Search Marketing


What YHOO has to do to Compete and Grow

Thu Oct 18, 2007 8:55 pm
Comments: 0 Views: 262
As Yahoo's earnings report was better than expected for the 3rd quarter of 2007, they have yet to regain their status as a real online leader. Even though they remain the top web property (in total visits per month across their various sites), their new management team, headed by new CEO and co-founder Jerry Yang, has a great deal to do to define itself going forward.

As illustrated by Mr. Yang's first few months as CEO, he seems to be attempting to guide, and just slightly revise their focus. To date no major changes have taken place. No major cuts in staff, or any indication that divisions may be sold-off or re-focused.

Reports are that their search project (Panama) is going well, yet drastic changes have yet to be made to Yahoo's increasing costs and relatively slow growth.

Investors tend to make comparisons with Google, but considering Google makes a huge majority of its revenue from its Adwords and Adsense program, Yahoo does not see the same growth in revenue from its advertising program.

Clean up its Offerings

One of the major operational problems with Yahoo is that its various services are not really integrated. With its acquisitions over the last few years, and most of those services unfocused and disconnected, they have yet to reap the growth those purchases may have promised.

As any user is aware of, not only is the Yahoo homepage still focusing on the web 1.0 portal concept, but their myriad services and disconnected login situation make their services difficult to use.

Yahoo, as it stands now is not a competitor to Google.

Intangible Qualities

Perhaps because of their size, of their number of years as a public company, Yahoo has yet to regain their status as a company that can move quickly and develop ideas internally. With its recent dependence on second-hand acquisitions, whereas Google has moved boldly in its attempt to acquire what it believes are quality first-tier companies, Yahoo is seen to be a slow mover. Last years unsuccessful talks with Facebook are a testament to its inability to pull the trigger and spend the money necessary to develop its business in a given direction.

Whether or not the Facebook deal would have been a good direction for Yahoo, it shows that they were not able to make the sort of move that would drive them in a specific direction. With too much history, a company can begin to look at its past mistakes and inadvertently become shy and restrictive with its future position.

Looking at Yahoo's past acquisitions of flickr, geocities and a litany of others, one might ask what they have done right. Google's business is built on advertising, Yahoo is more like a publisher itself, rather that an advertising medium. Which is why there were many rumors earlier this year that they would actually be a publisher and distribute Google ads.

To compete with Google and regain its position atop the web world they have a lot to clean up. Looking over its array of service offerings one can become quickly confused. They seem to sell a variety of unfocused and unconnected services. If it is a media company, which would make it a publishing company, then given its visitor reach and target market they are not in competition with Google.

But if Yahoo seriously can pull together its version of Adsense (Yahoo Publisher Network), then perhaps its growth will dramatically increase. Currently they are growing far slower than Google.

It seems investors at this point would like to see revenue growth. Even if net income growth is down, it is likely that investors would be anxious to see the investment needed to pull together it services and increase its publishing system.

If Mr. Yang can bring into focus what they are, and were, there seems to be little that could derail them. Given their resources, talent and experience they should easily come back from their multi-year slump.

URL: http: (ex.
Math (28 + 3)
* required

© 2019 Christonium LLC
Terms of Use