Having not worked at Yahoo in a bit over a year, it's interesting, amusing, and frustrating to watch what's going on over there. Some of their moves confirm feelings I've had for some time, while others are more puzzling.

The Search deal with Microsoft was basically inevitable. You could see even two years ago how out-gunned Yahoo was compared to Google and to what Microsoft was rumored to be thinking of doing. Based on what I knew, Yahoo was spending less than 20% of the money on search that Google was and they were trying to do the same worth with about 1/10th the hardware and less mature infrastructure software. Meanwhile, the web kept growing and became more and more real-time.

It seems that Yahoo wants to sell Zimbra. I remember when that acquisition happened. I thought it was cool technology and would be great if we actually wanted to compete in the on-line "office suite" market (or whatever), but that never happened. Instead it remained as one of those "enterprise" products that Yahoo has a history of trying and failing at. Remember Yahoo's enterprise instant messaging product? FAIL.

Now comes news that Yahoo wants to sell Small Business which includes their web hosting and domain registration businesses. This makes good sense to me. While it's a business that I think has usually made money, it simply wasn't competitive in a day and age when you can get a full virtual machine, storage, and bandwidth from any number of vendors who aren't scared to offer good remote access (ssh anyone?) to the server: Slicehost, Rackspace, Server Beach, Amazon, and so many others. Yahoo's offering may have made sense back in the year 2000 or so when it really competed on price, but this is one of those race-to-the-bottom commodity business and has been for years.

People picking on Carol for selling some stock recently? Well that's just dumb. Yahoo is a public company and she really didn't sell that much.

I hope that Carol is able to trim the parts of Yahoo that no longer make sense and help bring some focus to the company. I really do. But to be honest, I've seen it before. Terry Semel tried to do something similar when he came on board. But that was a wandering effort that ultimate lacked focus and wasn't ambitious or forward-thinking enough.

Jerry and Sue tried this when Terry left, but I really think they were too "Yahoo" to transform Yahoo into what it needs to be.

I see how Carol is trying to be smart on the business side, but I'm not sure how Yahoo plans to wow its users. And coming from the Yahoo! Developer Network, I wonder if Yahoo will ever get serious about outside developers. Conferences and Hack Days are great, but I suspect they still haven't figured out how to offer buisness-class APIs (with an exchange of money and an SLA). Aside from YUI and Hadoop, can you really go beyond a prototype with this stuff?

It could simply be that I never really drank the YOS/YAP kool-aid and never will get it.

Oh, and what about those smaller startups? Should I start to worry that del.icio.us or Flickr is going to go away? What about Upcoming? When their founders start to worry, I feel like I should too. At least Flickr has a business model and appears to still be kicking some ass. MyBlogLog has all but died on the vine, right? Is there anyone left of the original team of 5 or 6 engineers still working on it? No, I think it fell victim to Yahoo's larger social strategy. FAIL.

I hope that Carol can be clear, focused, and agressive in re-shaping Yahoo. The half-measures attempted over the last few years simply haven't been enough and never will be.

Posted by jzawodn at September 22, 2009 07:06 AM

Reader Comments
# Jeff O'Connor said:

Thanks for a frank and honest assessment from an insider's perspective.

As a long-time Yahoo! cheerleader, I'm disheartened but grateful for your take.

I dislike Google for a lot of reasons, primarily because of the breadth and depth of their control over access to information and their recent capitulation to Canada (of all places) in favor of end-user privacy.

Microsoft's offerings leave me cold because they're disjointed. While they're just as functional as Yahoo! and Google's offerings, they're not very intuitive and don't mesh (excuse the pun) very well.

So, I stick it out with Yahoo! in the hopes they'll get their act together. But as a recent Palm Pre owner, I'm increasingly inclined to make the jump from Yahoo! to Google just because it would make my life easier, and in that spirit I would take all my toys with me - my bookmarks, my photos, etc.

I hope it doesn't come to that, but it really hinges on what Yahoo! does - or doesn't do - not necessarily what I would prefer.

on September 22, 2009 07:52 AM
# Micah Sittig said:

> I dislike Google for a lot of reasons, primarily because of
> the breadth and depth of their control over access to
> information and their recent capitulation to Canada (of all
> places) in favor of end-user privacy.

