Yahoo's strategy has come full circle - and that's not a good thing

Yahoo's strategy has come full circle - and that's not a good thing

A few days ago I read a long breakdown on Yahoo - “What Happened When Marissa Mayer Tried to be Steve Jobs”, by Nicholas Carlson. Some of you may have read it too; it’s a really good writeup. I feel the title was clickbait, though. Marisa Mayer wasn’t trying to be Steve Jobs any more than any other CEO who was brought in to fix an ailing company. The parallel is loose, at best.

So if Mayer trying to be Jobs isn’t the root of Yahoo’s continuing problems these last few years, what is? A fine question. Succinctly, I would say it is (a) failing to pick a good market positioning for the Yahoo reboot and (b) failing to stick to that plan anyway.

Think about Yahoo’s recent history. Carlson sums it up pretty well. They started out working on a simple goal - categorize all the crazy stuff on the internet and make it accessible. A listing evolved into a search engine, which evolved into an “all your needs in one” web portal. But all that changed when other companies improved on different parts of their offering. Suddenly you could get better search and mail over at Google, better news over at CNN.com, better social over at Facebook, etc. Yahoo had become a jack of all trades, master of none, and their business was suffering for it.

So to make a long story short, Mayer comes along and tries for a reboot. For Yahoo, this is the opportunity to choose a new, focused strategy. Instead of losing on a variety of fronts, you can pick one battle, marshal your forces, and win. But the angle Mayer chose was very close to where Yahoo had already come from (and lost!) - “the best web experience.” Except this time, the arena was the new mobile web. And so Yahoo debuted a round of apps targeting the things users do most on the smartphones.

Immediately this seems like a rough idea. As I said, this is basically the same losing battle Yahoo was already fighting. When you’re trying to be the best at a wide variety of things, you’re not making any tradeoffs. When you’re not making any tradeoffs, somebody else probably is - and they’re able to offer a more competitive product for that market than you. Additionally, Mayer was choosing to attack a fortified hill. After all, Apple and Google had crafted the mobile experience from the ground up - it is their operating systems the phones are running, and their apps the phones come with by default! Trying to get users to move over to Yahoo apps instead…that is running uphill into the guns.

To make matters worse, Mayer didn’t seem to focus in on this new strategy. Carlson’s article describes an increasing focus on generating and hosting new upscale media content. Now you’re straddling multiple, very different opportunities. You’re probably not knocking any of them out of the park, and you’re probably not aligning your company’s intangibles (manpower, culture, monetization strategy) around a focused goal.

It’s no surprise that Yahoo’s revenues are failing to respond to these new activities. I would love to see Yahoo focused around one sound strategy/market positioning, and one that’s not a fortified hill. I think that is what needs to happen if Yahoo wants to be relevant again, as opposed to being content with old age (and revenue stagnation). What would that look like? I’m not immediately sure. The internet is a crowded place these days; it’s hard to pick a problem to solve that doesn’t half have a dozen more established outfits working on it as well. I’m going to keep thinking on it - maybe I’ll update this note when I come up with something. 

EE101

EE101