Carol Bartz was ousted as Yahoo's CEO this week. Many in the industry are asking, "What took so long?" In reality the decline of Yahoo's business pre-dated Bartz's tenure at Yahoo but she did little to stem the tide. Digital marketing spend is growing by double digit percentages in 2011 while Yahoo's market share is declining by a double digit percentage. The executive shuffling at Yahoo has descended into dark comedy, with Bartz calling Yahoo's board of directors "doofuses" (which is an insult to doofuses everywhere) and is refusing to step down from the board herself. All of this is very sad for a once proud company that still has significant assets.
What can Yahoo do to right the ship -- and what can search marketers learn from Yahoo's trials?
1) Embrace technological change and innovation. Innovation needs to be at the core of every business, but especially digital marketing businesses. Digital marketing is as much analytical and technical in nature as it is creative -- and your adoption of new technologies need to keep pace with the industry. Yahoo has fallen continually behind in innovation in the last decade, would buy businesses to try to catch up, and then not be able to take the innovative culture of their acquisitions into their core business. Make innovation a core tenet of your business and don't fall into Yahoo's trap.
2) Be nimble. No matter how innovative you are this fast-paced industry will evolve in unexpected ways. This is an opportunity, not a threat, as long as your business can change directions as quickly as needed. Yahoo has been anything but nimble in recent years. Be able to change your business model when needed and don't be afraid to do so. In fact, in digital marketing continuous change should be norm and not the exception.
3) Invest across multiple marketing channels. This is pretty straightforward. Every business needs to have a portfolio of complementary products to provide their clients. Yahoo did invest (poorly) in search and display, but has largely ignored social and mobile, which are the next big growth areas. Are you being innovative in search and display, while also investing in social and mobile? If not, you should.
4) Be entrepreneurial. There are several key tenets to classic entrepreneurism. As a company you should reward trying new things, not punish failures but learn from them, incent everyone to think like an owner, invest for the future and don't milk the status quo. I imagine that Yahoo broke all the rules above. While it is harder to change a culture than create one, business cultures can be changed. A change of leadership is the best time to do this for Yahoo. Is your business as entrepreneurial as it needs to be?
I think I speak for most in the industry when I say that I am rooting for Yahoo to succeed. Since they are in the digital marketing space, their lessons for search marketers are particularly relevant for all of us.