Some might say Yahoo had run its course. Others might say it was theirs to lose. The investment in Tumblr, for example, is worth 1/3 of what the company paid for it -- so, a $600 million booboo. How much of more can a company take?
But let’s go back to the beginning. When it all started, it was called a “portal.” If you wanted content, you almost had to talk to Yahoo first. Crazy, right? Yahoo made the concept of an Internet portal real in the minds of consumers. That was seminal.
However, it was a flawed concept to begin with. The idea of a “doorway” to the Internet is a conceptual lie -- flawed because, as we all know now, the Web is flat. Even after Google popped the portal balloon, portals continued as content networks, search engines, and publishers, too. But the idea of a doorway to the Internet was an illusion.
Yahoo came along in the mid-‘90s and handed us, as a gift, what is now the conventional paradigm: There was stuff out there. Further, once you understand that you can see any content, it’s a small hop to the idea that anyone can see your content. The very concept of Web connectivity and Web sites came to life with Yahoo.
Working for a buyer at the time, I viewed Yahoo as a great way to get ads in front of the right people at scale. The company made the Internet safe for large advertisers. Its salespeople were smart and buttoned-up. Our little band of Internet marketing rebels was somehow legitimized by the presence of a substantial enterprise in the space.
Soon, though, problems emerged.
Within months of Google’s beta launch, a guy came to my desk, showed me Google, and then invoked Yahoo. Yahoo was so full of advertising it hardly loaded! He said: “Tell me again why I would ever go to Yahoo,” and walked away.
In fact, with Web-distributed content, winner does take all. Who, after all, would ever go to the second-best search engine on purpose, or the second-best financial site?
From that moment on, I assumed that Yahoo was toast. It made me “wrong.”
Along the way, Yahoo brought cool technologies into the limelight (photo-sharing, exchanges, search, to name a few) -- but, too often, somebody else made a cheaper or better version.
With huge momentum, Yahoo could have done anything, but it was hamstrung by the innovators’ dilemma.
The streets of Sunnyvale are strewn with the remains of companies that were not willing to reinvent themselves. Yet, Yahoo is not dead. It is fast becoming an anachronism: a high-flying flea market for digital advertising, weighed down by the baggage of over 100 acquisitions made since its inception.
Lack of focus has been offered as a diagnosis, but you can assign blame from a list of the usual suspects. Hubris, check. Discounting consumer need, check. Failing to take the right big bet, check.
What happened? It’s a deep subject, but I can’t shake the feeling it was really something simple, and fundamental.
Somehow, along the way, the Yahoo! in Yahoo disappeared: the energy.
The purple equity color seems staid now. Even the vivacious Marissa Mayer looks tired in her newsreel. Will Verizon part it out (like a junk car), or make the hard choices required to focus all that talent and technology? Time -- or Tim -- will tell, but either way, I hope they get their Yahoo! back.