Article Information from the Field of Master Mind Articles (MMA)
Shared from the desk of: Joseph Mercado
Author of Article: Pat McCarthy
To: Entrepreneur
Blog Post #647
Re: What Went Wrong with Yahoo?
Date and Time: Tuesday, April 30, 2019 at 12:17 a.m.
Dear Entrepreneur,
There is no one single reason that Yahoo “went wrong”, which I assume means that they aren’t seen as one of the top couple of internet companies like they once were.
There are product reasons, strategic reasons, and cultural reasons. Some top of mind examples though:
- Focusing so much for years on Panama (Google Adwords competitor) and search in general, when they ended up losing to Google and eventually outsourcing this to Microsoft.
- Becoming too unfocused. Yahoo tried to do everything and triggered the famous Peanut Butter Manifesto from Brad Garlinghouse that summarized this problem well.
- The shift from a desktop world where everyone used home pages to a mobile and social world. Yahoo failed to build their own successful mobile and social products or to acquire any. Yahoo got too bloated, and nobody would ever make the cuts needed to both headcount and its products/properties.
- Buying Flickr, then letting it languish. Buying Flickr for $35 million was a bargain when you see how huge social photos are today. They could have turned Flickr into the next Facebook or Instagram and instead didn’t invest properly in it.
- Failing to acquire Google and then Facebook. Yahoo had opportunities to buy both of these companies when it was clear they were going to be big successes and instead wouldn’t pay what was needed. For example, they had a deal to buy Facebook for $1.1 billion pretty much accepted, then Yahoo’s earnings came out and the value of the deal dropped to 800M due to stock compensation and Zuckerberg balked when Yahoo wouldn’t change the deal to put the price back up. Think about the value of Facebook today and that Yahoo didn’t acquire them over a $300M difference.
- Leadership changes. Looking at companies like Google and Facebook you’ll see that the same leadership has essentially been in place the whole time. Yahoo has had a shifting cast of CEOs and executive teams that has never provided a longer term vision and execution path to take shape.
- Acceptance of lower quality employees. By the time I worked at Yahoo from 2007-2010, there were still a ton of great A-quality people there, but there were also a lot of B or C-quality people who were not outstanding at their work. This starts to eat away at the company and make the A-players go work elsewhere.
There are more reasons, but these provide a good summary…
To Your Success,
Pat McCarthy
Article Writer
Former Yahoo Employee
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