Is Yahoo Even Worth Trying To Save?

Is there any reason to save Yahoo? I say no. 

What does Yahoo do? What is Yahoo for? What is Yahoo great at? What is Yahoo even good at? 

Yahoo does not have the best technology, nor the best content. Yahoo does not have the best users, nor the most. Yahoo is close to irrelevant on mobile — the future of computing — and has flubbed every effort to be social.

Yahoo is the Detroit of web properties. Once big, once thriving, it helped create a future it can never be part of. It’s only hope, in my view, is to whither away, quickly, so maybe a few worthy pieces can find life in the wild.

While the tech blogosphere was in a tizzy last week, some outraged, most envious over the firing and massive golden parachute that Yahoo’s Henrique de Castro received, they missed the larger story: de Castro was not the “dead man walking.”  Yahoo is the dead man walking. Gleeful rubbernecking by industry watchers won’t change the company’s fortunes.

Outraged that Yahoo dropped so much on an executive who failed at his job? Surprised that Yahoo paid so much for Tumblr? The desperate always pay too much. de Castro and Tumblr’s David Karp are, I suspect, only the first of many scavengers who will feast on Yahoo’s bones.  Indeed, there may be no better purpose for this company, sadly, than for the fortunate pleasure of a few lucky ones to fatten themselves up as they tear apart the company’s bloated flesh, devouring its cash and resources till all is gone. This makes Marissa Mayer’s reputed strategy of buying talent — at premium prices — tragically comical in its utter wrongness. Throwing good money atop bad, in tech, especially, is always a waste.

I am surprised, frankly, that this isn’t the prevailing view. Industry website TechCrunch recently stated:

Yahoo is a company remade. Under the guidance of Mayer, it has refocused its product vision, purchased talent at a rapid rate, and expanded its native content efforts.

Vision? Talent? Native content? For whom? Can you recall the last time you used Yahoo? Your colleagues? Spouse? Children? Parents? Is Yahoo where you would recommend anyone go to for breaking news, tech news, weather, apps, cloud services — for anything other than your sister wanting to check her horoscope?

Pop quiz!

What do you think of the person with a @yahoo.com email address?

Second question: do you know anyone who uses their Yahoo ID for any external site, app, or service?

Think of computing, the cloud, the web, apps, smartphones, tablets, PCs. You spend hours with these every single day. They are your work, your play, your means of connecting. You don’t want to be without them, not under any circumstance. Probably none of this activity, however, involves Yahoo. Yahoo is AOL without the dial tone.

Yet, despite this, Yahoo ($YHOO) has more than doubled in the past year.

$YHOO

Do not be fooled. This run-up is almost entirely due to Yahoo’s rather fortuitous stake in Alibaba (and Yahoo Japan). Yahoo’s present valuation is about $40 billion. Analysts estimate that Yahoo’s stake in Alibaba is worth about $36 billion, maybe more. Meaning, Yahoo as the world understands it is worth $4 billion.

Think of that. Yahoo mail, weather, finance…Flickr, Katie Couric, fantasy sports, David Pogue, display advertising…and every other Yahoo service and property — oh, and Tumblr — is worth no more than one SnapChat, and less than half a Dropbox. To spend any of the Alibaba largesse to re-remake or re-rebuild Yahoo is a vainglorious waste.

Yahoo is of such irrelevance, I am still not sure I should even write this column.

It’s not just that the various parts of Yahoo are so meaningless to so many, it’s that their sum is worth so much less. The fact is that everything Yahoo once did at least well and everything it has promised to do going forward is done far better by one or more capable companies. For free. Yahoo has been unbundled to death. It will never get put back together again.

Why choose Yahoo over Facebook, Twitter, Skype. Android? Google Search, Maps, Now? iOS. Siri. Pandora. YouTube. LinkedIn. Roku. Netflix. Foursqare. Yelp. Those digital stickers. Huffington Post. The list of what Yahoo should have been and now can never be is frightfully long.

The company doesn’t even have the benefit of control over its destiny. It is run by techies yet dependent upon the vagaries and cold calculus of Madison Avenue. It gets worse. Last month, Yahoo was forced to reveal its rather shocking reliance upon Microsoft:

Yahoo has revealed in a US Securities & Exchange Commission filing that nearly one-third of its revenue last quarter — 31% — came from its search deal with Microsoft, according to a Bloomberg report. That’s far higher than the “more than 10%” figure Yahoo previously acknowledged.

It gets still worse. Per Bloomberg: “Yahoo’s share of the U.S. digital-advertising market is estimated to shrink to 5 percent in 2015 from 5.8 percent last year, while Google and Facebook both may expand their shares, to 42 percent and 9 percent next year respectively.”

