So, between the brain drain and the potential long-term down sides of its advertising deal with Google, has Yahoo let itself in for a future in which it is hardly more than a mindless shell? Anyone who thinks that doesn’t realize what Yahoo still has going for it. Danny Sullivan pointed out Yahoo’s many assets in a recent post on Search Engine Land. These include the following:
Profitability. According to SEMPO, 70 percent of advertisers buy through Yahoo’s Panama paid search system. Compare that to the 50 percent who use Microsoft’s system, and suddenly we see one reason why the software giant originally wanted to buy the search engine.
Search Share. Sure, Google is dominant, but Yahoo easily out competes Microsoft for the number two spot.
Great Properties. Yahoo Finance. Flickr. Yahoo Answers. Del.icio.us. Yahoo Mail. Yahoo News. Yahoo Search. And let’s not forget one of the newest features, Yahoo Buzz. Every single one of these properties boasts plenty of users and brand recognition as a strong offering in its niche.
Brand recognition. This time, I’m not talking about the properties; I mean the Yahoo brand in general. Quick, name Microsoft’s search engine. Is it MSN or Live? Or Microsoft Live? Or MSN Live? Sure, ask a professional SEO and they can tell you, but what about the general public?
After noting these good points, Sullivan observed that Yahoo faces three challenges: the outstanding success of Google, the desperation of Microsoft as it flounders around in a distant third position after a decade of trying, and bad leadership in the form of former CEO Terry Semel and the decision to own content. Sullivan concedes that Yang’s leadership over the past year is also at fault.
So how can Yahoo solve its problems? Well, the latest reorganization, announced at the same time as the new spate of executive leave-taking hit the media, is supposed to be more than a mere reshuffling this time. That might help. Sullivan thinks the company needs to refocus and get back to what made it great: search. “That means robbing Google,” he observed. “I mean since Google and Yahoo are all buddy-buddy again, it’s not even like treason!” He even suggested spinning off Yahoo’s search property and turning it into a start-up again, to try to recapture some of the magic and energy.
Would that work? It sounds very much like a corporate version of trying to find a phoenix and help it rise from the ashes. It might not take something this extreme to reinvigorate Yahoo, but lesser approaches seem not to have worked. How far will Yahoo go? There's no telling, but either way, we will see what emerges from the fire this time.
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