There are lot of ways to export your data from Google, or to turn off tracking, or to not give them your data at all. I don't see how they are any more invasive than Yahoo.

Also, if you think Google is bad in Canada, search around for what Yahoo did in China/HK. For it's scale I'd say Google is doing well on the ethics front.

So, at least the reasons you give are discounted a bit. Add to that how Yahoo took great startups and then mangled them/left them for dead (del.icio.us/Upcoming), and there are very few reasons to continue supporting Yahoo.

on September 22, 2009 08:26 AM
# Print Postcards | Louise said:

I actually feel sad about Yahoo's failure. I've always believed that it is a strong site. But the services just failed face flat. Hopefully this partnership with Microsoft will turn out good.

on September 23, 2009 11:09 PM
# Jistanidiot said:

Yahoo needs to go back to what it use to be, an organized catalog of the Internet. They don't even have the directory on their front page any more (at least I can't find it).

You're not going to beat google at the search engine business. The other offerings on Yahoo's front page all look like knock-offs of AOL's portal (it has been quite a while since I've seen AOL's portal).

What Yahoo did/does right:

Flickr (it is staying ahead of imageshack and others so far)
Games (until that awful "upgrade" to their Chess interface)
Mail (until this new attempt to look more like Outlook)

The rest of the stuff they offer might be good but there are better things out there. For example, Yahoo Finance. It's actually great. Only problem is anyone who cares gets the same info and service from ameritrade or whoever their online broker is.

Also too bad they killed geocities.

on September 24, 2009 01:29 PM
# office supplies | Terry said:

I have recently switched rom google to yahoo mainly for pay per click campaigns and making money however, hopefully yahoo will become a better and more responsible business.

on September 24, 2009 07:19 PM
# Jason Scott said:

Yahoo has successfully made itself the Wang of online sites. In five years, I doubt people will remember the services, outward-facing open-content chest-pounding, and positive regard it once sort of held.

The callousness with which Yahoo has destroyed old content, old sites, long-functioning services, has been appalling. I wouldn't trust them to hold a bag of sweets for me while I fetch my lemonade.

on September 24, 2009 09:08 PM
# Joe Hunkins said:

A very insightful post here Jeremy and I hope it finds its way to Bartz' desk. One of the things that made your blog so interesting back in your Yahoo days was that although you stayed loyal to Yahoo you didn't gloss over problems the way many folks tend to do when writing for their team. I think you're offering some real insight into why Yahoo struggled in the past even with excellent technologies and applications and a huge online footprint.

As a YHOO shareholder I have to admit my main concern is share price more than anything else, but I don't think the needs of the internet at large or Yahoo employees should diverge much from the needs of the shareholders. In fact I'd argue that the past assumption that management understood the whole show better than the shareholders was very mistaken. We'll all be very lucky to see Yahoo shares ever hit the price MS would have paid a few years back.

on September 25, 2009 10:46 AM
# said:

Why does Yahoo mail fail so often in IE and not in Firefox?

on October 29, 2009 08:38 AM
# ZXT said:

Remember they acquired Geocities for record breaking amount back in the 90's and they didn't do anyting with it and fail to capitalize with millions of Geocities users. They just shut it down last month because its costing them too much to maintain it.

on November 18, 2009 12:50 PM
# Don said:

The transformation I saw in Yahoo in the last days made me wonder whether this distinct service provider was trying to copy other services just to stay on in the market or whether it was a more unique step which I as yet could not get !
Google with its top niche and 'that' distinct essence is everybody's envy and to even attempt going the google way is really a big step for anyone out there.
The new layout yahoo made me recall another service provider site which I had visited last days, " in.com". This site provides a lot in a lot simple way and I liked their presentation and uniqueness.
When I saw the same attempts at yahoo I could not help thinking about the possible 'inspiration' yahoo might have taken.
Yahoo is good but to be something like google is a bit too big dream if yahoo has a timeline attached to this dream !

on December 11, 2009 03:00 AM
# buy r4 dsi said:

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on January 18, 2010 02:08 AM
# Rapidshare SE said:

Thanks for information. I haven't any idea that Yahoo has such problems. But still I like this search engine. Sometimes Yahoo gives more results than Google. Though knowing this information I can hardly believe that it is really so.

on February 21, 2010 06:26 AM
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