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?
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.
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.