    I think it is analogous to how rarely people use even the simplest extra commands at Google search to refine their search.    For reasons that escape me we don’t like to improve on design or functionality even when doing so is easy and does not take much time.     Some do, most don’t.  Why?

Search Ranking Factors

Posted on by
2

Rand Fishkin’s SEOMOZ has been doing some of the best work collecting data from prominent SEO folks and groups of experts and then analyzing that data.     Back in April I missed this report about SEO ranking factors but it’s a great read, especially for those who have little idea about how to optimize a website and web pages for better placement in search engines.    Note that experts do not agree.    Also, my fairly extensive experiences have convinced me that Google changes the ranking rules regularly simply to make it impossible to reverse engineer them.   But it’s still important to follow these basic recommendations which include what I’d argue are now the “prime directives” for optimizing websites:

Create pages that are of high and unique content quality.

Use URLs and Titles that are highly relevant to the queries you wish to rank for.

In bound links are still very important – seek external links and create internal incoming links using your desired keywords as anchor text.

Tend to exaggerate the keywords you are targeting.   ie the best writing will NOT result in the best optimization due to defects in the way machines process word information.     

Trickles of web content to become floods, sweeping away the cable industry? Maybe.

Posted on by
2

Henry Blodget at Silicon Alley Insider has a good insight about the threat to cable from online feeds, which are now a trickle but could become a flood.    Blodget notes about the agreement between Yahoo and CNET:

… cable companies, meanwhile, depend on monopoly access to networks like CNBC and cannot afford to be circumvented by, say, a live CNBC web feed (lest a web trickle become a flood)…

I think Cable still has a viable future for at least the next 5 years because convergence of media is going to take a lot longer than most think, and if Cable is smart they’ll find ways to be the key broadband conduit into the home as they already are for millions of American homes.    It seems to me that the internet is more threatening to information driven media like newspapers than it is to entertainment driven media.   The is partly just a bandwidth issue – currently it’s not realistic to expect people to buy, configure, and use the fledgling broadband movie services.     How soon will this change?    5+ years in my estimation.   Of course eventually super high bandwidth streaming into most homes will be the likely main paradigm for home entertainment, but this won’t happen for some time.   We are too stubborn to innovate nearly as fast as technology allows.

Yahoo! WAKE UP!

Posted on by
3

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……