Yahoo’s problems and a possible path to solve them.
In January 1994, Yang and Filo were electrical engineering graduate students at Stanford University when they created a website named “Jerry and David’s guide to the World Wide Web”. The site was a directory of other websites, organized in a hierarchy, as opposed to a searchable index of pages that one year later was called “Yahoo!”. The word “yahoo” is an acronym for “Yet Another Hierarchical Officious Oracle”.
By 1998, Yahoo! was the most popular starting point for web users and its stock price skyrocketed during the dot-com bubble. Yahoo stocks closing at an all-time high of $118.75 a share on January 3, 2000 but after the dot-com bubble burst, it reached a post-bubble low of $8.11 on September 26, 2001.
In February 2008, Microsoft Corporation made an unsolicited bid to acquire Yahoo for US$44.6 billion. Yahoo formally rejected the bid, claiming that it “substantially undervalues” the company and was not in the interest of its shareholders.
Three years later, Yahoo had a market capitalization of US$22.24 billion.
In early 2012 with Scott Thompson as CEO Yahoo announced a cut of 2,000 jobs or about 14 percent of its 14,100 workers. Thompson also completely reorganized the company. On July 16, 2012, Marissa Mayer was appointed President and CEO of Yahoo and a year later the Yahoo board approved a US$1.1 billion purchase of blogging site Tumblr.
Yahoo has a big range of products starting from the popular news websites and finance, cloud services, social apps and less known services for the business area, games, maps, shopping and videos. Currently the company is trying to focus on a smaller number of services in order to improve them. During the last couple of years Yahoo dropped off its directory and education division leaving some doubts in the public. If Yahoo wanted to catch up Google, the education department should fundamental to reach a young audience.
So what’s Yahoo? We don’t really know.
The company has renewed his design environment joining under the same style all its original services. It was a big step backward, in fact compared to the new Google’s “Material design” Yahoo’s interface is still at the stone age. Some improvements have been made on the new Yahoo’s app called News Digest.
Most of Yahoo’s products have to compete with established company that focusing on their main service conquered a particular market. Local has to compete with Fousquare and Tripadvisor, Monster with Linkedin, the cloud services with Google Apps, Messenger and Groups with most of the social networks and so on.
Marissa Mayer has focused his attention on renewing Yahoo’s staff, in fact most of the start ups she bought as CEO have been closed and their staff has been moved to the company mobile department. This policy has been deeply criticized by a lot of tech commentators because at the current state of things the new staff haven’t changed the future of Yahoo. Here some of the acquisitions Yahoo made in last two years:
Hiring new people is not enough or so it seems. If Yahoo wants to continue its fight in the tech battle it has to make some choices, maybe to close old products in order to focus on the most performing ones.
First of all Yahoo is missing a common and modern design for its products so, even before approaching the mobile world, it should focus on creating a multi platform design for its services like Google did with its “Material design”. Once this step is done it’ll be easier to connect its products so that the user doesn’t log in into Yahoo Mail but in the Yahoo World and can easily switch from a service to another. But the Yahoo environment won’t exist until the company creates a real cloud service which includes mail, calendar, contacts and a cloud storage.
Completed these first steps Yahoo would earn the user’s trust and could start working on the business side providing web hosting and business mails to small business which increase advertising revenues than what managers would pay for the base services. It would be the protagonist of many businesses approaching the web and, with its commerce central could create an attracting store for many online customers.
So faster Yahoo cuts its dying parts and start focusing on what it misses the faster it will be back on the tech scene.