Their irrelevance is accelerating.

Yahoo’s mission is focused, perhaps laudable:

Yahoo is focused on making the world’s daily habits inspiring and entertaining – whether you’re searching the web, emailing friends, sharing photos with family, or simply checking the weather, sports scores or stock quotes.

Except, this simply is not realistic given Yahoo’s limited mobile-social-local strengths. Shut it down, sell it off. Once the Titanic has hit the iceberg, all that remains is to ensure as many get to safety as possible. 

Last week, Mayer emailed employees regarding the firing of Mr. de Castro. Her very first line:

The beginning of a new year always provides time for reflection.

Reflection is not necessary. Yahoo’s time has come.

Understand. I absolutely do not wish ill of anyone associated with Yahoo, certainly not the 12,000+ presently employed by the company. A native Detroiter, I witnessed first-hand what happens to people, to communities, when companies go under. In this instance, however, I believe Yahoo cannot be resuscitated. The longer the delay, the more the vultures will tear at the flesh, till even the very few parts worth saving are no more.

Published by

Brian S Hall

Brian S Hall writes about mobile devices, crowdsourced entertainment, and the integration of cars and computers. His work has been published with Macworld, CNBC, Wall Street Journal, ReadWrite and numerous others. Multiple columns have been cited as "must reads" by AllThingsD and Re/Code and he has been blacklisted by some of the top editors in the industry. Brian has been a guest on several radio programs and podcasts.

107 thoughts on “Is Yahoo Even Worth Trying To Save?”

  1. wasn’t the same said about Apple once? Not saying all companies can come back but how do you decide when to write off a company?

    1. Yes. And I am now on record for mocking if proven wrong.

      Confession: up until minutes before publishing this article I still considered *not* running this. As I note above, I have firsthand experience with companies going under and it can be truly devastating for many. But, I am not here to be pleasant and I believe the good parts of Yahoo will do better if liberated and I think most of the folks at Yahoo will have a brighter future if they go elsewhere. Sooner the better.

      1. One doesn’t need to kill the man in order to get rid a gangrene. You simply cut the sick member off. In this case the disease is NEO and the person spreading the disease if Mayer. Fire her before she ruin yahoo more. And if Yahoo is doing so well, then why are they having to force people to get Yahoo email addresses to sign into yahoo accounts? You know if you can’t GIVE AWAY a product you’re in real trouble.

  2. “Back where I come from, there are men who do nothing all day but good deeds. They are called phila-, er, er, philanth-er, yes, er, good-deed doers, and their hearts are no bigger than yours. But they have one thing you haven’t got – a testimonial.” -The Great and Powerful Wizard to the Tin Man (Wizard of Oz)

    Sounds like that should fix everything!

  3. To answer your question, I use Yahoo several times a day to check the weather (they’re the info provider for iOS’s built-in weather app) and to maintain a mailing list I started in the year 2000 (!). I could get along without the former, but I don’t know of a good free solution to take over the latter (and transitioning my less-than-tech-savvy mailing list members would not be fun).

    Indeed I can argue that I use Yahoo more than I use Microsoft; I’m a developer who doesn’t touch Office, and a heavy user of Mac OS X, iOS, and Linux. (Our company switched from Windows desktops to Macs in response to Vista.) Should I be arguing on the basis of my experience that Microsoft should be dismantled? 😉

    Also I am dubious (to put it mildly) about using a company’s stock value as the basis for arguing about anything except the Greater Fool Theory. Do the stock values of Apple, Google, and Amazon mean anything about their respective company’s health and prospects? Really?

    1. As someone who tries very hard to NOT use Google, I would hope that Bing and Yahoo will be around for a while. But then, I still support Sprint and T-Mobile, on principle.

  4. Yahoo is a direct competitor to Google in Internet Services, and that alone is good enough a reason for them to exist; if not we will have Google dominate the internet, which is always a recipe for disaster.

    1. Microsoft and Amazon are both considerably more effective competitors for web services than Yahoo.

      The only Yahoo services I would really miss are Flickr, which I still like despite its flaws, and Yahoo Finance, which is still the quickest way to get basic financial data on public companies.

      Neither of those is exactly irreplaceable.

      1. In the article you asked, “Can you recall the last time you used Yahoo? Your colleagues? Spouse? Children? Parents?” I can say without a doubt that I know more people who have used yahoo than have used bing.

