Yahoo: 'Everything But The Kitchen Sink' Approach Not Paying Dividends
There's been a lot of hand wringing in the media over the weekend about Yahoo's rejection of Microsoft's takeover bid. Most of the coverage has focused on the (very serious) financial and people issues that Yahoo! CEO Jerry Yang is now facing. But let's turn some attention to Yahoo's product line for a moment. How will that be affected? Remember the Peanut Butter Manifesto? Or Jerry Yang's 100 days of strategic planning? Both aimed to create a more streamlined and focused product range. Yet nearly a year later, it's still 'everything but the kitchen sink'. And the shareholders are pissed.
According to comScore, Yahoo recently slipped from the number 1 spot in the list of top Web properties in the US. In April 2008 Google became number 1 for the first time [although interesting to note that if AOL was combined with Time Warner, as it appeared to be in 2007, they would be number 1 UPDATE: a couple of commenters pointed out that it is Unique Visitors and so there'd be some overlap if AOL and TW were combined; so they wouldn't be #1]:
One year ago, you can see that Yahoo had a reasonably healthy lead:
comScore's CEO noted that Google took the top property position "thanks to continued search growth and rapid growth at YouTube". We knew search was causing Yahoo (and Microsoft) major grief in website growth, but interesting that Google's 07 acquisition YouTube is also contributing to Yahoo's woes.
The Core Yahoo Products
In July last year we identified what we considered to be the Top 10 Yahoo! Properties:
- Yahoo News
- Answers
- Flickr
- Pipes
- Yahoo Mail
- Messenger
- Yahoo Music
- del.icio.us
- Yahoo Mobile
- My Yahoo
Those were our picks almost a year ago of Yahoo's top products. To be frank, not a lot has changed since then - and perhaps that's half the problem. There have been incremental improvements in all of them, and products like MyBlogLog and Buzz are showing healthy growth. But none has become a runaway success, like YouTube has for Google.
Not Enough Focus?
Is the problem that Yahoo just isn't focusing enough on those core products? Sean Percival has a great post, in which he points to Yahoo's Everything list -- a giant list of products that Yahoo owns. Sean has 18 suggestions to "fix" Yahoo, most of them involving nixing a product.
Here is Sean's list of products that he thinks Yahoo should review (along with his comments):
360: The social network that never was. Lose it, integrate interesting features directly into the Yahoo profile system.
Answers: One of the few great new services to come out of Yahoo recently. Introduce more moderators and integrate some of the Yahoo Answers content into search.
Bix: This service rates videos in a “hot or not” format. Seems pretty useless, lose it.
Bookmarks: Why have multiple services performing the same task? Lose it and shift users to del.icio.us.
Buzz: Another of the great products to come down the pipe recently. Keep growing this, include buzzed content in search results.
del.icio.us: Have you forgot about this one? It’s the best book marketing service around and you’ve barely taken it for a spin since you bought it. Release the redesign already, expand usage of del.icio.us content into search results.
DSL/Dialup: Why do you still continue to offer this service? I think by now, most consumers look to their local cable providers before thinking of Yahoo for their net connection. Lose it.
Flickr: Hard to complain about anything here, continue to push visitors to the service when possible.
Geocities: Geocities is some what of joke throughout the collective conscience of Internet users. I’m sorry, you didn’t know? Well it is, lose it.
Green: Continue to grow vertical properties like this. Reach out to other websites (even search engines) for syndication.
Jumpcut: You have yet another video/photo service? I’ve never even heard of this one. It does offer some interesting remix features. Yank these out for use on Flickr video, toss out the rest.
Mobile: Keep pushing mobile, you have tons of great services here many don’t know about. Lean heavy towards the iPhone.
omg!: Celebrity gossip, others do this much better than you. Toss this crap out and better syndicate this type of vertical content. Look at sites like WeSmirch for inspiration.
Search: The main piece, the historic yet falling search box. I don’t think there is any easy fix here. Google does advertising much better than you so let them. If they want to show search results here, I would also say let them. Look at what you do well and do a better job of integrating this content into search.
Search Marketing: Not really sure why you offer this or even label it as such. I’ve dealt with your “Search Marketing” division. It seems when you sign up for some credit cards or open a business license you get a call from them. They are annoying, pushy salesmen spewing BS. Fire the telemarketers first and shut the rest down.
Upcoming: Another good acquisition that doesn’t seem to get much love. I’m not sure what can be improved here or than integration with Flickr and search.
Video: Your third of fourth video service, is this one profitable? If not cut it lose and focus your users to Flickr video.
Web Hosting: Another service that seems odd for such a company. Is it widely profitable? I ran a small web hosting business and it was a pain in the ass. Tons of low paying and low tech customers sounds like a resource nightmare to me.
Great list Sean and I don't think many would quibble with your selections. Yahoo seriously needs to clean out its kitchen.
Having said that, I don't think breadth of services is all of the problem. A big factor is that Yahoo hasn't managed to get a 'hit the ball out of the park' success in several key markets: they failed to compete with Facebook in social networking, haven't been able to match YouTube in online video, haven't gotten much mindshare in Mobile thanks to Apple's iPhone, and of course they have fallen hopelessly behind in search. So as well as too many properties, they have been unlucky (mixed with bad management) that they haven't managed to get a winner in any of the key markets over the past few years.
Conclusion
Yahoo's key properties remain yahoo.com, email, myyahoo, and even Answers can be considered special. In short, content is what continues to drive Yahoo and those core properties are still enormously popular. It's just a shame Yahoo got bumped out of the way in social networking and online video -- two high growth content segments in recent times.
Now that Yahoo has virtually given up the game in search, and has spurned Microsoft's advances, it really is difficult to see how Yahoo can turn their fortunes around. They can start by optimizing their 'everything' list and try to leverage their core content properties more smartly -- and Yahoo Buzz is a good example of that, as is Answers and the recent
SearchMonkey. To have any chance at all, Yahoo needs to focus on and strengthen core properties like yahoo.com. It's a big big ask, especially with super-grumpy shareholders on Jerry Yang's back
Research By "Salman Mansoor"
