5 Take-backs from YAHOO for Global Entrepreneurs

And what I think went wrong for Yahoo?

Verizon acquired Yahoo for $4.8 billion.

No doubt Yahoo is one of the pioneer companies of the internet, founded in 1995 and came up with its trademark products/ services like yahoo search engine & yahoo messenger which were all the rage in their era! Yahoo started even 2 years before getting a huge jump start in front of their competitor, Google, yet couldn’t sell itself for more than $5 billion? So questions which comes to everyone’s mind.

  • Is $5 billion enough for a company like Yahoo?
  • Why companies like LinkedIn and WhatsApp were acquired for much more money than Yahoo?
  • Why no one was putting their hands on Yahoo during the bidding?

Writing this article from a layman’s prospective with a bit of technical know-how of the IT industry, ill tell you what Yahoo could have done better.

Yahoo! — What did they do?

It’s very important to know what Yahoo was actually doing before making comments. This article by Matt Gierl shows trends of different yahoo businesses. Most famously known as website directory, Yahoo also made money off adverts along with several weather, news, and fantasy sports.

The Do Over — If we could go back in time

The Messenger

Don’t think Yahoo was old and without innovation, rather they were the ones that came up with the amazing Yahoo Messenger. Today facebook has over a billion active users. Had Yahoo been competitive and had done integration with mobile devices and introduced features like push messages and others they would definitely be in the game.

The Geeks

By the end of the first decade, Facebook, Apple, Microsoft, and Google were building products and getting famous all over the world. But to really capture the attention they had to open up to the developers & inventors and get on their good side.Companies made several APIs and SDKs (packages software developers use) public for developers to do amazing stuff with their products. For example; Google with Google Analytics and Adwords for their website owners. Yahoo being a website directory never opened itself for web developers or business owners, or get the developers on its side.

The Mail

Yahoo Mail was one of the most popular mailing service once, but what was the reason of its declination? SPAM policies may be? User experience was pretty much same, they didn’t bring enough changes and soon enough. I don’t know for sure what was the cause of declination of Yahoo mail but they could have done a lot better with this.

The Business Development

Must be an aggressive investor! Why didn’t they bring something like hangout? Why did they acquire Tumblr instead of other options? Why didn’t they launched or acquired any other social product instead? Despite being pioneers of the industry why didn’t they have (any or much) patented ideas or products?

Old is Gold — Or not?

I think they really failed to figure out what was the industry trend by 2010, they failed to figure out their targets and vision of what they were actually trying to be? I have seen companies like Google, Microsoft, Amazon and Apple don’t feel shy for acquiring completely different business and opening up a business space for completely different domain. Such as Amazon, who would have thought it would be a biggest cloud service provider one day? Who would have thought Microsoft will acquire Linkedin?

Fact: Yahoo was once 125$ billion company in 2000.

What I think went wrong?

Why did Yahoo fail? Simple because Yahoo probably did all the mistakes other startups are doing every day and didn’t learn from their mistakes. So Yahoo didn’t learn how to reinvent products, how to do great product launches, make a loyal fan base, and how to keep improving what you currently have based on customer feedback.

Yahoo should have realized if they would have analyzed the data they had by 2004 that no one actually wants website directory if they have to explore it manually most of the time and find a lot of garbage links are well, considering Google had figured out the problem by the time.

Why Verizon acquired Yahoo? Because it had acquired AOL a year ago and thought it could do something by merging the data and content of the both products. Data is the key and that I believe was the only reason someone invested $4.8 billion in Yahoo, otherwise the mistakes they had done would have put them in a never opening sea shell.

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Thanks to Umar Ayub for helping me putting up this article. Umar Ayub is one of my best friends, a great programmer, personality. So do follow him to keep reading such thought provoking stories more from him.

Don’t forget to follow me as well ;)