        1. I wouldn’t use Bing if they paid me. But I don’t use Yahoo search either. Both spy on you. The only part of yahoo I care about is yahoo groups. Yahoo groups used to be a great workhorse. Wasn’t real pretty but it always did the job even for the computer novice. Mayer has ruined Yahoo Groups trying to turn it into something it isn’t. Just look at their “help” page. Thousands of problems that yahoo doesn’t even bother answering . Mayer needs to go.

  5. “Is there any reason to save Yahoo? I say no.”

    I agree. I am never a big fan of “saving” any company.

    “What does Yahoo do? What is Yahoo for? What is Yahoo great at? What is Yahoo even good at?”

    Exactly what every company should be able to answer. And should have a chance to answer.

    Weather and Yahoo finance are still regular stops for me. They used to be my first stop for news with my first cup of coffee until they reformatted their home page. I’m sure it helped someone, but it didn’t help me.

    I would hate to see it die off and I do hope they can make the fundamental changes needed to turn things around. Restructuring alone won’t save them any more than it will save Microsoft.

    Joe

    1. Yahoo wouldn’t’ need saving except for what Mayer has done. I would have gladly paid to have kept my groups on yahoo. I was willing to look at her stupid ads to keep yahoo groups but then she infected it with NEO which is one of the worst pieces of programing I’ve ever seen. My dog could have written a better program.

  6. I prefer and recommend Gmail, unless the person is not techy. Yahoo mail with its seemingly quaint portal entry is perfect for them while Gmail is forbidding. Whether or not that is resurrection grade strength, others are better qualified to comment, I suspect the age and gender demographic trends of Yahoo users, especially among Yahoo Mail users – might be telling – but to condemn or spite them for not being cool or hip enough is not gravely devastating, and framing de Castro’s banishment as a lessor scale ousting of Steve Jobs is hyperbolic, like much of this screed. Even so, and this the bitch with opinions, dude might be right; there’s just no way prove yay nor nay. BTW, ht to Brad Churos or something for the tweet pointing here

  7. My bad, I thought this article was about saving Google! Soft and fuzzy at one time I am now of the opinion Google has become something to be avoided.

    Brian, please write an article about saving Google from their evil ways…

    As to saving Yahoo? Meh…

    1. Such an article, if it lays it all out in an unbiased fashion, would be enlightening.
      An opinion piece, would also be interesting.

  8. People involved in tech may not use Yahoo but out is still common. A lot of people default to yahoo when they get bored and want to read the news/horoscope/weather.

    I say “default” because people don’t care where the best content is, they just want content. Yahoo is still the default for a lot of people.

  9. Well, I will say that Yahoo has made some pretty delightful apps since Marissa Mayer came in. The new Yahoo Digest app I happen to like a lot and use it twice a day when it sends me new “digests.”

    I can’t even pretend to know what Mayers’ grand vision is for remaking Yahoo. No one can outside of her executive team. But if things like Yahoo Digest are an indication, I’d say there’s certainly something there worth saving.

    Back in 1997 I’m pretty sure nobody would have predicted Steve Jobs was on a path to transform Apple from a niche computer company into a mass market consumer electronics/gadgets company. I think Michael Dell’s famous words about Apple come very close to your words about Yahoo. All I know, is they are a presence (even if a small one) that helps keep Google from being the sole arbiter of online services and user data. Even if they help keep Google at bay for 5% of the market, I’d say thats still better than nothing. Yes, Microsoft is also there, but they’re a large Goliath just like Google.

  10. I agree, the many apps created now are taking advantage of 400 Million mobile monthly users (out of 800M total monthly users). Numbers that are now trending higher than Google for the first time in a long time (ComScore). Yahoo Screen, Weather, Tech Digest, Finance, Mail, Flickr (1TB of photos!) Yahoo Tech and Food are just some of the daily apps I visit and I like the new Mail App (so do iOS users giving it 4.5 out of 5 stars). Yahoo provides Weather and Stock content for iOS and they are credited as such in iOS.

    Lest I forget Tumblr, Yahoo just added their ad platform there, I use that regularly as well.

    Also the $40B valuation is not correct, if you have Alibaba at $36B, Yahoo Core at $4B then you are missing $12B of Yahoo Japan. So $52B should be the logical valuation and the market cap is currently at $40B.

    I work in tech, with cutting edge hardware and use a Yahoo email address.

    1. If you are using that Yahoo email address than I suspect your colleagues have noticed — and not for the better. FWIW.

      At this writing, Yahoo’s valuation is $40.6 billion. The minimum I’ve seen for their Alibaba investment over the past month is $36 billion, thus I only mentioned the Yahoo Japan investment in passing as it would have made everything else “Yahoo” worth less than zero. Of course, as investors begin to clue into the true value of Alibaba and Yahoo Japan, we may indeed see a quick run-up in the $YHOO valuation. However, per my point above, it will be due to those outside investments and cash on hand and not because of their ‘core assets’.

