What is Yahoo’s Fate?

Ben Bajarin / September 8th, 2011

I wish I could confidently proclaim that Yahoo’s best days are ahead or them. The fact of the matter is they are in a hole in which they can not emerge without serious help.

Yahoo like most companies lacks vision. If we where to ask Yahoo executives what the online world will look like in 3 years and where is Yahoo’s value in that world, I’d bet we would get a blank stare. The industry perception of Yahoo has been that it is largely irrelevant. They have some very interesting assets, assets that bring in revenue. The problem is they don’t have enough assets brining in enough revenue and they have not been creating any new real value.

All of this Yahoo news is in stark contrast to the news that Facbook has now doubled its first half revenue to the tune of $1.6 billion.

Facebook is killing it in revenue and Yahoo is going the opposite direction.

So what is to come?

The obvious answer is hire a new CEO. The only problem is who is on the market with vision, leadership, communication skills, execution etc that can turn this company around? It is akin to the sports world when there are no big names in the free agent pool. Unless they should take seriously Snoop Dog’s desire to become CEO. Who knows maybe he is exactly who they need – i’m half-joking.

Another element to consider is in uncertain times like Yahoo is going through people start worrying about their jobs and good talent starts looking elsewhere. Furthermore how can they expect to attract new quality talent with this turbulent ride Yahoo is on.

My advice to Yahoo is to start selling off assets rather than the whole company. Flickr for example could be very valuable to a number of folks in the industry. Their Fantasy sports assets could be sold to CBS or ESPN for example. Perhaps Google would want all their email customers.

The bottom line is Yahoo has lost mind share within the industry and with consumers. There is still revenue to be had with their assets and the responsible thing for the company and the board to do is to now minimize the damage and sell the assets to return something to shareholders.

Key Takeaways from Yahoo’s Troubles

Thinking quarter to quarter or even year to year is a failing strategy. Innovate or die.

What is more concerning is that this lack of innovative spirit seems to be a trend I am seeing in larger corporate institutions in the technology sector. More on that to come.

Ben Bajarin

Ben Bajarin is a Principal Analyst and the head of primary research at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research and he is responsible for studying over 30 countries. Full Bio
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