      1. But have you no belief that say with Alibaba shares worth $36B+ and Yahoo can’t capitalize with $10-15B extra cash in the short term? There is no goodwill in there for these purchased startups and advances they are making with mobile technology and a new ad platform? And additional purchases (AOL was the rumored purchase last week) won’t help make this company worthwhile to the 800 million monthly users?

        I use the Yahoo email address as a personal email address, of course our company has its own email @address. There are several who also use Yahoo for personal addresses. I am in the media and entertainment industry and see many people using both Yahoo and Gmail addresses. Are there really any others (I guess Outlook is the other primary one)….

        1. I really won’t be upset if I am proven completely wrong. But…I still find almost nothing of value with Yahoo. I think they have a few assets (potentially Flickr), that could really become much more valuable if liberated from the company. Having all the desktop page views is certainly better than nothing, though nearing the halfway point of the second decade of the 21st century, I think it’s usefulness as a metric of future success is extremely limited.

          1. Right — and this is what happens occasionally. A journalist or blog writer with a fair amount of reach and a somewhat analytical mind will put together a loose string of facts to support his or her opinion about a struggling tech company (AOL, Yahoo, Microsoft, Sony, etc.). Sometimes it’s done to get PVs, sometimes it’s done in the hope of “shaking up” the industry. Was it done here to point out that assets like Flickr would do much better out from under the yahoo wet blanket?

          2. Sure, but this gets back to the initial questions at the beginning of the article:

            “What does Yahoo do? What is Yahoo for? What is Yahoo great at? What is Yahoo even good at?”

            What do you think would be Yahoo’s elevator pitch? If they showed up on Shark Tank would they have anything to entice one of the Sharks or would they end up with everyone saying “Because you have no clear idea why you exist as a business, I’m out”? Page views are great for bloggers and online journalists. Is that enough for Yahoo?

            Joe

          3. What is Yahoo good for? I use the News Digest app on my phone. I use Yahoo Weather on my phone (and none other). I use Yahoo groups for several hobby-related discussion groups. And that doesn’t include Tumblr and Flickr. The article says Yahoo isn’t in Mobile, but I have two apps I use daily. This is, at least, a beginning. Will Yahoo survive? Is Yahoo “worthy” of surviving? I don’t really know, but I do know I use their services, and I’ve seen nothing but improvement in the past year. Time will tell. The question is, will the author of this post publicly eat his words if he’s wrong?

            Why not ask if Microsoft is worth saving? IMO, they are far worse off than Yahoo.

          4. Look, I hope you are right. As it is now, as others have pointed out, there is nothing unique about what Yahoo is providing. As a business, I’m not totally sure why they exist. Most of what I like about Yahoo is based on sentiment, not necessity.

            As for MIcrosoft, I think the writers here have already been asking that question, too.

            Joe

          5. You must not know anything at all about Yahoo Groups.They have the best group format on the internet. Unfortunately because a lot of groups would like to leave them and their endless fiddling with their NEO software. But nobody can find a site with all of the features that Yahoo Groups have, including database space and dedicated file space and a number of other features including moderation of groups and details on which moderator did what… and so on. Not one site out there has all the features.

        2. By reading his comments, it’s apparent Brian S Hall doesn’t really know what it is he’s trying so say. Other than yahoo is “lame”.

      2. i am a recruiter in the tech arena and I have a client that actually will bring up the question – “why are you still using a yahoo or hotmail address?” (in a slightly incredulous tone) in an interview!

  11. So, dead man walking means: Dec ComScore data suggest US desktop indicates Yahoo properties have increased usage (from Nov), and a mobile user base larger than twitter (50 million of which came within the last 3-4 months).

    Put the emotions aside, and look at the data. Paints a different story.

    1. I came here to say the same thing. Yahoo isn’t doing excellently, but hundreds of millions of monthly pageviews (excluding search) can’t be all bad.

  12. I still think relatively highly of a Yahoo mail user compared to a Hotmail user. And, I also use Yahoo finance regularly despite the fact that sometimes I see that a company has higher gross profits than revenues (as if workers and suppliers are paying the company to make products).

  13. This is such a falsely premised article. Your main thesis is that Yahoo is irrelevant and needs “saving.”

    You do realize you give no supporting metrics at all. I take this as an opinion piece, but don’t throw out arguments that are irrelevant to your point. Stock price and Bing revenue have nothing to do what you’re positing. (in fact, they suggest the opposite)

    “Is Twitter worth saving? Rising stock price, but I never use it.” See how easy that was?

  14. I so agree. I switched before Google ditched its full search page. Tried Yahoo search but really not up to snuff- “NEWS” to yahoo is glitter-stars and accident-trash and you can’t ditch the junk. Did it lose a chance of grabbing the dishearten when Google dumped its search page?

    Now I use Start Page and it is pretty good. You are correct about Yahoo Mail. Mail.com is my personal fav at this point, and shall go paid service which isn’t a grand sum.

    Other than gmail as my junk mail service, I am as close as can be Google Free, but that is easily fixable thanks to my other junk mail at hotmail or whatever it is called now. And that seems agreeable enough; my only link to MicroSoft.

    But then there is the problem of my thermostat.

  15. The only thing i use yahoo anymore is the messenger. And the email when i am signing up for something i expect to recive spam from.

  16. ComScore’s latest data (http://www.comscore.com/Insights/Press_Releases/2014/1/comScore_Media_Metrix_Ranks_Top_50_US_Desktop_Web_Properties_for_December_2013) puts Yahoo as the number 1 destination in terms of number of unique U.S. desktop visitors. Google is no.2, Microsoft is no.3, and Facebook is no.4.

    I have both Gmail and Yahoo mail and while earlier versions have been dismal, I have to the say the latest version of Yahoo Mail is both visually appealing and does a fantastic job automatically managing my incoming mail (with OtherInbox). Although if I were starting out afresh I would probably go with outlook.com. I’d rather not let any whose primary business is selling ads handle my email.

    1. When has your yahoo email worked and have you been hacked yet? Unique visters mean nothing. Having repeat and loyal visitors is important.

  17. What does “Yahoo does not have the best users” actually mean? What are the characteristics of best users? It’s sound more like crank than analysis.

      1. I use other social sites and leave little to no data behind. I don’t fill out their profiles and use throwaway email addresses. I am perfectly fine with a site that doesn’t bug the daylights out of me for my phone number, location, birthday, friends etc. Privacy is valuable. And most Groups members visit daily or many times a day. Brian, you need to learn more about your subject matter before spouting off. Really.

  18. A thought provoking article. Two questions: first, what parts would be worth saving? Second, is there one acquisition Yahoo can make to turn it all around?

    1. Certainly Messenger and Flickr could find life. Outside of Yahoo, Tumblr can be a leader as an old school web platform.
      Doubt any acquisition will save them. Perhaps if they (foolishly) use their Alibaba money to buy a US cable company, that might make things interesting.

  19. The point of the article seems to be that Yahoo isn’t cool.
    All I know is that they’ve finally changed my email (yes, I still have a Yahoo email address) to the point that it’s now unusable.
    I have a creepy sensation that it’s on purpose.

  20. Thanks for touching on this, you are saying what a lot of us have been thinking: Yahoo has ruined it’s own neighborhood. However, they are a little good at one thing; Yahoo Answers is like fly-paper for low level trolls. It’s gross and not super effective – but hey, it’s something.

  21. Marissa Mayer is the Pied Piper leading Yahoo into the sea.
    Her entire (egotistical) approach has been so spend capital on the “Two Birds in the Bush” while totally ignoring, or worse, castrating the Bird in the Hand

  22. One thing Yahoo was good at was Groups. In fact, almost every other attempt a setting up a group feature failed because Yahoo was so good. They had the most features and it worked smoothly for a lot of years. Recently, Yahoo dropped a new interface on it’s many millions of Group users with no notice in a multi-million person beta test (maybe alpha seeing how poorly the new interface was designed). It just didn’t work at first. Bit by bit, Yahoo has been slowly fixing features, but usually breaking something else with each new “fix.” The users of Groups are hanging in there, hoping that the old interface might be reinstated, or that someone high enough up in Yahoo will finally notice the number and quality of complaints in the “user feedback” interface and do something about it. Groups are still useful and they can be used as a vehicle for advertising, so Yahoo should be trying to satisfy those users. I wish they would.

  23. Is there no room on the internet for anyone but Google? Must Google control everything? The email, social networking mobile devices, Streaming video and TV, search engine, web advertising, internet portal (Google fiber), now it’s robotics…Google, Google, Google. What next? Will they become a political Party? Replace ObamaCare with GoogleCare? Are they the ‘be all, end all’ of our dystopian future?

  24. Yes it’s worth saving because many of us have put years into our groups. Some of the knowledge stored in these groups may never be replicated because the authors have died. Get rid of Mayer and get someone who actually understands yahoo and what it is.

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